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A Mid-size perspective on rural broadband

A Mid-size perspective on rural broadband. Independent Telephone & Telecommunications Alliance Broadband Expo – Dallas – November 3, 2010. Outline. Introduction to Mid-Size Carriers Serving Rural America Transition to Broadband. Introduction to Mid-Size Carriers. ITTA Mid-Size Companies

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A Mid-size perspective on rural broadband

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  1. A Mid-size perspective on rural broadband Independent Telephone & Telecommunications Alliance Broadband Expo – Dallas – November 3, 2010

  2. Outline • Introduction to Mid-Size Carriers • Serving Rural America • Transition to Broadband

  3. Introduction to Mid-Size Carriers • ITTA • Mid-Size Companies • State of the Industry

  4. ITTA • Alliance of mid-sized companies • Focus on Federal regulatory and legislative issues • Members serve primarily rural areas • 20 million access lines, 44 states • Mix of rate-of-return, price cap companies • 85+ percent broadband deployment • Independent and collaborative joint advocacy

  5. ITTA Lines Comparison

  6. ITTA Service Areas

  7. Mid-Size Companies • 1996 Act • Interconnection requirements • Recognition of similarities, exemptions • Rural telephone company • 2 percent company

  8. State of the Industry • Competition for voice services • Competition for broadband services • Trends in access minutes • Consolidation and mergers • Strength of fiber/wired networks • Capacity • Reliance on by other technologies

  9. Recap 1 • ITTA • Mid-Size Companies • State of the Industry

  10. Serving Rural America • Carriers of Last Resort • Costs and Challenges • Supplemental Solutions

  11. Carriers of Last Resort • Social compact • Federal requirements • Federal law, Communications Act • Includes: access to 911, operator services; directory assistance • State, local obligations • Duty to serve and extend lines • Exit barriers; rate regulation • Not borne by competitive carriers

  12. Costs and Challenges • Population Density • High fixed costs • Fewer customers in aggregate, fewer customers per facility mile • Competitive inputs • Town centers vs. outlying areas • Capital and Revenue Inputs • End-user revenues, access, support mechanisms, private investment and incentives • Example: pole attachments; backhaul

  13. Supplemental Solutions • Universal Service • Policy • Mechanisms • Jigh-cost support • CETC trends • Refining and Improving • Duplicative support • Service standards • Contributions

  14. Supplemental Solutions • Intercarrier Compensation (ICC) • Payment for use of network • Arbitrage and access avoidance • Access minute trends • Rural Utilities Service

  15. Recap 2 • Carriers of Last Resort • Costs and Challenges • Supplemental Solutions

  16. Transition to Broadband • National Broadband Plan • Connect America Fund • Now and on the Horizon

  17. National Broadband Plan • ARRA • Directive to FCC • Workshops, Comments • Report as Prelude to Change • NBP Recommendations • Speeds • Mobility • Funding

  18. Rulemaking Schedule

  19. National Broadband Plan • ITTA “Eight Principles” • Reasonably comparable • Evolving definition • Needs-based fund size, avoid arbitrary cap • Broader contribution base • POLR obligations for recipients • Service standards • Limited supported providers per geographic region • Commitment to provide voice service

  20. Connect America Fund • Transition to Broadband • Legal • Financial • Industry Reactions • Small rurals • Large BOC • Mid-size

  21. Now and on the Horizon • Mobility Fund • Comprehensive High-Cost and ICC reform

  22. Conclusion • Perspective informs viewpoints • History, obligations, market conditions, and experience • Federal mandates must be accompanied by proper incentives

  23. ITTA Independent Telephone & Telecommunications Alliance 1101 Vermont Avenue, NW, Suite 501 Washington, DC 20005 202-898-1520 www.itta.us

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