USTelecom on Impact of Rural Digital Opportunity Fund

USTelecom, which represents large and small incumbent telecommunication companies, including AT&T, Verizon, and CenturyLink, supported a report that discusses the Federal Communications Commission's upcoming Rural Digital Opportunity Fund (RDOF). The report was written by Tony Clark, a former chairman of the North Dakota Public Service Commission and past president of the National Association of Regulatory Utility Commissioners, and Monica Martinez, a former Michigan public services commissioner. A current concern expressed by the authors pertains specifically to the price cap carriers – the expectation that these carriers may lose Universal Service Fund (USF) subsidies, at least in some areas, assuming the FCC moves ahead with plans for the RDOF. The authors note, “[c]ompletely shutting off access to federal universal service support to an incumbent in favor of a competitor is a new frontier in the evolution of the support mechanism.” As subsidies for price cap territories go to companies other than the incumbents, “the incumbent local exchange carrier (ILEC) should be relieved of all federal and state obligations to provide service in such areas,” the authors argue. The report makes several policy recommendations, including:

• Where a new entrant wins the subsidy for a specific territory, the carrier of last resort (COLR) obligations for that territory should automatically transfer to the new provider
• The FCC should streamline or eliminate rules that prevent carriers from discontinuing service and exiting the market where competitive alternatives exist, particularly when the competitor is being funded by the government with support previously earmarked for the incumbent
• The FCC should eliminate any eligible telecommunications carrier (ETC) obligations where a provider is no longer receiving a USF subsidy
• State COLR obligations should be preempted where an incumbent provider loses the federal subsidy, unless the state steps in to make up the difference