Hi All,

Here's what WISPA is prepared to submit to the commerce committee. Thought you guys would like a peek at it first.

WISPA USF Reform Position Paper

WISPA is a the WISP industry's only industry owned and operated trade association. We're a 501c6 corporation with a 7 person, membership elected board.

The goals for USF should be clarified. Are laptops for kids part of the program goals? Was it the original intent that USF exclude small local entrepreneurs and give preferential treatment to the incumbent? As USF changes, do the changes have a clear goal? Is this just a mechanism to try to put more funds into the program otherwise leave it as is? Or does Congress want to see substantial changes in the program that do more to foster rather than stifle innovation?

WISPA believes that market forces should mostly be left to their own. Without government tweaking. USF should be canceled completely. If a real need for outside funding in regions or small pockets turns out to be needed, address those issues on a case by case basis. At the very least the USF program needs major reform as its cost based fee structure encourages abuse.

An example of artificially high costs would be in Odessa, Washington. In the early 2000 time frame the local telco replaced an 8 T-1 microwave link with a fiber optic line at a cost (or so we've been told) of $600,000. Even at the time, the cost of a microwave replacement with more capacity would have been half or less. This is for a town of 1000 that's not on the way to anywhere. The telco is now in the process of adding more fiber to complete a fiber loop to other areas. This next 30 mile stretch is through many solid rock canyons and the costs are expected to be even higher.

This same telco has installed $60,000 DSL systems in rural areas that have fewer than 15 houses within 18,000 feet of the hut. Clearly these are cost raising mechanisms.

We understand that USF is not likely to go away at this time. The above telco gets 2/3rds of its income via subsidies and would not likely survive without them. Leaving such business practices in place permanently is not good public policy though.

WISPA proposes that a time limit on the USF program be instituted. Expand the program to include all communications companies and use USF to help them build an infrastructure. Once that system is built, it needs to stand on its own two legs though. If it doesn't, then that's the company's fault and they can live with the results of the network they built. Somewhere between 10 and 20 years should allow plenty of time for efficient network upgrades or construction. The program should not be viewed as a permanent profit line item for companies but rather be a short term capitalization/construction fund that will end and leave the company standing (or not) on its own two feet at a set specific date.

We believe that opening up USF to all operators would likely cause multiple networks to be built at the same time and the most efficient ones would survive. If, after USF was discontinued some areas were left with no viable options for service those specific cases could be addressed under some more targeted program. Funds should be collected and distributed based on customers serviced. This would help prevent speculation with the funds, rather the funds would reward those that have already stepped up to the plate. Tying fund distribution with the FCC form 477 would also likely help lead to more accurate market data availability.

WISPA also believes that USF's goals should be readdressed. We don't believe that using USF funds to provide laptop computers to 68,000 7th and 8th graders in Massachusetts is a proper use of the program.

We would also like to see some changes in the way that USF is distributed. The E-Rate program excludes almost all entrepreneurial providers. In some areas the local WISP offers greater service levels for less cost than the local hospital or school is paying via the E-Rate programs. We're not allowed to service those portions of the account that we could take care of because we don't have CLEC status or can't offer all services.

It seems to us that a complicated mechanism to compute pay in and pay out isn't needed or wanted at this time. We propose that the current contributions simply be expanded to any broadband provider in any area that the incumbent currently contributes. And in any area where USF funds are distributed all providers be given equal shares based on customer base. And one customer equals one share. No company should get more money for more services. This would slow down the convergence of services into increasingly efficient networks in rural markets.

This model should encourage both competition and a shift from high cost to low cost network design.


Marlon K. Schafer

Founding Board Member

FCC Committee Chairman


(509) 982-2181

(509) 988-0260 cell

(509) 982-2181                                   Equipment sales
(408) 907-6910 (Vonage)                    Consulting services
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