The AT&T-Mobile Saga Continues: Rural Carriers vs. Rural Organizations

I finally summoned the motivation to read through a month's worth of AT&T/T-Mobile merger filings. Did I learn anything new? No, not really. I've been following AT&T/T-Mobile happenings closely on Twitter and in the news, and I've been waiting for a big story to break that I can write about without sounding like I'm just reiterating what everyone else has been saying. Ironically, the latest big story is literally about merger supporters reiterating what AT&T has told them regarding the alleged benefits of the merger. Last week, the president of GLAAD resigned after it was discovered that the organization submitted a letter in support of the merger which AT&T had written for them. I don't have a problem when numerous companies/organizations submit essentially the same comments in proceedings, but rubber-stamping form letters that supposedly express a group's unique perspective is just deplorable public policy—especially if the letters are written by a company that gives the organization money. GLAAD is not the only organization with questionable motives in support of AT&T/T-Mobile, and this situation has made me extremely suspicious of all of the filings in support of the merger submitted by groups who basically have no clue about the potential harms the merger will cause. No offence to the myriad groups of hotel owners, minority businessmen and women, cattle ranchers, pipefitters, local tourism boards, women farmers, chambers of commerce, Spanish language journalists, Asian-Pacific Islanders in America, senior citizens, aerospace mechanics, Lupus foundations…and the International Rice Festival?!? It's not that I don't value your opinions—I just don't think they are your opinions. But, I believe that you believe that the AT&T/T-Mobile merger will benefit your constituents even though I don't see any evidence to back these positions.

Sarcasm aside, I was really concerned about the number of rural organizations that voiced support for the merger, especially because rural telecommunications providers are largely opposed to the merger. The Rural Telecommunications Group (RTG), a leading organization of rural wireless providers and a sponsor of the No Takeover Project, noted in their May 31 petition to deny that "it is rural consumers who stand to lose the most in a post-merger marketplace," and "the unimpressive truth is that the addition of T-Mobile's network to AT&T's existing footprint only increases the geographic size of AT&T's network by a mere one percent" (pg. 14). Unfortunately, rural consumers, governments and organizations have apparently been duped by *someone* into thinking that AT&T will become some kind of wizard or genie who will magically make low-cost and high-quality broadband appear in areas with 2 customers per square mile. The West Virginia Farm Bureau argues that "As West Virginians fight lingering unemployment and dig deeper into their pocketbooks for gas and commodities, most of us would welcome new opportunity—and lower prices. That trend may be just over the horizon, thanks to the pending merger between AT&T and T-Mobile" (pg. 1). The WVFB also details how important broadband is to farmers and rural residents because it enables them to "track markets, research equipment and methods, and communicate with markets around the world…develop and expand their farms with web-based sales…sell directly to markets and individual customers around the world." WVFB, I couldn't agree more, but I think this comment would be more appropriate in the USF Reform proceeding. West Virginia is notoriously one of the worst states for wireless service, and I don't see how AT&T-Mobile will suddenly decide that WV is an attractive market with a high ROI. I sincerely hope the WV farmers get the high-speed broadband that they deserve, but I just don't think the AT&T/T-Mobile merger will do anything to achieve this goal. Here's an easy test you can utilize to get an idea of whether or not AT&T/T-Mobile will serve your rural area post-merger:

1. Is there currently good-quality AT&T service in your rural area?
   
2. Is there currently good-quality T-Mobile service in your rural area?
   
3. Bonus question—is there a good-quality small/regional wireless carrier in your rural area?
   

If you answered "no" to A or B, then don't count on having lightning-fast 4G service from AT&T shortly after the merger is approved. If neither company has or utilizes spectrum in a rural area, they simply cannot provide service there without acquiring additional spectrum currently held by a real rural wireless provider. If either company has historically shown little interest in serving your rural area, don't count on a sudden attitude adjustment. Furthermore, if you have a small wireless carrier serving your rural area, well… Best of luck to you. According to RTG, small wireless carriers will face increasing anticompetitive pressure from AT&T-Mobile as they will not be able to negotiate cost-effective roaming agreements. RTG's petition to deny filing explains that "AT&T has also been known to harm its own rural consumers by denying them regional roaming access on small competitors. In one such example, AT&T suspended its customers' outbound roaming in select markets in north Texas, despite the fact that AT&T's coverage in those markets was not as extensive as the roaming partner's coverage. AT&T can easily afford to allow its customers to roam off-network, judging by its multi-billion dollar annual net revenue, but instead it deliberately has chosen to deny that option to its rural subscribers" (pg. 25). To sum it up: the merger most likely will not improve wireless broadband service in extremely rural areas and it will possibly put small rural wireless carriers out of business. If you still aren't convinced, take a look at this helpful map from page 61 of the RTG comments. This map was discussed in last month's Wireless Industry Consolidation Webinar (which I wrote about here). The white areas on the map indicate areas where there is neither AT&T nor T-Mobile service. Kansas, Nebraska, South Dakota, North Dakota, Wyoming, Montana, Nevada, Maine, and extremely rural portions of other states—I'm sorry; the merger will not benefit you. 

The rural organizations who support the merger predictably and erroneously claim that the merger will create all these wonderful opportunities for their respective groups. The Montana Farmer's Union argues that "the combined resources of AT&T and T-Mobile, along with an additional $8 billion investment in infrastructure, will make mobile broadband accessible to almost the entire country's population." The Arizona Cattle Feeder's Association expects the merger will help improve border security, for apparently they have "endured no greater challenge to [their] business and quality of life than border security." The Women Involved in Farm Economics believe that the merger should be approved because "better wireless service has the potential to improve non-farm economic life in many hard-hit rural areas that have seen tragic declines in manufacturing and building jobs," and "for an increasing number of farmers and ranchers, advanced wireless systems hold remarkable promise for better, more productive lives." It really hurts me to argue against rural organizations who are clearly in need of reliable wireless broadband and who understand the importance of broadband for rural areas, but I feel strongly that these groups are wrong to assume that the AT&T/T-Mobile merger will make a difference in their rural lives. If they put half as much effort into advocating for RLECs in the USF Reform proceeding, I would probably be able to sleep better.

