Rural Telecoms: USF Reforms Are Pushing Us Toward Fiscal Cliff

Rural telecom providers have taken their complaints about the Federal Communications Commission's Universal Service Fund (USF) reforms to the White House, tying the issue to the "fiscal cliff" negotiations.

The USF funds telecom build-outs in high-cost areas where there is not a business case absent the government subsidy. The FCC is moving that support for phone service in high-cost, particularly rural, areas to broadband deployment, the new must-have telecom service, and to reform subsidies to reflect the move of voice to IP delivery. The goal is also to provide a "glide path" for that migration given that the switch-over will take time, though rural carriers suggest it is more like a crash landing for their particular economies. In a letter to President Barack Obama, the Rural Broadband Alliance asked to include language in fiscal cliff legislation suspending some of the reforms and require the FCC to submit them to the Federal State-Joint Board for their recommendations. The carriers say the "well-intentioned but misguided" changes -- part of the FCC's migration of support from traditional telecom to broadband -- has led to job cutbacks and consumer rate increases.