RCA Again Calls for USF Reform as FCC Increases Universal Service Contribution Factor

Washington, DC – Today, the Federal Communications Commission (FCC) announced that the proposed universal service contribution factor for the second quarter of 2010 will be 15.3 percent, an increase of 1.2 percent from the first quarter of 2010. In reaction to the FCC’s announcement, RCA again calls on the Commission to reform the current process of restructuring the Universal Service Fund (USF).

In August 2008, the FCC ordered a cap on the total annual support that competitive eligible telecommunications carriers (CETCs) can receive based on the notion that wireless carriers were solely responsible for the growth in the USF. Yet, despite the CETC cap, the contribution factor has continued to rise – clear evidence that wireless is not responsible for the growth in the USF. In reality, the increases are primarily due to steadily falling telecommunications revenues, which shrink the base from which the USF contributions are calculated.

Many rural and regional carriers depend on support from USF in order to expand their network to the nation’s most unserved and underserved areas and remain competitive in the marketplace. The FCC’s decision to cap the amount of support to CETCs places an undue financial burden on many of the smaller carriers and can hardly be considered to be competitively neutral..

In a letter to FCC Chairman Julius Genachowski earlier this week, RCA expressed its concern that the interests of the rural and regional wireless carriers are not adequately represented in the FCC’s USF reform efforts, and the FCC’s announcement regarding the significant increase in the USF contribution factor is further proof of the need for the Wireless Bureau to be formally included in the agency’s deliberative process.

In reaction to the FCC’s announcement, RCA CEO Steven K. Berry said, “While we commend the Commission’s efforts to restructure USF, today’s announcement again demonstrates the need for the Wireless Telecommunications Bureau to have meaningful role in the reform process. Issues important to rural and regional carriers, such as the continued increase in the contribution factor, are not adequately being considered, and we again urge the FCC to take this opportunity to include the Wireless Telecommunications Bureau as the agency works to reform the Fund.”

About RCA
RCA is the nation's leading association for wireless providers serving rural areas of the United States. The licensed service area of RCA's nearly 100 members covers more than 80 percent of the nation.