"USF Fund Growth - Problems and Solutions"
National Challenges in Universal Service: What do they mean for States? Bob Rowe 35th Annual PURC Conference February 2008 Agenda Network and business issues Summary of Joint Board and FCC actions Florida and USF Sources of Fund growth Carrier of Last Resort Broadband Policy framework Slide 2 Network and business issues High quality infrastructure to support community and economic development Enhanced services similar to those in urban markets High speed capability to meet competitive demands of small and medium sized businesses Mobility “Value added” company participation in the community “What do rural “Evolving” needs and expectations customers want?” Slide 4 Network evolution Network evolution Backbone and last mile Intelligence In the core? At the edge? With the user? All of the above? For broadband, it’s still mainly a wired world Wires getting shorter Wireless broadband complementary and dependent on wires Rural demand catching up with urban Video “killer app” accelerates demand Rural markets have fewer “high value” large commercial customers Costs diverse Rural still much more costly overall Costs within wire centers highly variable from core to perimeter True for POTS and PANS alike Transport to backbone costly Slide 5 Network costs Networks and costs don’t go away – they change Increased costs to rebuild network, especially outside plant Some decreased costs, especially switching and more efficient network use Increased revenue from selling new services Decreased revenue from traditional services Building the broadband network enables disruption of traditional retail, access and wholesale revenues Increased demand for new services will stress existing infrastructure and require further investment Slide 6 What’s the revenue model? Need new revenue model New network plus targeted competition disrupts traditional model Competition for customers in low-cost core Competition for traditional revenues (vertical services, measured minutes) Competition for high value customers Competition for new service/application revenues Loss of traditional access revenues Growth in special access revenues New customer-generated revenues? Need clarity/predictability about policy-related revenues High cost fund Access and access replacement How far out will the business model support deployment? Business case for rural broadband currently challenging Slide 7 Summary of Joint Board and FCC actions What is USF? Historic focus on support for networks serving customers in high-cost areas, ensuring availability & affordability of basic service – High Cost Fund (HCF) Telecom Act of 1996 expanded policy goals of Universal Service Fund Schools and Libraries Low Income Rural Telemedicine Possibility of multiple support recipients (Sec. 214(e)(2)) – competition States “may” certify more than one carrier in areas served by RLECs and “shall” certify more than one in other areas (Bell-served) Must be “consistent with the public interest” Subsequent FCC action placed additional pressure on the fund Replaced intercarrier access with explicit universal service elements Expanded CETC eligibility with unanticipated and unintended results High Cost Fund component includes: Support to Rural Carriers through High Cost Loop Fund, Local Switching Support, Interstate Common Line Support (access replacement), & several small specialized funding mechanisms Non-rural support (High Cost Model & Interstate Access Support paid to Bell companies) Support to competitive carriers (CETCs) All fund elements including access replacement for carriers that did not previously receive access Slide 9 Pending FCC actions 3 NPRMs Joint Board Recommended Decision CETC rules Reverse auctions Released January 29, 2008 Initial comments due 30 days from publication in Federal Register Reply comments due 60 days from publication June 2007 Joint Board recommendation for interim cap on CETC support still pending Slide 10 Joint Board Recommendation November 20 2007 Released by FCC for comment Three funds “Provider of last resort” – core of current program Mobility, and Broadband. The POLR fund would essentially be the core of the current high cost program, but with a sharpened focus. The mobility and broadband funds, if created by the FCC, would be smaller, targeted programs to address