As evidenced by RTG's exceptional arguments against the merger, rural telecommunications carriers have vastly different opinions than rural consumers/organizations. Actually, it isn't fair to include consumers in the groups of supporters of the merger—AT&T isn't paying off individual consumers (yet anyway, as far as I know), and one consumer comment that likened AT&T to a rapist has been haunting me for the last month. I've seen very little evidence that end-use consumers support the merger, rural or otherwise. Anyway, I was pleased to see that several Iowa rural telecommunications providers submitted opposition comments. FMTC Wireless, Breda Telephone Corporation, Webster-Calhoun Cooperative Telephone Association, and Marne & Elk Horn Telephone Company, all RLECs and providers of iWireless service, voiced their concerns about the merger's potential impact on their "continued ability to provide high-quality advanced wireless telecommunications services to communities and underserved areas in rural Iowa." Each of these companies echoes the concerns raised by iWireless, and they argue that "the iWireless partnership with T-Mobile has been extremely important to our businesses. It has given us access to partitioned spectrum in our rural communities and it has helped to create a larger market and more diverse ecosystem for GSM and UMTS/HSPA infrastructure, equipment and handsets. It has also given us a reliable partner for inbound and outbound roaming and it has given our customers access to a ubiquitous nationwide GSM/UMTS network with voice and high-speed data capabilities."

If the merger is approved, iWireless faces a precarious situation. Although iWireless does not specifically ask for the merger to be rejected, they do ask for the FCC to "agree to certain commitments to foster the continued prevision and expansion of wireless services in rural areas" (petition to deny filing, pg. i.). iWireless is a close relative to T-Mobile (here's how they explain the relationship: "Deutsche Telekom holds a 100 percent ownership interest in T-Mobile, which in turn indirectly holds a 100 percent ownership interest in VoiceStream PCS. VoiceStream PCS holds a 54 percent interest in Iowa Wireless, and DT is authorized by the Commission to hold up to a 60 percent indirect interest in Iowa Wireless, pg. i.). Not to make things more confusing, but then iWireless is in "contractual relationships with 76 small independent telephone companies to extend the reach of its network to include remote rural areas." From what I've been told, the iWireless partnership has been very beneficial for Iowa RLECs and rural customers, and it has facilitated considerable investment in rural wireless networks.

As a subsidiary of T-Mobile, iWireless faces an uncertain or at least challenging road ahead. AT&T has remained mum on the subject of the fate of iWireless if the merger is approved, and "since the announcement of the AT&T/T-Mobile transaction, Iowa Wireless has not been able to obtain any information regarding how—if at all—AT&T will incorporate Iowa Wireless into its long-term plans, nor has Iowa Wireless been able to determine what impact, if any, the transaction will have on Iowa Wireless's rural customers with respect to continued network access at reasonable rates" (pg. 4).To me, this sounds very bad—for RLEC partners and rural consumers especially. To me, this is evidence that AT&T does not have a strong commitment to rural areas, despite what they may claim or convince/pay niche rural groups to claim for them. iWireless has 250 stores and authorized dealers in the Midwest, which surely employ thousands of people. iWireless also provides service to rural areas that "do not have the necessary subscriber densities or potential returns on investment to attract large carriers to invest in the infrastructure…required to serve residents in those locations" (pg. 3). iWireless stops short of outright opposing the merger, but they do request that the FCC impose a variety of conditions such as ensuring that AT&T continue to provide roaming for iWireless partners and making sure that AT&T does not repurpose iWireless spectrum.

I personally do not like the division that has emerged between rural telecommunications carriers and rural consumer/trade organizations, but misinformation is clearly to blame. I encourage RLECs who oppose the merger to come up with creative ideas to educate and inform your consumers about the likely outcome of the merger—that rural areas will not benefit, competition will decrease, jobs will be lost, prices will increase, quality will be compromised, etc. There is plenty of evidence to illustrate the multitude of harms that could befall rural consumers, and there are many advocacy groups who are working tirelessly to provide great information about the merger—information not written by one of the parties involved in the merger!

I will be watching for new information about the future of iWireless, and I am hoping someone will tell me why exactly the International Rice Festival supports the merger.

Next week I hope to look at some international examples of successful USF models. A kind reader from Pakistan e-mailed me some information today about Pakistan's USF program, and I am excited to learn about it.

Cassandra Heyne

ruraltelecommentary@gmail.com

Connecting the Dots between Smart Grid and Broadband Deployment Challenges

This morning I attended a smart grid briefing breakfast at the United States Telecom Association (USTelecom), "Promoting Investment & Innovating in Smart Grid." I've stepped away from smart grid issues for the last couple of months, since my class ended, in order to focus almost exclusively on USF Reform. However, I haven't abandoned my interest in the smart gird, so I was happy for the opportunity to attend another event featuring smart grid power players here in DC. The panelists at this event covered a wide variety of popular smart grid debate topics, from consumer perception to investment challenges to recent government initiatives. Throughout the conference, I continually drew connections between the telecom realm and the utility realm in deploying what are widely considered two of the greatest infrastructure challenges of our time: modernizing the utility grid and modernizing the telecom network. If you have read some of my previous posts on the smart grid, then you will know that I firmly believe that the telecom and electric utility industries are rapidly converging, and I also firmly believe that there are endless opportunities for telecom providers of all shapes and sizes to seize to help facilitate smart grid deployment. However, there are a lot of regulatory uncertainties in both industries, and there are many daunting challenges that both industries must overcome to not only converge, but to achieve their stand-alone goals of ubiquitous broadband and smart grid. It is also becoming clear to me that the smart grid will never achieve its full potential without cooperation from the telecom industry, and if the telecom industry does not play nice with the utility industry then there will be duplicate broadband networks where the utility provider becomes a competitor to the telecom provider—and who wants that to happen? Not me.

There is already some evidence of this phenomenon emerging in rural areas, as an electric cooperative in Missouri recently announced its intent to deploy FTTH to meet dual smart grid and broadband deployment goals. Ralls County Electric Cooperative received a $19.1m grant and matching loan from the Rural Utilities Service (RUS), and plans to complete the FTTH network, which will cover 4,500 homes and 300 businesses with 1,200 miles of fiber, by May 2013. Overall, I am very excited to see another example of a rural cooperative serving the double role of utility and broadband provider, but I also hope that more rural telecom cooperatives will follow in the footsteps of NineStar Connect in Indiana. Electric cooperatives entering the broadband market are a competitive threat for rural telecom cooperatives/companies, but not necessarily—there are opportunities to consolidate infrastructure and achieve broadband and smart grid deployment goals without one stepping on the toes of the other.

