At its open meeting today, the FCC announced a first set of proceedings to begin implementation of its National Broadband Plan. The first item was a Notice of Inquiry and Notice of Proposed Rulemaking (“NOI/NPRM”) to begin shifting universal service high cost funding to broadband services and away from telephone subsidies where they are no longer needed. Staff noted that USF reform will be a “marathon, not a sprint,” echoing the Plan’s statement that high cost changes will be phased in over time.

While the text of the NOI/NPRM is not yet available (the FCC has only issued a News Release as of the time of this posting), staff at today’s meeting outlined three principal issues teed up for comment. First, the FCC is asking for comment on what a new model for high-cost support should look like, if it chooses to employ one. Support today is based upon models, which some believe cause support to be poorly targeted (too much money in areas where it is not needed, not enough in others). The staff clearly indicated that they are only gathering information and are not signaling a preference against more targeted, market-based approaches such as reverse auctions. Second, it seeks comment on how it might jump-start new broadband support before the completion of long-term reform. Some parties are likely to urge for the FCC to fund project-basis awards in unserved areas, something like a round 3 of the broadband stimulus programs. Third, it seeks comment on ways to control growth of the USF, such as capping funding at 2010 levels (and using the “savings” to fund broadband), transitioning rate-of-return carriers to incentive-based regulation and eliminating high cost funding for competitive providers (which are mostly wireless carriers) over five years. Although each of these three items are posed as interim steps, the debate has the potential to shape the framework for long-term reform. 

UPDATE: The FCC has just released the NOI and NPRM on its website.  As noted in the NOI/NPRM, comments and reply comments will be due 60 and 90 days, respectively, from the date of publication on the Federal Register.  The Commissioners' statements are also available as well.  (Genachowski, Copps, McDowellClyburn, Baker)