these specific services. Target the broadband and mobility funds at unserved areas, but with some support available to upgrade substandard broadband or provide ongoing support for otherwise uneconomic mobile or broadband services. Cap the overall fund at $4.5 billion (roughly the current level), the broadband fund at $300 million, and the mobility fund at about $1 billion, leaving slightly over $3 billion. Achieve savings to pay for the new initiatives through eliminating “identical support” for CETCs, and limiting the number of supported carriers in any area to one POLR, one mobile carrier and one broadband provider. Provide a transition period of up to five years. Further study issues including the role of states, identification of unserved areas, the definition of broadband and the possible use of auctions to award support, most likely for the broadband and mobility programs. POLR recommendations The Commission should focus on developing a unified POLR mechanism, rather than separate mechanisms dependent on the nature of the carrier. As part of this, the FCC should address the transfer of exchange or “parent trap” rules. The current mechanism recognizes loop costs, and to an extent switching costs, but not transport costs, which can be significant. The mechanism may need to be modernized to account for factors such as targeted competition, competitive line losses, non-regulated revenues, and reduced support under the ILEC cap, despite costs that have remained relatively constant. Slide 11 FCC CETC NPRM Tenative conclusions CETC support based on their own costs. Include spectrum costs to the extent they actually paid for. Not include handset costs. Use GAAP and a cost of capital of 11.25%. CETCs should not receive Interstate Access Support, Interstate Common Line Support, or Local Switching Support (LSS) Asks whether CETC support should be capped at the support received by the relevant ILEC from the High-Cost Loop Support (HCLS) or at the combined HCLS and LSS. Requests for comment Should forward-looking costs should be used, rather than embedded? Should per-line CETC support be based on actual lines or on projections of expected subscribers at some future time, especially when a CETC first enters a market and has few subscribers? How should ETCs report their costs. Should costs be geographically disaggregated to match the geographic study areas of the ILEC, where a CETC covers several such areas? How to assure CETCs use their USF support to promote USF goals? Slide 12 FCC Reverse Auction NPRM Tentative conclusions and questions Reverse auctions have advantages over the current system and that the FCC should develop an auction mechanism to determine high-cost USF support Those designated as ETCs or CETCs in the relevant geographic area should be allowed to bid Single winner for each geographic area Merit of holding separate auctions for wireline and wireless ETCs? How to distribute auction support? Fixed amount for the geographic area or number of customers or households? Obligations of USF recipients.? Carrier-of-last-resort (COLR) obligations and the obligations adopted in its FCC’s 2005 ETC Designation Order (e.g. financial and consumer safeguards). How to set reserve prices (maximum amount that can be bid)? Auction design, including simultaneous multiple round (SMR) method and package bidding, as opposed to single round sealed bids. Frequency of auctions? Asset transfers from current providers to new winners? Use of auction pilot program? Tentatively concludes that in a pilot, the reserve price should be based on the current level of support in the area. Commissioners Copps and Adelstein dissent in part Slide 13 Florida and USF Florida Universal Service Receipts 2006 1998-2006 High Cost Fund 81,607,000 600,449,000 Low Income 17,752,000 133,840,000 Rural Health Care 49,000 1,272,000 Schools and 62,617,000 574,038,000 Libraries Total 152,422,000 1,103,282,000 Source: USAC 2006 Annual Report Slide 15 2006 Florida High Cost Fund distributions 2006 Rural 42,245,000 Non-rural 39,361,000 ILEC 72,188,000 CETC 9,419,000 Source: USAC 2006 Annual Report Slide 16 Sources of Fund growth and decline Total USF is growing $mils. Federal Universal Service Fund Elements Policy/political 8,000 problem with USF 7,000 Rural Health Care generally identified 26 46 as persistent 6,000 1,924 Schools & Libraries 1,862 “growth” 5,000 21 24 24 1,393 Growth tied to 11 1,701 1,455 803 Low Income 8 804 other questions 4,000 1,692 1,524 716 763 1,083 CETCs 639 Should multiple 1 676 333 3,000 1,338 589 carriers receive 519 47 131 High 20 funding? 