The panel at the USTelecom conference included Jeffrey Dygert (AT&T), Betty Ann Kane (Washington DC Public Service Commission), Mike Oldak (Utilities Telecommunications Council), Larry Plumb (Verizon), and Nick Sinai (White House Office of Science and Technology Policy). The panel was moderated by Robert Mayer from USTelecom. The session kicked off with a short presentation on a recent survey by Black & Veatch. The survey respondents included executives, managers, supervisory personnel, technical and support staff from many types of utility companies (integrated, generation only, etc.). The most interesting finding to me was that even the utility industry is having a hard time defining what the "smart grid" actually means. If the utility industry doesn't believe that the smart grid is well defined or understood, how on earth will consumers define and understand it? Do any of my telecom readers see a connection here with the challenges of defining "broadband?" Practically every corner of the telecom industry has a different definition—from 1.5 Mbps to 100 Mbps, technology-specific, technology-excluding, and so on—the only consensus on the definition of broadband is that there is no consensus on the definition of broadband. When you consider the role of the consumer in defining terms like "broadband" and "smart grid," precise definitions get even more incoherent and divided. Other interesting findings in the Black & Veatch survey included: utilities have a negative impression of the business case for the smart grid, and utilities widely believe that state regulators are not on the same page in terms of expectations and visions for the smart grid (30.6% of respondents reported that they perceive their visions/expectations and the visions/expectations of state regulators as "miles apart"). Doesn't this sound like the telecom industry too? Rural telecom providers and state utility boards are definitely not always on the same page in terms of broadband investment, deployment and adoption goals. I would bet that like the utility respondents, only about 0.5% of rural telecom industry players would report that they are "extremely in sync on vision and all critical issues" with their state regulators too.

The other corresponding challenge shared by the broadband and smart grid realms is return on investment. The Black & Veatch survey reported that only 9% of all utility respondents are "very confident" that they will be able to recover smart grid investments effectively and quickly. I would bet a similar percentage of rural telecom providers feels very confident that they will be able to recover major broadband infrastructure investments at a pace fast enough to justify the cost. With regulatory uncertainty over USF Reform, rural telecom providers who are very confident they will recover broadband investments quickly are undoubtedly becoming an endangered species. If sources of private investment are scared away as a result of the regulatory uncertainty over USF, how will any rural telecom provider justify the business case to invest in broadband in extremely high-cost areas? This is the fundamental challenge the rural telecom industry faces right now, and I find it really interesting that the utility industry is also uncertain about the return on investment for smart grid projects.

Take a look at the following chart, illustrating impediments to smart grid implementation (1 being lowest, 5 being highest impediment). How many of these impediments are shared by the rural telecom industry regarding broadband deployment? *Click image to enlarge.

I count at least 6 shared impediments to achieving smart grid and rural broadband ubiquity: the business case does not justify the investment; customer's lack of interest and knowledge (but to a lesser extent with broadband); it takes too large of an upfront investment; funding uncertainty after stimulus funds (or private investment, for telecom) are gone; commitment to manage, operate and upgrade is daunting; regulators will oppose/delay; and regulators will provide inadequate returns on investment. My question is: how can telecom and utility providers collaborate to overcome or at least mitigate some of these impediments, so that the smart grid and broadband goals can be achieved?

The panelists at the USTelecom conference discussed the challenge of regulatory uncertainty over cost recovery for utility providers, noting that some utility providers have been slow to invest in smart grid upgrades because of this challenge. If the government wants all Americans to have access to broadband and smart grid benefits, then something must be done about these cost recovery uncertainties—on the telecom side, the FCCs proposed USF reforms are certainly not helping. I think there is a lot more customer resistance to smart grid technologies than broadband, but we know that broadband adoption in the US is not a shining example of public policy. I thought about the differences and similarities between smart grid and broadband acceptance and adoption as the panelists described efforts to get consumers on board with the smart grid. I discussed this issue in my review of the UTC Smart Grid Policy Summit back in April, where panelists at that conference described how for the first time in the history of electricity, consumers are being asked to actively participate in the relationship between consumer and utility, rather than just writing a check each month in exchange for continuous service. Larry Plumb noted that when the telecom industry modernized 25-30 years ago, consumers were not involved in the process—telecom providers upgraded to digital switches and consumers were none the wiser, and their telephone habits did not have to change. With the smart grid, utilities are trying to get consumers to completely change their electricity consumption behavior, but unfortunately "most will never care," as Plumb said in the discussion this morning.

I will continue to look for ways in which telecom providers and electric utilities can collaborate on smart grid and broadband deployment goals, but at this point a high level of convergence between the two industries seems very far away. If neither electric utilities nor telecom providers can be assured that investments in smart grid and broadband infrastructure are worth the cost and headache, these critical infrastructure goals will not be achieved anytime soon.

The Black & Veatch survey, "Managing the Transition in the Electric Utility Industry," is available here—I recommend taking a look at it, there are some interesting findings.

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You may have noticed that Rural TeleCommentary got a new look—I want to thank Doug Pals and his marketing team at Re:Sourceful Communications for the awesome new logo!

I may be taking a short hiatus from USF Reform issues on this blog, but I am still analyzing reply comments, ex parte filings and other USF news for the JSI Capital Advisor's Blog, so be sure to check that site to get your USF fix.

Later this week, I will be returning to everyone's favorite topic—the AT&T-T-Mobile merger! I haven't written anything on the merger in the last month, because frankly, nothing has happened except a lot of complaining and the president of GLAAD resigned because he filed a letter in support of the merger which was written by AT&T, who donates money to the organization. I'm trying to come up with a fresh take on the topic—one that hasn't been beaten to death by every single telecom media channel.

Cassandra Heyne

ruraltelecommentary@gmail.com

USF Reform Reply Comments Face-Off: The Rural Associations Question NPRM’s Legal Stability

Reply Comments on Universal Service Fund Reform were due Monday, May 23, concluding the comment-and-reply cycle for this proceeding. Today I am analyzing reply comments filed by the Rural Associations (NECA, NTCA, OPASTCO, WTA and concurring state/regional associations). This will be my final USF reply comment summary for Rural TeleCommentary, but I will continue to analyze USF Reform filings for the JSI Capital Advisors Blog over the upcoming weeks.

These reply comment summaries are in regards to the following FCC proceedings (the USF Reform and Connect America Fund NPRM): WC DN 10-90, GN DN 09-51, WC DN 07-135, WC DN 05-337, CC DN 01-92, CC DN 96-45, WC DN 03-109.

