Access to broadband solutions – it’s something that most citizens in the U.S. would like to have without much cost or complexity. For those in metropolitan areas, the readily available high speed connections tend to fulfill the need. In rural parts of the country, however, a completely different story is often told.
When businesses are trying to survive in these areas, a lack of access to broadband solutions is often a barrier to success. The rural carriers serving these clients are generally operating on shoestring budgets and surviving as a result of the universal service fund. Changes to this fund, however, are presenting new challenges.
These challenges were the topic of a recent Lexology post, detailing the “FCC’s (News - Alert) USF and ICC Reform Order Published in Federal Register and Scheduled to Become Effective (in Part) on Dec. 29, 2011.” Written by K.C. Halm and Christopher W. Savage, this document provides some insight into the future of broadband solutions in this country.
The Order posted by the FCC is the agency’s effort to overhaul and reform the nation’s universal service fund (USF) and intercarrier compensation rules. This order is set to become effective on December 29, 2911. Specific rules will take effect that will impact the availability and build-out of broadband solutions in the future.
More specifically, intercarrier activities will be impacted. The current levels for all intercarrier compensation rates, including switching access rates, will become the new caps. All IntraMTA traffic exchanged between local exchange carriers and CMRS will be subject to a bill-and-keep compensation mechanism which will become the default approach to handling such accounts.
Compensation for intercarriers for toll free traffic will also be capped. That includes traffic that terminates or originates in VoIP, but is in TDM format when exchanged. This compensation will be capped at current interstate access rates, even if the active traffic can be considered otherwise intrastate in nature.
Likewise, all compensation for all other VoIP traffic in TDM format when exchanged will be capped at reciprocal compensation rates. The agency will also enforce specific rules to combat phantom traffic and access stimulation.
These rules will take effect immediately, impacting the availability of broadband solutions throughout the nation as carriers struggle to secure the necessary revenue and profit to stay afloat. Other elements within the Order are still under review, pending approval from the Office of Management and Budget. Once approved, these rules will be published for distribution in the Federal Register.
With publication in the Federal Register, carriers unhappy with the Order can file a petition within 10 days of the publication. This action will determine which federal circuit court of appeals will review the Order. If multiple petitions are filed within the 10 days, a lottery will be held to determine location for consolidation of petitions and hearings.
Petitions are likely to be filed as local carriers in rural parts of the country have the opportunity to supply broadband solutions to customers, but struggle to make a profit when fees they have long depended upon as revenue are capped.
Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan’s articles, please visit her columnist page.
Edited by Stefanie Mosca