Reflections From The Boxing Ring

Last week was my "bout" with Broadband Plan architect Blair Levin at the Las Vegas joint meeting of RICA and RTG. I'll be writing more to you about this and the Rural Broadband Alliance efforts in upcoming Back Pages, but I thought I'd share some quick thoughts tied into this week's Report.

I have to begin by thanking Blair Levin for coming and joining me in the discussion.

I think that it was valuable for the companies in attendance to hear first-hand some of the challenges and issues we face. I think it was also helpful for our industry to have the opportunity to address some of Mr. Levin's thoughts and perceptions about the rural industry and today's cost recovery regulatory mechanisms.

The discussion was good, energetic and provocative - literally provocative! A few of Blair Levin's comments definitely provoked the audience! And, it was good for all of us to hear his comments in order both to gain a better understanding of the issues we face, and to identify the facts and political support we need to assemble to support our industry positions.

While both Mr. Levin and I became fiercely involved in our discussion/debate, I don't think either of us landed any death-blows. We listened to each other, but neither of us said, "I never heard it put that way - you changed my mind!" The fact is that we disagree on many issues. For example, we probably disagree on how to utilize USF most efficiently and effectively. One of our lead stories in this week's Report is about FCC Chairman Genachowski's speech to NARUC last week in which he stated that the FCC focus is now on infrastructure investment and job creation. Both Blair Levin and I would probably argue to the other that each of our proposals is better than the other's in terms of stimulating investment and job creation. Another example of our disagreement is Mr. Levin's proposed use of auctions to determine USF recipients.

One of the more provocative comments Mr. Levin made at last week's meeting relates to a story in this week's Report regarding the RUS filing of comments at the FCC expressing the need for the FCC to provide financial revenue predictability in order to support financing of rural infrastructure projects. Mr. Levin questioned whether the audience thought that the government owed anyone a guarantee of profitability, and indicated that the question extends to the RUS portfolio of loans to rural providers, suggesting that even the RUS should not look for rules that guarantee return.

On the other hand, Blair Levin, both in his presentation and in his most recent paper issued under the auspices of the Aspen Institute, clarified in a favorable way several of the concerns that I and others in our industry have raised about the Broadband Plan.

For example, he points out that the intent of the plan was never to leave rural "behind" urban. In his newest paper, he calls for regular review of service levels in urban and rural areas with resulting modification of the definition of universal service, as needed. With regard to our industry concern that the Plan would leave rural companies with no source of needed revenue recovery, Mr. Levin points out in his Aspen Institute paper that the the Plan anticipates that several billion dollars of today's USF will be retargeted for use to replace revenues lost as a result of a transition away from reliance on switched access revenues.

More to come on this and all in the coming weeks.

Best wishes to you and yours for a Happy Thanksgiving,

Steve Kraskin