USF Revamp Likely This Year, FCC Flexibility Crucial to Incentive Auction, Panelists Say

The FCC is likely to get the Universal Service Fund revamp done in 2011, panelists said during a Regulatory 2.0 workshop Thursday. Congress should give the FCC as much flexibility as possible as it considers legislation giving the commission authority for incentive auctions for broadcast and other spectrum, they said.

If Chairman Julius Genachowski wants to get USF done, he can this year, said Steve Morris, NCTA vice president. It appears there’s a general consensus among the commissioners on getting it done, too, he said. Opponents could potentially seek help from Capitol Hill, but nobody seems to be doing that, he said. Even if they do, they might not get Congress’s attention since it’s preoccupied with elections and economic and other issues, he said. Whatever the FCC does on USF revamp, there will be legal challenges, said Pete Sywenki, acting Sprint Nextel vice president-government affairs. Hopefully the agency can decide sooner rather than later so that the industry can move on, he said.

If there’s no revamp this year, there’s little chance the commission can get it done next year due to elections and in 2013 due to potential leadership changes at the commission, said Hank Hultquist, vice president with AT&T. “If we don’t do it now, it becomes harder and harder to get it done,” said Mark Uncapher, director of regulatory affairs at TIA. The consequences of not getting it done are more severe now than before, said Morris. There are “lots of good ideas” in the ABC Plan, he said. But the FCC’s revamp efforts should include meaningful, enforceable fiscal constraints in the form of a cap on high-cost support, and competitive and technological neutrality, rather than adopting proposals in the ABC Plan that favor the incumbents, he said. There still are some minor differences among NCTA members focusing on the treatment of VoIP, he acknowledged.

Meanwhile, a spectrum auction is a complicated process, so the FCC needs as much flexibility as possible to design and execute it, said Rick Whitt, counsel with Google. The FCC is the expert on spectrum issues, he said. Having the flexibility to structure auctions, the agency would be better at keeping up with change, he said. A proposal that dictates how the FCC runs auctions would risk the outcome of the auction, he said. There’s very little non-federal spectrum left to be reallocated, particularly by auction for exclusive licensed use, said Michael Calabrese, senior research fellow with New America Foundation. It’s important to design TV band incentive auctions in a way that preserves the current access to unlicensed spectrum in every local market and nationwide for “Super WiFi” and other new technologies and services, he said. As the expert agency, the commission should be able to design the auction, he said. Many federal bands are well-suited for increased sharing with the private sector, he said.