Universal Service and USF Reform: Establishing a Rational and Efficient System Presentation to NASUCA Mid-Year Meeting San Antonio, TX June 28, 2011
Century. Link: Network Map and Service Territory Century. Link Qwest Upon Merger Close, Served Approximately: · 17 Million Access Lines · >5 Million Broadband Customers · >600, 000 Video Subscribers w/ growing facilities base · In 37 States 2 Century. Link CLEC Service Area Century. Link IP / MPLS Core Qwest POPS Century. Link Fiber Network Qwest Fiber Network
Century. Link in Texas Ø 286, 000 access lines Ø 106 exchanges Ø 6 operating companies Ø 22. 9 HH per square mile average density ØLargest exchanges served: ØKilleen ØPorter ØHumble ØSan Marcos ØSmall, rural exchanges (HH density/square mile) Ø 74 exchanges below 20 Ø 47 exchanges below 10 Ø 23 exchanges below 5 3
Population Density Matters ØILECs bear expensive COLR obligations to service all customers; a burden unique only this class of provider, and very important in areas of low population density ØCentury. Link serves vast tracts of rural America; in addition to urban centers like Denver, Las Vegas, Seattle, Phoenix, and Minneapolis Line Density (loops/sq. mile): AT&T Verizon Century. Link 101 155 29 Service Area (sq. miles): AT&T Verizon Century. Link 602, 391 229, 569 699, 521 ØMuch of Century. Link’s service area has fewer than 10 households per square mile ØCompetitors routinely avoid serving low density areas Ø If COLR, ICC & USF reform is not handled properly, there is a real risk of leaving rural areas behind 4
Historically COLR Costs Have Been Buried Ø When the entire territory (study area) in a state is averaged, it is assumed that revenues earned in low-cost Franklin can be used to offset the cost incurred in serving high-cost Petroleum. Preble, IN Monthly Cost: $73 Petroleum, IN Ø Migrating USF distributions from Monthly Cost: a study area basis can better align $100 funding with costs – and (generally) away from competition. Ø Legacy EQ receives $0 High Cost funding (except IAS access replacement) under the study area system; a wire-center system would fund the higher cost exchanges. Indy Metro Franklin, IN Monthly Cost: $28 *Costs for voice network. Principle holds true for broadband. Salamonia, IN Monthly Cost: $104
Sweet Springs, Missouri Investment Overview Distance and Density Drive Costs Wire Center Total Lines Served 1, 077 122 sq. mi. Investment per Line $6, 610 City Center Lines Served 138 per sq. mi. Investment per Line $2, 650 Outside City Center Lines Served 2. 4 per sq. mi. Investment per Line 6 $17, 960
Population Density Example: ILECs Serve Higher Cost Areas Brookneal, Virginia 2, 600 Access Lines Ø Network deployed deeper into rural markets Ø Deployment not a choice: subject to state and federal obligations Ø Continuing service obligations lead to ongoing capital expense requirements Ø Cost of service far exceeds viable business case parameters
Rural Broadband Will Need Support ØBroadband has become a necessary component for business, education, health, and in the lives of consumers ØMarket forces are working for most consumers: Ølarge-scale broadband network development, broadband devices, software development, and application development. ØHowever, consumers in the most rural portions are not served ØUniversal service funding will be required if national public policy to serve “all” remains in place ØMust avoid unfunded mandates and minimize investment risk during transition Principle: Competition in the cities must not deprive the rural areas of needed universal service support
Universal Service: 5 Fundamental Questions #1 Determine what “it” is - Define broadband service, speeds, other parameters #2 Determine the areas that need universal service support - Target to high cost areas; given rate comparability policies #3 Determine the cost of achieving universal service - Calculate the total cost of qualifying high-cost areas less expected customer contributions #4 Determine rules for vendors to implement universal service policy - Provide requirements for those who receive funds and deliver on the promise of universal service #5 Determine how to fund the Universal Service Fund - Apply surcharge applicable to all providers to establish a broad, competitively neutral contribution mechanism 9 The government buys jet fighters, computers, light bulbs, etc. It should “buy” universal service similarly.
Скачать презентацию Universal Service and USF Reform Establishing a Rational
9012729dbeac94d8d96eb2b784068a8b.ppt