The Rural Associations (NECA, NTCA, OPASTCO, WTA, and State Associations)

In their initial comments, the Rural Associations primarily focused on outlining their alternative solution to the FCC's USF Reform NPRM, the "RLEC Plan;" but in their reply comments, the Rural Associations really honed in on a wide variety of questionable proposals in the NPRM and on comments submitted by opposing parties. The Rural Associations dug deep and questioned the FCC's legal authority on many aspects of the NPRM, and they argued "the Commission should not put at risk the delicate balance that makes quality voice and broadband services available and affordable to wide swaths of rural America on a 'bet' that novel, untested reforms might prompt the deployment of broadband in the outlying portions of larger carriers' serving areas" (pg. 3). Furthermore, the Rural Associations promote the RLEC Plan as a workable alternative solution that will achieve the FCC's underlying goals of fiscal responsibility, accountability and modernization of USF. The Rural Associations insist that "rather than betting America's broadband future on grand visions, untested schemes, and complicated, circuitous and legally questionable processes, there is a clear and straightforward roadmap for what has worked—and what has failed—in promoting affordable broadband in rural America" (pg. 5-6).

On the FCC's Shaky Legal Authority to Implement the NPRM's Recommendations: The Rural Associations argue that the FCC's USF proposals in the NPRM will result in ongoing litigation, uncertainty, complications and significant delay in achieving ubiquitous broadband. If the final reforms do not follow existing telecommunications statutes, the decisions will "enmesh the Commission and the industry in unending controversies and legal battles" (pg. 16). First, under Sections 254(b), 254(c), 254(e) and 214(e)(1), high-cost support can only support telecommunications services provided by common-carrier ETCs, and the FCC cannot make "legal 'short-cuts' or sidestep any limitations in the underlying statute, no matter how commendable the proposed policy or desirable the result" (pg. 17). The Rural Associations note that the FCC cannot force the "square peg" information service into the "round hole" of statutes that apply only to telecommunications services (pg. 18). Furthermore, the FCC does not have Section 706 ancillary authority to bypass parts of the Communications Act that apparently stand in the FCC's way on the path to achieving National Broadband Plan goals, nor can the FCC apply Section 10 forbearance authority to override Section 254(c). According to the Rural Associations "Section 10 does not empower the Commission to expand its own authority, or to decide that a statutory provision that applies only to telecommunications services should apply to other services" (pg. 22). In plain English, the FCC is not just pushing legal authority boundaries in the USF NPRM; it is trying to tear them down altogether. The Rural Associations comment that they are not opposed to the goals of the NPRM, rather the processes for which the FCC intends to implement to achieve broadband goals: "overwhelming support for a policy objective does not translate into legal authority to reach that end by any means possible" (pg. 23).

On Including Non-Regulated Revenue in High-Cost Support Calculations: Basically, the Rural Associations do not support the inclusion of non-regulated revenue in high-cost support calculations because doing so "would create a legal and practical quagmire" (pg. 27). The Rural Associations question how the FCC would go about determining which non-regulated revenues could be included in the support calculations: "what if the would-be USF recipient operates a retail store, a carwash, a construction business, or a data center—should the net revenues from those operations be included in support calculations?" (pg. 29). Including a wide range of non-regulated revenue would not only be a tremendous burden to USAC, but it would undermine the FCC's primary USF Reform goal of increased accountability. I would imagine that including non-regulated revenue in high-cost support calculations would actually deter RLECs from pursuing non-regulated revenue streams at a time when RLECs need to be pursing non-regulated revenue streams more than ever.

On Ambiguous and Unworkable Reverse Auctions: The Rural Associations call revere auctions "murky, at best;" and they cite the wide range of opposition to reverse auctions with what I felt was one of the most telling arguments so far:

"If a single lesson can be drawn from the thousands of pages of comments submitted in numerous proceedings over the past several years involving potential use of reverse auctions, it is that no party has been able to offer an example of a fail-safe reverse auction mechanism, nor has anyone offered an example of a reverse auction mechanism that has successfully been put into use anywhere in the world in a situation similar to the one currently under consideration" (pg. 39). 

According to the Rural Associations, there is no workable solution proposed for reverse auctions, the FCC's authority to implement reverse auctions is shaky, and reverse auctions would be completely ineffective anyway. Implementing something so risky and unproven is absolutely not the right way to go about distributing high-cost support to advance broadband in rural areas. Instead, the Rural Associations argue that "the best way to deploy broadband in unserved area is to take what has worked and recalibrate it as needed to support new objectives, rather than 'throwing all the cards up in the air' and hoping they land in an organized manner" (pg. 43).

On Capping the High-Cost Fund: The Rural Associations do not support capping the high-cost fund at 2010 levels, arguing that this proposal also has no solid legal foundation. The Rural Associations believe the FCC is misguided in thinking that the Fund should be capped, and "there is a fundamental inconsistency between the requirements of the Act and the Commission's insistence that the size of the High-Cost program cannot increase" (pg. 62). Most importantly, "the law does not make any reference to the imposition of a cap on the size of the USF or on any of its individual programs (pg. 62, emphasis my own). The Rural Associations differentiate between managing the size of the fund and restricting the size of the fund, and they argue that capping the fund is contrary to the FCC's mandate to ensure sufficient and predictable support. The Rural Associations support expanding contributions, which is really the only reasonable solution at this point despite the fact that the FCC is not currently considering this option.

My Thoughts: I hope I am not becoming too repetitive in these comment summaries, but I cannot stress how important this proceeding is for the rural telecom industry. The Rural Associations provided excellent analysis on the FCC's questionable legal authority to implement the NPRM, and it really scares me to think about the potential devastating impact that some of the FCC's proposals may have on RLECs. Furthermore, not having legal authority has not stopped the FCC from implementing other significant recent decisions such as Net Neutrality. Reverse auctions literally seem more and more ridiculous to me every day. How can a regulatory agency think of implementing such a radical deviation from the norm without any solid evidence that the solution will work? I realize that the FCC has a duty to consider innovative regulatory changes from time to time, but reverse auctions are so far from a practical methodology that the potential negative aftermath is literally unfathomable to me. There is no reason why the FCC should need to discriminate against an entire sector of the industry—consisting of thousands of companies with tens of thousands of employees and millions of customers—in order to hastily push forward rules that may or may not actually contribute to reducing the country's broadband gap. The Rural Associations consistently point out how great of a job RLECs have done at deploying rural broadband with extremely limited resources, versus price cap carriers who have historically ignored high-cost rural areas despite having considerable resources at their disposal. I agree with the Rural Associations that the ultimate goal of increasing broadband deployment is admirable and necessary, and there are aspects of the current USF system that do need to be modernized for a broadband world. However, the FCC needs to be really careful that the final rules do not do more harm than good.

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This concludes my series of comment and reply comment summaries for the USF Reform proceeding, but I will naturally continue to analyze and comment on USF Reform news and developments on as the decision unfolds. I am hoping to hear soon about the rumored collaboration between AT&T and RLECs on a consensus proposal, but I do not have any specific information about this yet. Please continue to check the new section on this site, "USF Reform Headquarters," which will be updated weekly with links to news reports on USF reform and to the articles I write for JSI Capital Advisors on this topic.

