Yesterday, more than two years after the FCC adopted transformational reforms of universal service and intercarrier compensation, critics of that order (which include AT&T on a single, discrete intercarrier compensation issue) finally had their day in court. And by all reports it was a long and exhausting day with more than two dozen lawyers arguing a host of issues.
It should not be surprising to anyone in telecom that this order has drawn appeals on so many different issues. This order represents perhaps the most significant step taken to date by the FCC to reform an outdated system of explicit and implicit subsidies to promote universal voice service, and replace it with a system of limited explicit subsidies to promote universal broadband service.
Of all the arguments being made in Denver, the one that is most threatening to the ability of the FCC to do its job leading the historic transition to broadband, IP networks (i.e., the job laid out by Chairman Wheeler yesterday), is the claim by some parties (most prominently C-Spire and US Cellular) that the FCC has no authority to use universal service to promote broadband. This argument, if accepted by the court, threatens the entire project of updating universal service for the broadband era. These parties, in effect, are trying to derail a process that was first outlined in the National Broadband Plan and then set in motion by this order. Early reports indicate that the judges were skeptical of this argument, though one can never put too much weight on what’s said in oral argument.
I don’t think, in the long run, these agents of stasis can succeed. The consensus in the telecom world that universal service should be used to bring broadband to high-cost areas is almost overwhelming. I believe that even if the court were to accept the argument of the agents of stasis, there would be bipartisan support to reverse such a decision through legislation. I hope such legislation does not become necessary.
In case you were interested, these are the parties arguing that the statute flatly prohibits the use of universal service support for broadband.