2,000 464 480 ILECs Cost Fund What is the basis 2,622 2,942 3,154 3,122 3,186 3,096 2,233 for funding? 1,000 1,697 1,730 Contribution problems—who 1998 1999 2000 2001 2002 2003 2004 2005 2006 should contribute Source: USAC FCC filings: Balhoff & Rowe, LLC. and on what basis? To understand and address the “growth problem” one must correctly identify sources of growth, and craft solutions that address those specific sources One-time program changes, such as creation of Schools & Libraries (1999) Shift from intercarrier access payments to explicit support mechanisms (2000-2002) Emphasis on support for wireless Competitive Eligible Telecommunications Carriers (CETCs) (ongoing) Slide 18 What is Driving Recent Fund Growth? Total Universal Service Fund Growth since 2003 $ change 2006 v. 2003 High-cost fund (HCF)—ILECs • Virtually unchanged payouts since 2003—no growth once -1.8% -$58 million access reforms completed HCF—“competitive” carriers • More than $1 billion in funding in 2006 from ~$131 million in 724% $952 million 2003—primary source of organic growth Low-income program • Up mainly due to offsets of higher SLCs in post-2000 reforms 12.3% $87 million Rural Health Care • Program size is small at $46 million in 2006 96.0% $22 million • Negligible absolute dollar growth Schools and Libraries • Capped at $2.25 billion—program has not paid out total cap 32.2% $469 million • Growth is simply because of lower previous payouts USF payments in 2006 approximately $1.47 billion greater than in 2003 Growth in payouts (post-access reforms) has been driven by … $469 million increase in the Schools & Libraries program, accounting for approximately 32% of the increase (total 2006 payments still below cap) $952 million increase in payments to CETCs, accounting for approximately 65% of the total increase in funding – growth to continue absent reform Slide 19 Composition of CETC funding growth CETC Annual Funding by Fund Element Funds to CETCs exploding 96% CAGR 2002-2006 $900 $800 Approximately 61% growth 96% compound 2005-2006 $700 annual growth rate Access replacement is 2002-2006 approximately 46% of CETC $600 (238% CAGR 2001- total receipts in 2006 2002) (composed of Interstate Common Line Support, $millions $500 Interstate Access Support &, $400 pre-2005, Long-term Support) Wireless CETCs did not receive $300 access payments prior to reforms $200 Access replacement $100 Other Local switching support $ High cost model 2001 2002 2003 2004 2005 2006 High Cost Loop Source: Universal Service Administrative Company Quarterly appendices HC01 (only eligible and ETC-approved funding); Balhoff & Rowe, LLC. Slide 20 CETC and ILEC Support CETC federal USF funding continues Annual Growth to expand rapidly in Federal CETC Funding Total CETC funding grew by 97.6% from v. Rural ILEC Funding 2004 to 2005 to $639 million, and then by 53.5% to $980 million by 2006 Rural CETC funding grew 100.1% from 2004 to 2005 to $316 million, and then by 66.5% in 2006 to $526 million Rural ILEC funding is under pressure, as growth in 2005 was 0.6% and then -3.1% in 2006 Source: USAC Annual Reports and HC05-HC09 appendices. Prepared by Balhoff, Rowe & Williams, LLC Slide 21 CETC Rural Funding CETC funding in rural regions is Rural CETC Funding 2004 2005 2006 growing faster than the total High cost loop $69,229,913 $140,463,552 $239,473,650 Safety net $1,342,213 $2,398,431 $4,274,388 CETC funding Safety valve $745,008 Local switching sup $35,714,571 $56,420,758 $84,101,214 No strict obligations exist to ICLS* $51,470,285 $157,756,982 $116,315,502 $315,598,243 $196,925,121 $525,519,381 use the funding for investment Growth in Rural CETC Funding No reporting requirements exist High cost loop 2005 102.9% 2006 70.5% Safety net 78.7% 78.2% Interstate Common Line Safety valve NM Support, which is based in part Local switching support 58.0% 49.1% ICLS* 126.0% 69.3% on access replacement, is now 100.1% 66.5% nearly 40% of the total in spite Percent of Total Rural CETC Funding 2004 2005 2006 of the fact that no access High cost loop 43.9% 44.5% 45.6% Safety