Now… What should I write about next?

Cassandra Heyne

ruraltelecommentary@gmail.com

Trying to Overcome Dark Forces in the Rural Telecom Industry

Minnesota rural telecom cooperatives attempt merger for the second time, and other news from this week.

This week has been quite interesting for me—there have been numerous articles and events which have caught my attention and kept me constantly thinking about how exactly the rural telecom industry is going to overcome the monumental challenges ahead with USF Reform, the National Broadband Plan, Net Neutrality, the AT&T-T-Mobile merger, and basically the list goes on for a while… Additionally, several media outlets have published interesting stories on the impact of broadband (or lack thereof) in rural areas. From my perspective, two things are clear: rural America needs broadband now, and barriers must be reduced so that rural telecom providers can provide said broadband in rural areas. Regulatory and financial barriers are not the only thorns for rural telecom providers right now, as we will see in the following story about two rural telecom cooperatives in MN who tried twice, and failed twice, to merge in order to have a better chance at navigating the perilous regulatory waters ahead.

Earlier this week, Blandin on Broadband and the Willmar, MN West Central Tribune reported on a proposed merger between Farmers Mutual Telephone Company (Bellingham, MN, 1.037 access lines) and Federated Telephone (Chokio, MN, 2,350 access lines). The two cooperatives hoped to create a merged cooperative called Advanced Communications in Rural America. According to the West Central Tribune and both cooperatives' General Manager Kevin Beyer, the company's bylaws called for members to vote in person, and the cooperatives failed to obtain a supermajority in favor of the merger in the first vote last November. The cooperatives then changed their bylaws to allow voting by mail-in ballot, in hopes that this would help them achieve the supermajority needed to approve the merger. Unfortunately, the results of Thursday's vote were strikingly similar to the previous vote: Federated Telephone Company members voted 90% in favor of approval in both votes, but only 57.5% of Farmers Mutual members approved the vote in the second round (a decrease from 59% approval obtained in the November vote).

I had a brief conversation with Kevin Beyer, where he expressed disappointment about the result. He said he had hoped the merger would create a stronger cooperative—a cooperative that would be better positioned to overcome the troubling regulatory challenges that the rural telecom industry knows all too well right now. I asked why the merger was not approved, and apparently there was a group of members who strongly opposed the merger who managed to sway enough power to prevent it from happening. However, Beyer added that this group of members never really explained their reasons for opposition, which leads me to the assumption that this is a bad case of small town politics interfering with a potentially valuable business decision, which could have passed benefits along to the community. According to the West Central Tribune, the opponents even placed radio advertisements, but they did not identify themselves.

What is interesting is that the two cooperatives share a general manager and switching and network facilities. My co-writer at JSI Capital Advisors, Richelle Elberg, shared that "the cooperatives had advertised that they could have saved $200,000 per year in expenses and that the uncertainty surrounding Universal Service Funding and other competitive concerns made the merger an important strategic move." Furthermore, no jobs would be lost and both cooperatives' head offices would remain open (JSI Capital Advisors article here).

So what went wrong? I suppose we will never know for sure, but I suspect the opposing members simply do not understand the telecommunications industry well enough to make an informed decision. This tends to be one of the pitfalls of rural cooperatives, where each customer is a voting member with power to drive major decisions. Something tells me that the opposing members did not sit down and read the FCC's 300 page NPRM on USF Reform, nor did they attend an NTCA or OPASTCO legislative conference and lobby Congress on rural telecom issues (but I could be wrong, who knows). However, the general manager and board members possibly did do these things to some extent, which led them to the conclusion that merging is the only way to strengthen the company to face these challenges. The fact that the opposing members did not identify themselves or offer an explanation for their opposition is a real red flag for me, and I can only speculate that small town politics killed this deal.

If you would have asked me a year ago about how I felt about small rural companies merging in order to try to reduce the negative impact of the National Broadband Plan, I would have probably gotten really defensive and angry—in fact, that actually happened at least once. However, my feelings about rural telecom consolidation are starting to change, and I now believe that if the conditions and motivation are right, some of the extremely small RLECs should certainly consider merging (I will most likely write about this topic in greater detail in the near future). It seems as though Federated and Farmers Mutual would have been a great match, and this merger could have possibly paved the way for other small rural cooperatives to take the plunge. Beyer told me that he does not see another vote in the future, and the two cooperatives will just have to do their best to survive. I wish them the best of luck.

Meanwhile, rural Americans are clamoring for broadband. There was a truly excellent two-part series this week on one of my favorite rural blogs, Daily Yonder, by Karl Stauber. Part 1, "Finding a New Rural America," takes a hard look at the disparity between "Old Rural," which is dominated by declining populations and last-century single-economy mentality, and "New Rural," which focuses on innovation, opportunity and a high quality of life. Stauber describes the duality, "Old Rural is often about very limited connectivity between urban and rural. New Rural is intentionally about broad connectivity.  New Rural is about helping regional efforts to build diverse, evolving competitive advantage that grows the amount and distribution of wealth." Part 2, "To Live or Die in Rural America," discusses the challenge that rural America faces in an increasingly urban-centric political environment. Stauber insists that new policies are necessary to ensure that rural communities, economies and cultures survive and thrive. Broadband is the key to the survival of rural communities, and Stauber comments:

"Rural communities have a double disadvantage in making high-speed access universally available.  The population in many rural areas tends to be older, poorer and less educated—all predictors of low utilization of the Internet, thus challenging the economics of traditional utility models. 

In addition, rural areas are often lumped in with urban areas when geography and bandwidth are allocated.  Most companies see more opportunity to make a return on their investment in higher density urban areas, leaving rural parts of their service areas with minimal or little access.

Federal policy should require that Internet access in rural areas be developed at the same rate as adjacent metropolitan regions or that rural utility cooperatives should be given priority when bidding occurs that includes rural regions."

I highly recommend reading Stauber's series if you have not done so already, if anything to gain a better understanding about rural areas in general.

