* Telecom companies submit FCC filing on USF, ICC reform
* Plan would shift fund focus to broadband deployment
* Critics support shift but wary of the plan's particulars
By Jasmin Melvin
WASHINGTON, July 29 Six telecom providers told
U.S. regulators they could begin to fund in 2012 a revamped
government subsidy program that would help deploy high-speed
Internet service to 4 million Americans living in rural and
The commitment was part of a proposal sent to the Federal
Communications Commission as it shifts the focus of its $8
billion universal service fund to broadband service from phone
AT&T (T.N), CenturyLink (CTL.N), FairPoint (FRP.O),
Frontier Communications FTR.N, Verizon (VZ.N) and Windstream
(WIN.O) said on Friday they backed the proposal that could help
provide broadband to underserved areas.
The current patchwork of programs in the FCC's fund -- paid
for by fees added to consumers' telephone bills -- would be
fully replaced by two new universal service programs to support
fixed and mobile broadband under the telecom companies' plan.
The transition would be complete in 2016.
The industry proposal would also gradually lower the
charges phone companies pay to each other for handling voice
traffic, reforming the complex system of payments between
carriers called intercarrier compensation.
The plan follows the FCC's request for industry input after
it proposed new rules in February to modernize the universal
service fund. More than 20 million Americans are without access
to high-speed Internet.
"We're pleased that many have taken up that challenge, and
we will consider those proposals as we finalize reforms," an
FCC official said.
"We urge the FCC to use the momentum this proposal has
created to complete the reform process this fall,"
Representatives Greg Walden and Lee Terry, chairman and vice
chairman of the House communications subcommittee, said in a
But elements of the industry plan were criticized by
Public interest group Free Press, while in support of
shifting universal service to a broadband focus, said the
proposal could raise the rates of urban customers.
Companies are expected to rely more on retail customer
revenue as revenues from intercarrier compensation charges are
lost. To ease this shift, the proposal from the six companies
would loosen regulations on rates and pricing flexibility.
Free Press also said that federal subscriber line charge
rates could go up by as much as $3.75 by July 2016.
"Raising this fee for everyone in the name of increasing
the self-sufficiency of a small number of already highly
profitable rural phone companies is unnecessary," Free Press
Research Director Derek Turner said in a statement.
The proposal argues that monthly subscriber line charges
would be kept in check by competition, and the rate increases
are capped as an additional protection to consumers.
The National Cable and Telecommunications Association said
it would work with the FCC and other groups to achieve reforms,
while the American Cable Association, representing independent
companies providing broadband service to 7.6 million
subscribers, said it would send its own comments to the FCC
regarding the agency's proposed rulemaking.
(Reporting by Jasmin Melvin; Editing by Tim Dobbyn)