Fundamental FCC reforms hit US carriers

The FCC has announced the regulations which will dictate intercarrier compensation (ICC) policy and reform the Universal Service Fund (USF) in the US.

More information about the FCC's proposals for intercarrier compensation can be seen here. The FCC is quite open that these will not be revenue neutral for carriers.

We’ll be posting further stories with details of the new regulations and responses, so please keep visiting.

Julius Genachowski, FCC chairman, claims that these substantial reforms are “a once-in-a-generation overhaul of universal service”, while the FCC has confidently tweeted that: “Over next 6 yrs, Connect America Fund will expand broadband access to over 7 million residents of rural areas who are currently unserved.” The plans will also extend high-speed internet access to 18 million Americans.

While substantial, these reforms are only the starting point in a massive overhaul of US broadband policy, which could have massive implications for all US carriers, particularly smaller players.

Law firm Bingham McCutchen stated today: “While touting comprehensive reforms that will improve accountability and target support where needed to increase the availability of broadband, all Commissioners acknowledged that this Order is only the first necessary step toward universal service reform.”

While the impact of these reforms is still being analysed by many US players, some have declared their views of the Order.

The Rural Telecoms Associations – The National Telecommunications Cooperative Association (NTCA), the Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO) and the Western Telecommunications Alliance (WTA) – had been lobbying for their RLEC plan and had supported the ABC Plan. They have released a statement welcoming the clarification of the ICC framework, but have expressed regret that the FCC did not endorse their proposed plan.

“This is just the beginning of USF and ICC reform for rural carriers," said OPASTCO President John Rose. "The devil is in the details. Today's FCC decision will be closely analysed to determine exactly what it means for our members and their customers. The FCC’s desire for short-term fixes could have long-term, unintended consequences.”

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