What needs to happen in order for rural telecom providers to overcome the myriad challenges and negative forces facing the industry is facing? Unfortunately, I do not have all the answers to that question, but having good rural leaders and allies in Congress and at the FCC would definitely be a great start. Earlier this week, OPASTCO issues a press release recommending Brian Hendricks, Chief Counsel for the Senate Committee on Commerce, Science and Transportation, to take former Commissioner Baker's empty seat at the FCC. Naturally, I was curious about this individual, and I did a little investigating and he seemed like a great rural ally as he comes from rural Texas. I had no idea on Wednesday when I read the press release that I would actually end up meeting Mr. Hendricks on Thursday! Several distinguished faculty members from my school, University of Colorado, hosted a reception at the DC Disney headquarters to honor three students who were chosen to intern at the FCC and Senate. It turns out that Mr. Hendricks is a big fan of my graduate program at CU, and one of the interns (also a classmate of mine) happens to be working at his office for the summer. Anyway, when he introduced himself I was so excited and I actually said "are you the same Brian Hendricks that OPASTCO recommended for the FCC position?" I ended up having a really wonderful conversation with him, and I can say with certainty that he would make a fantastic FCC commissioner and I sincerely hope he is seriously considering the job. We discussed the importance of an interdisciplinary telecommunications education for telecom professionals, and of course we talked about USF Reform. He fears that the FCC's USF Reforms are misguided and hasty, and he shares practically all of my concerns about the finer points in the reforms. I am so honored to have had the opportunity to talk to him, and he is definitely my top "person of interest" in rural telecom right now.

In other news this week, I had an informal meeting with a member of the FCC where we discussed FCC administrative procedures and I learned about the Wireline Competition Bureau and the Pricing Policy Division—as it was an informal meeting, we could not discuss things like USF Reform or the AT&T merger, but it was still a terrific opportunity for me to learn more about the FCC process. I was encouraged to get involved with filing comments and attending ex parte meetings in the future. Additionally, the Iowa Telecommunications Association hosted a Rural Telecom Forum on June 6, which I did not attend, but heard from attendees that it was a great event. Iowa farmers and Rep. Tom Latham (R-Fourth District) discussed the importance of broadband for Iowa's agricultural economy, and there is a video clip from the Forum here: http://www.whotv.com/news/agriculture/. To see the video, go to the "Afternoon Agribusiness Report (6/7/11)" clip under the video box, and the Rural Telecom Forum coverage is a few minutes in after the farm report.

I hope to complete my reply comment summaries this weekend, and I also added a new feature, "USF Reform Headquarters" at the top of the page where you can go to get the latest news on USF Reform, as well as a comprehensive list of all the blog posts I have written on the subject for both Rural TeleCommentary and JSI Capital Advisors Blog.

Have a great weekend!

Cassandra Heyne

ruraltelecommentary@gmail.com

USF Reform Reply Comments Face-Off: A Tale of Two Menacing Price Cap Carrier Plans

Reply Comments on USF Reform were due Monday, May 23, concluding the comment-and-reply cycle for this proceeding. Today I am summarizing comments from Windstream and AT&T (a mid- and large-sized price cap carrier, respectively), which I chose to illustrate the opposition that the rural carriers are facing. I also picked these two price cap carriers to illustrate overlays and differences between this subset of commenters, and because Windstream and AT&T have made their own unique proposals for USF Reform. Which group will have the most sway with the FCC? That remains to be seen, but there have been rumors swirling for a while now that AT&T and other large/mid-sized carrier are working with rural carriers/associations to come to some form of consensus and submit an alternative plan to the FCC. Based on comments and reply comments, I don't see much proof of a consensus between these opposing groups, but there are indications that even the price cap carriers are not completely satisfied with the FCC's proposals. I've said it before, and I will say it again: everyone wants the money, and there is just not enough of it to go around barring some sort of expanded contributions base for USF.

These reply comment summaries are in regards to the following FCC proceedings (the USF Reform and Connect America Fund NPRM): WC DN 10-90, GN DN 09-51, WC DN 07-135, WC DN 05-337, CC DN 01-92, CC DN 96-45, WC DN 03-109.


 
Windstream Communications, Inc.

Windstream, a mid-sized price cap carrier, submitted initial comments (which I summarized back in April), which called for a "Price Cap Areas First" (PCAF) proposal, which is exactly what it sounds like: price cap carriers would get first dibs at CAF support for broadband in unserved areas. Although I disagree with Windstream that the PCAF proposal is the best way to target support to high cost areas, I did surprisingly agree with some of Windstream's reply comments on other topics.

On Mid-Sized Carrier Economics: Windstream favors a federally directed ICC reform methodology, not state-directed, which would be too slow and lead to economic distortion. Windstream also favors some type of revenue recovery mechanism, but not a "make whole" mechanism where all lost ICC revenue is recovered. Windstream provided some interesting analysis on the economics of mid-sized carriers to argue in favor of a recovery mechanism. Windstream claims that mid-sized carriers need a recovery mechanism even if the companies are profitable and issue dividends, due to the basic business principles of publicly traded companies. According to Windstream, "mid-sized carriers like Windstream rely on private investment to service debt, finance broadband deployment, and otherwise remain financially sound" (pg. 16). Basically, investors look for companies that pay dividends and see profits, and Windstream needs private investment to avoid increasing its reliance on USF subsidies while also meeting the FCC's goals for broadband. Windstream has a "duty of care to their shareholders," and "fulfillment of this duty includes not undertaking projects for which there is no rational business case—such as broadband deployment in some high cost areas" (pg. 17). In this powerful statement, Windstream literally admits that large investor-owned carriers do not invest in high-cost/low-density rural areas because it is unprofitable and contrary to stockholder wishes. Think about that for a minute, and you will understand why it is so important that localized, small rural carriers are the most appropriate recipients of USF—they have a duty to serve their communities (which in the case of cooperatives, the community is the owner), rather than Wall Street. I am not disputing the economic principles behind investing, dividends and profitability; but I deeply question Windstream's commitment to serving unprofitable rural areas because of these principles.

On ILECs vs. CETCs and Unfunded Mandates: Windstream supports a quick phase-out of legacy CETC support, where this funding is redirected to targeted high-cost areas (and preferably a price cap carrier). Windstream opposes the identical support rule for CETCs, calling it wasteful and attacking the Rural Telecommunications Group's claim that the FCC will abandon rural consumers by phasing out CETC support. Windstream argues that ILECs and CETCs "are not similarly situated with regard to their need for legacy support," because ILECs have COLR obligations and strict rate regulations, whereas CETCs do not have COLR obligations and have much more freedom to choose service areas (pg. 20). Furthermore, Windstream warns the FCC to avoid "unfunded mandates" where telecommunications providers would be subject to broadband requirements before support is in place. Windstream opposes the Joint Board's "POLR Fund" which would impose broadband build-out and service standards before there is any funding for broadband.

