With over 650 telecommunications’ operators behind last week’s letter that was sent to the FCC and their elected representatives, the rural telecom industry is as united as it ever has been. In the words of the letter,
“This letter is…clear and unambiguous notice of our collective concerns with the ‘regression analysis’ based caps on Universal Service Fund (USF) support that were adopted in the FCC’s November 2011 ‘Transformation’ Order and finalized in an order the Wireline Competition Bureau released in April 2012,”
In a nutshell, a central point of their argument reflects what economists call, The Permanent Income Theory of Consumption. That is, people or corporations consume or invest based on what they believe their future income streams will be. When the future is cloudy and income streams less clear, investors will tend to make fewer investments that require a long-term horizon.
In our travels this past year, we have heard anecdotes from the many rural operators that they have indeed cut back on capital expenditures due to the uncertainty and concern about how the rules could change in the future, so this letter isn’t too surprising.
“Moreover, this unpredictability, together with a concern that the ‘rules of the game’ can change so easily midstream, also will hinder our ability to access capital on reasonable terms.”
Whether the words in this letter and the continuing push by the rural associations and its member will affect legislative and regulatory change, particularly in an election year, remains to be seen.
Leave a Reply