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The Nation Broadband Plan & Its E ffects on USF and ICC Reform

The Nation Broadband Plan & Its E ffects on USF and ICC Reform. Krista K. Tanner Iowa Utilities Board June 7, 2010. USF Today. In 2010, USF projected to spend $8.7 billion on its 4 programs Of that, $4.6 billion will go to the High-Cost fund

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The Nation Broadband Plan & Its E ffects on USF and ICC Reform

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  1. The Nation Broadband Plan & Its Effects on USF and ICC Reform Krista K. Tanner Iowa Utilities Board June 7, 2010

  2. USF Today • In 2010, USF projected to spend $8.7 billion on its 4 programs • Of that, $4.6 billion will go to the High-Cost fund • Current High-Cost fund not designed to universalize broadband

  3. ICC Today • The current ICC system has fundamental problems that create inefficient incentives • ILEC access MOUs decreased by 56% from 2000 to 2008 • The continued decline of access revenues threaten carriers’ ability to invest in network upgrades

  4. USF/ICC Reform Guiding Principles • USF should support broadband deployment directly • Maximize broadband availability • No flash cuts • Reform requires federal and state coordination

  5. USF Reform – Phase 1 • Phase One – Set foundation for reform (2010-2011) • FCC will create Connect America Fund (CAF) and Mobility Fund (MF) • FCC will set basic parameters of new funds through rulemakings, modeling of costs and revenues, and mapping

  6. USF Reform – Phase 1 • CAF should adhere to following principles: • Should flow to areas where no business case exists to provide broadband • One subsidized provider in geographic area • Eligibility should be technologically agnostic • Should identify ways to drive funding to efficient levels • Accountability

  7. USF Reform – Phase 1 • Mobility Fund • MF would provide one-time support for deployment of 3G networks to bring all areas to a minimum standard for mobile service availability

  8. USF Reform – Phase 1 • NOI/NPRM issued April 21, 2010, seeks comment on: • How to fast-track broadband deployment in unserved areas while CAF in development • Use of economic model to determine level of USF support

  9. USF Reform – Phase 1 • NOI/NPRM also seeks comments on proposals designed to shift spending from legacy USF services to broadband services, such as: • Capping HC fund at 2010 levels • Reexamining rules for small telcos • Phasing out funding of multiple competitors in areas where market cannot support even one provider

  10. USF Reform – Phase 2 • Phase Two – Reform Implementation (2012 -2016) • FCC may focus first on states with highest number of unserved households or where states provide matching funds • Competitive ETC support phased out • USF contribution base will be expanded

  11. USF Reform – Phase 3 • Phase Three – Complete the transition (2017 – 2020) • Legacy high-cost program for voice-only networks will cease operations by 2020 • The “new” high-cost program will only provide funding support for deployment and provision of supported services through the CAF

  12. ICC Reform • Phase 1 (2010-2011) – set foundation for reform by establishing rules and adopting interim solution for arbitrage • Phase 2 (2012-2016) – reduce intrastate access charges to interstate level • Phase Three (2017-2020) – phase out per-minute access rates

  13. Accelerating Deployment • NBP recommendations for USF and ICC reform can be accomplished without Congressional appropriation • However, an appropriation of an additional $3 billion per year for three years would accelerate broadband deployment

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