On Special Access: Windstream is opposed to including special access revenues in revenue benchmark for determining high cost support, because including special access "would create a mismatch in the determinations of appropriate levels of support, and likely not align carrier's support levels with their obligations" (pg. 26). Windstream notes that special access is not a Section 254 "supported service," and it is generally a wholesale service provided to other carriers and large businesses, not end-user residential consumers. Furthermore, Windstream adds that there is considerable uncertainty about special access rates which would make it inappropriate for a benchmark: "special access revenues can vary significantly year to year, so including these revenues in a benchmark could result in significant, unpredictable fluctuations in high-cost support" (pg. 27).

On Anchor Institutions: Windstream does not support funding for anchor instructions with CAF support because there is no data that proves anchor institutions lack broadband. Windstream attacks claims by Google and Connected Nation, such as "funding should be dedicated toward building high-speed connections to community anchor institutions" (pg. 31). Windstream argues that providing support to anchor institutions is not meaningful progress for broadband deployment in rural areas, because "anchor institutions offering service for health care delivery, education or children typically are located within or close to urban areas and town centers, which in most cases are economic to serve absent support and already have access to broadband by virtue of their relatively concentrated populations" (pg. 32). There is already funding for anchor institutions through E-rate and the Rural Health Care Support Funds, therefore USF/CAF needs to focus on funding broadband to households in unserved rural areas.

My Thoughts: I thought it was pretty amazing that Windstream came out and essentially said that investor-owned large carriers have no business case or incentive to provide service to areas that have less than 30 lines per square mile or cost more than $41 per line per month (pg. 9). At the same time, I applaud them for saying this—the FCC needs to see how little motivation these companies have to provide service to areas with 2 customers per square mile and a cost per month per line of $250 or more. As I stated above, large carriers do not have the same type of ties to the community as RLECs, where members of the communities they serve are actually owners and employees. It makes a huge difference to the business case when your neighbor of 30 years begs you to provide broadband in the rural countryside, versus just a nameless, faceless consumer, like Linda Rice from the Omaha metro area, who has tried and failed to get broadband from large carriers for years, even though she only lives 4200 feet from broadband infrastructure. Regarding Windstream's comments about anchor institutions, I completely agree—they should not be funded with CAF. There is plenty of money for anchor institutions from other sources—USF and elsewhere—which does not necessitate a need to focus on these institutions to the detriment of actual consumers. How is it beneficial for a rural consumer who lives 30 miles from the closest "anchor institution" when he or she has an emergency that requires a broadband connection immediately? Honestly, I didn't even realize there were comments in favor of dumping CAF into anchor institutions, because it is really ridiculous and not likely to happen anyway.

AT&T

We learned in AT&T's initial comments that AT&T has some very strong opinions about USF Reform—opinions which are strongly in opposition to most RLECs and rural associations. AT&T wants immediate action to eliminate legacy telephone support, and AT&T supports many of the proposals that give the rural telecom industry nightmares, like bill-and-keep and reverse auctions. AT&T makes nothing short of violent statements, and they urge the FCC to act swiftly and not waste time with a Phase I/Long Term CAF stair-step process but rather to implement final rules immediately. AT&T believes that "one of the most harmful actions the Commission could take at this point would be to take no action at all" (pg. 7). I had a hard time choosing which AT&T arguments to highlight, and interestingly there were some I actually agreed with despite being in vehement opposition to most of their proposals.

On Bill-and-Keep: AT&T hopes for an end-state all-IP ICC ecosystem that is wholly driven by the marketplace, not the FCC or states. AT&T supports a zero or near-zero $0.0007 access rate as well as a bill-and-keep structure. According to AT&T, "Bill-and-keep would not limit the amount of recovery, instead it would alter only the source of that recovery. Carriers would need to turn to their own customers…to recoup costs, rather than other carriers, and ultimately, those carrier's customers" (pg. 23). Translation: small carriers would have to raise prices in order to replace lost ICC revenue caused by a bill-and-keep regime. AT&T argues that bill-and-keep will encourage competition, innovation and efficiency. AT&T attacks arguments against bill-and-keep from NECA and ITTA, calling these arguments "misconceived," and insisting that rural carriers are fond of implicit subsidies because "they are subject to less public scrutiny" (pg. 27-28).

On an Alternative Recovery Mechanism (ARM): One of the few AT&T arguments that I reluctantly agreed with is the argument in favor of a temporary, transitional recovery mechanism for lost ICC revenue—a la the Rural Associations' "RM." AT&T attacks opposition to ARM by Sprint, CTIA and XO, who claim that the ARM would "constitute an unjustified windfall for local exchange carriers" (pg. 36). AT&T insists that ARM is transitional and temporary and will be a great benefit for rural carriers who "derive half their revenue from access charge, and rapidly eliminating those revenues without providing an alternative source of recovery could threaten Universal Service" (pg. 37).

On AT&T's "Plan" for CAF: AT&T is definitely pushing for a Great Leap Forward for broadband, as they are pressuring the FCC and states to eliminate COLR because "the POTS business model is collapsing, and thus legacy obligations are an unsustainable means of ensuring ubiquitous access even to basic telecommunications service," and POTS should not continue to be "propped up" by the FCC (pg. 43-44). The main principle in the AT&T Plan is reverse auctions, or a "procurement model" where carriers are only subject to static service obligations if they agree to serve a high cost area in exchange for support. AT&T does not think the FCC should favor dynamic service obligations, as they would cause too much uncertainty. Furthermore, AT&T admits that there would be an incentive for over-bidding in reverse auctions if service obligations evolve over time (remember, the Joint Board warned about bidders adding risk premiums to drive up the bids in reverse auctions). AT&T argues, "The service obligations themselves would result in higher bids, because an economically rational broadband provider would assume evolving service obligations only if given an appropriate risk premium to offset the potential burdens" (pg. 50). Finally, AT&T insists that "compelling providers to offer broadband service without sufficient universal service support would constitute a physical taking, regulatory taking and confiscatory taking in violation of the Fifth Amendment" (pg. 54).

On Dumping High-Cost Broadband Deployment Responsibilities on Satellite Providers: AT&T supports "partnering" with satellite providers to serve the ultra-high-cost areas, and by "partnering" I mean dumping the responsibility of providing broadband in areas where AT&T has no business case to invest. AT&T points to comments by the California PUC which claim that providing satellite to the 250,000 most high cost households will reduce the $24 B broadband investment gap by $14 B, and "it would be a tremendous waste of resources to incur these costs for deployment of either fixed or mobile terrestrial broadband service, when satellite offers a viable alternative at a fraction of the cost" (pg. 56). Why-you may ask-does AT&T hold such an interest in ensuring that satellite providers get a slice of the CAF pie? Because AT&T wants to get its hands on some of that money itself by "partnering" with the satellite providers, even though AT&T would not technically do anything to ensure these ultra-high-cost households get access to broadband.

