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FOLLOWING THE TELECOMMUNICATIONS INDUSTRY AND RELATED LEGAL TOPICS

Tuesday, May 09, 2006

Newsflash ... Universal Service and Intercarrier Compensation reform top the FCC's wireline agenda ...

Top FCC folk yesterday reiterated that universal service and intercarrier compensation reform are at the top of their wireline agenda.

As some of you no doubt know, these same two items topped the FCC's wireline agenda a year ago, and we doubt very much that we will see any significant reform steps taken by the FCC this year. Not to get ahead of ourselves, but our first prediction for 2007 is that USF and Intercarrier Comp reform will top FCC's wireline agenda. Maybe the third time will be the charm.

Here's our back of the cocktail napkin math:

The NARUC GXX (used to be 11, but a bunch have dropped out) is trying to put together a legal analysis for its PIMP plan (Promote Incumbent Monopoly Payments plan -- thanks, J.S.!). In all likelihood, the PIMP plan will need to get vetted by NARUC at the summer meetings in mid-July. Even if it obtains unanimous NARUC approval, the earliest we see anything going to FCC is August, and no one is around DC in August. Maybe the FCC puts out a request for an additional round of comments in September, but maybe not. Either way, cable, wireless, CLECs, and consumer groups will all chime in against the PIMP throughout the fall, and we see little if any chance for any kind of comprehensive reform order this year.

USF reform strikes us as harder to pin down with precision. The bottom line is that the Hill is way out in front on this one. We see no upside for the Commission to take any action while there are so many bills floating around, especially right before an election. That said, it's conceivable that we could see an order after the 2006 elections, but we lay odds on 2007.

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