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1,000,000 Homes: Let Them Eat Satellite
Sunday, 31 July 2011 12:43
End of universal service For nearly a century, U.S. telcos served every home in the country. They now demand that end and that the FCC, pre-empting the states, end "carrier of last resort" requirements. They project this would apply to 728,000 homes in the big carrier territory. Adding the small carriers takes the figure to about a million. Since the Bells get relatively little USF money for these homes, the subsidy todoay is not excessive: about 1/50th of their annual profit/cash flow. There's no reason they couldn't continue to serve these homes and still remain among the most profitable companies in the world. This is not mentioned in the press release of the summary; you have to look to page 95 of a very dense document to find it. But this is one of the biggest telecom stories of the decade, and reporters won't be deterred.
     With time, I planned a companion article "Why 400 Congressman Will Refuse to Support the Big Telco Plan." When I get back from Montana, I intend to hire an assistant/paid intern whose first responsibility will be to ask "Do you support the Plan?" When they realize it means a million homes will lose phone service, I don't think even Bell lobbying power will get them to endorse it. I'll also ask as many of the state commissioners as possible.
Lastly, the Commission has authority to eliminate outdated service obligations
such as those imposed under the Commission’s eligible-telecommunications-carrier (“ETC”)
regulations or other carrier-of-last-resort (“COLR”) rules. Going forward, state or federal
service obligations must apply only to funded carriers in those areas where they receive explicit
support — regardless of those carriers’ legacy regulatory status. Current federal ETC
obligations, however, require designated carriers to provide supported services throughout their
Attachment 5
service areas, regardless of whether they are receiving high-cost support for those services.
Similarly, some states have COLR obligations that require incumbent LECs to provide service in
a given area, sometimes at reduced rates. In today’s dynamic marketplace, these regulations are
not only unnecessary but actually undermine Congress’s and the Commission’s universal service
goals by locking consumers into legacy technologies and deterring carriers from deploying
broadband and IP-enabled services. Existing ETC and COLR regulations, where they apply,
inefficiently skew the market and make it difficult (or even impossible) for carriers to upgrade
from legacy architecture, thus diverting capital that could be used for broadband deployment.
 Scenario #3 is the Coalition’s recommended solution. It focuses exclusively on areas currently served by price cap
incumbent LECs, and limits the total annual disbursements from CAF to $2.2 billion for these areas. The $2.2
billion cap is maintained by setting the Alternative Technology Cost Threshold at $256 per service location, which
means that the approximately 728 thousand highest‐cost service locations will be served by an alternative
broadband technology (i.e., satellite).