My Thoughts: Some of AT&T's comments shook me to the core, but some were surprisingly reasonable, particularly the ARM revenue recovery mechanism. What scares me the most is AT&T's push to eradicate the PSTN before consumers have sent clear signals that legacy telephone networks are no longer useful. There are still millions of people who rely solely on landline telephones to communicate with the outside world, and the FCC cannot implement a Great Leap Forward to broadband without considering the harm that these consumers—even if they are a minority—will face as a result. Until Congress passes a law that all Americans are not entitled to telephone service, the legacy telephone system needs to be at the very least maintained with limited federal support. I was particularly horrified by AT&T's "partnership with satellite" scam. I don't have a problem per se with satellite providers receiving limited support for the extremely rural consumers who literally have no chance at being served with fixed or wireless broadband. I do have a problem with AT&T or Verizon receiving this money under the guise of a satellite broadband "partner." If a price cap carrier receives USF though whatever means the FCC implements for distributuion, it is solely up to that carrier to provide broadband to high-cost households; otherwise they have no business going after the money in the first place. Finally, I am opposed to AT&T's argument that the FCC should skip the phased transition to CAF and go straight to the final rules, because this could have devastating effects if the final rules are wrong for the industry. Although AT&T correctly acknowledges that rural carriers are particularly in distress due to the current regulatory uncertainty, rural carriers could be even more distressed from hasty regulatory decisions implemented without reasonable trial periods and ongoing rulemakings to correct misguided or ineffective rules.

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My next installment will be an analysis of the Rural Associations' reply comments (NTCA, NECA OPASTCO, etc.), which will probably be my final comment summary post on USF. I may cover some other random comments just for fun, if I have time.

To read my entire USF Reform Proceeding analysis:

• ICC Reform Comments
  
• FCC 1^st Workshop on ICC Reform
  
• USF Reform Comments: Rural Carriers/Associations/Advocates
  
• USF Reform Comments: Price Cap Carriers
  
• FCC 2^nd Workshop on USF
  
• USF Reform Comments: Joint Board
  
• USF Reform Comments: Rural Associations
  
• FCC 3^rd Workshop on USF
  
• USF Reply Comments: Rural Carriers
  
• USF Reply Comments: Rural Associations/Advocates
  

Cassandra Heyne

ruraltelecommentary@gmail.com

An Exciting New Venture for Rural TeleCommentary at JSI Capital Advisors Blog

I am thrilled to announce that I will be joining the JSI Capital Advisors Blog team to write about USF and telecom regulatory issues! I am very excited about this new opportunity! There will be no shortage of USF Reform drama, controversy and excitement in the following months, and I am proud to be representing the rural telecom industry in yet another forum.

A LinkedIn Success Story

A few weeks ago when the LinkedIn IPO swept Wall Street and the tech industry by storm, I was a little skeptical and initially thought "oh great, another tech bubble." I've been a LinkedIn member for over 3 years and had only managed to accumulate a total of 4 connections—two of which were my father. I was actually required to join LinkedIn for a Technology Entrepreneurship Leadership and Management class a few years ago, where the professor hoped the students would utilize it to increase professional contacts. Anyway, I was never really able to figure out how to use LinkedIn to my advantage, largely due to the fact that I did not have direct contact with many of the people in the telecom industry that I wanted to "connect with" on LinkedIn, and I wasn't entirely sure if it was good business etiquette to just randomly send connection requests to strangers. After the IPO madness, I decided to give LinkedIn another shot. Thanks to the creepy yet powerful Google Gmail sync option, everyone I have ever e-mailed from ruraltelecommentary@gmail.com (who is also a LinkedIn member) was almost instantly added as a potential connection, which I thought was really cool. Google privacy invasion issues aside, this was definitely one time I was happy that the Google elephant never forgets.

As many of you may know, I've been on a path of aggressive self-promotion for Rural TeleCommentary over the last few months. I'm very pleased with the success I've had with Twitter so far, and I figured I should at least try to take advantage of LinkedIn to reach a wider audience of readers for Rural TeleCommentary. So, I updated my profile, downloaded the mobile app, and got to work on building my connections and joining groups. One of the groups that immediately caught my eye was the USF Forum, managed by Bill King of JSI Capital Advisors. This forum contains discussions on many of the topics I have been addressing on Rural TeleCommentary, so I jumped at the chance to contribute to the forum. Since then, I have managed to boost my LinkedIn connections from 4 to almost 70 in less than two weeks (including some very high-profile names), and I've definitely had success in bringing new readers to Rural TeleCommentary.

In addition to gaining new readers for Rural TeleCommentary and the wonderful opportunity to write for JSI, I also caught the attention of the FCC, and I have been invited to meet informally with someone from the Pricing Policy Division of the Wireline Competition Bureau tomorrow on Monday! I cannot tell you how exciting this is for me! I hope the FCC member will be open to letting me write about our meeting on Rural TeleCommentary. I am definitely going to ask a lot of questions and do my best to communicate RLEC concerns about USF reform.

So the moral of this story is: LinkedIn definitely proved that its inflated stock value may be appropriate because it certainly brought me some amazing opportunities in just 2 weeks of aggressive use! I will not underestimate the power of social media anymore—you may remember that I had reservations about using Twitter at first too, but now I love it and use it as a primary source for daily telecom news and views because I can get articles and reports from a very wide spectrum of the industry in one spot without having to individually check dozens of websites each day. I have definitely learned that if you want to increase your visibility for your career or personal projects, you really have to just GO FOR IT with social networking. I "went for it," and I am extremely pleased with the results so far!

Look for my first article on the JSI Capital Advisors Blog ("The Monitor") sometime next week! I will be writing approximately 2-3 articles per week for JSI and hopefully keep up my goal of 2 articles per week on Rural TeleCommentary as well. Additionally, I will be initiating and participating in thought-provoking discussions and debates on the LinkedIn USF Forum, so please join that group if you have not done so yet! I look forward to "seeing" you there! I am hoping that my involvement with JSI and the USF Forum will provide me with insightful information for my Master's Thesis, which is finally starting to accelerate a little. My advisor at CU is pushing me to look at the USF Reform question from a perspective where I may not be happy with my conclusions—for example, the conclusion that RLECs should consolidate in order to remain viable competitors to large carriers. It is sure to be a challenging project, this is for sure!

It has definitely been a great week!

Cassandra Heyne

ruraltelecommentary@gmail.com