net 0.9% 0.8% 0.8% revenues were withdrawn from Safety valve Local switching sup 0.0% 22.6% 0.0% 17.9% 0.1% 16.0% wireless companies ICLS* 32.6% 100.0% 36.9% 100.0% 37.5% 100.0% *2004 ICLS includes LTS Source: USAC HC05-HC09 appendices; prepared by Balhoff, Rowe & Williams, LLC Slide 22 USF Contraction for Large RLECs Annual “Growth” In Large Rural Company Federal USF Funding Largest carriers are reporting significant contraction in federal USF receipts Among explanations . . . Increased efficiencies at companies with publicly-traded stock Unanticipated effects of Rural Growth Factor as investment continues but the number of access lines contract Summary Slide 23 Carrier of Last Resort Stages, Policy and Financial Perspectives on universal service goals From Universal Service Funding, Balhoff, Rowe & Williams, LLC (2007) Slide 25 Traditional (Monopoly) Model of Support Policymakers regulate carriers to ensure policy- based (as opposed to market-driven) ubiquitous/affordable services in exchange for Urban Vertical economic viability of entire enterprise Historically, residential and high-cost rural Long consumers benefited from a system of Business Distance enterprise-based internal cross-subsidies Support included in access and long distance Geographic rate averaging Local Value-of-service pricing Residential Residual pricing of value added/”vertical” services Rural Basic Rate differentials unrelated to cost differences System began to fail when certain sources (lines of business) of internal cross-subsidies became Consolidated monopoly telecom competitive Lines of business LD from approximately 1970 Business in the 1990s/2000s Residential with VoIP in 2000s Slide 26 Rural Financial Problem From BR&W Texas Study Competitive line losses are concentrated in townships, not outside Companies/BR&W note findings are consistent with data in other states BR&WR Texas study focused on cost patterns and competitive activity Methodology involving financial data study based on . . . “Supported services” only (revenues, costs, investment) Actual revenues received for provision of these services Forward-looking costs (12 kft loops – no costs for broadband-capable plant) Data set Over 100 Texas wire centers Approximately 375,000 lines Approximately $250 million in revenue (including USF receipts) ~$850 million in gross loop investment (~$450 million net R1/B1 investment) Analyzed financial characteristics/performance of wire centers in data set Segmented into ROI groups (negative, 0%-10%, >10%) Sub-wire center analyses of financial performance Using geo-coded information, studied the geographic coverage of the cable operators (only in towns) & characteristics of service areas NOTE: “Supported services” revenue streams included in analysis consist of Basic Area Local Revenue, End User Common Line (excluding USF surcharges), Carrier Common Line, Switched Access (including CALLS support), IntraLATA Toll, and High Cost USF where indicated. Costs and investment reflect what is required to provide R1/B1 services (including Loop, Transport & Switching), with returns calculated based on net investment (after accumulated depreciation). Slide 27 Town Center vs. Outside of Town Typical Wire Center Fundamental goal – better Service Area understand challenges in serving rural customers based on sub-wire center financial & competitive “Town Center” factors Served directly Studied “Town Center” regions, by Central Office close enough to the CO (less than (CO) switch 12,000 feet) to be served directly, versus “Outside of Town” areas “Outside of Town” CO typically placed in population Distance from CO too centers great to be served directly Higher density, lower cost areas (more sparsely populated and longer loops) Sub-wire center data are key to understanding . . . Central Office Switch Economics of serving differing geographic regions (in terms of density, costs, investment, etc.) Why and where wireline competition is occurring, and where it is not Role of explicit support mechanisms Remote switches Future pressures on mechanisms Slide 28 Without USF, Rural Service At Risk Excluding USF receipts, ROI for 20% all wire centers studied would 15.1% be negative (excluding non- 15% supported services) Assumed cost of capital 10% Wire centers generating returns below assumed 5% 2.9% 10% cost of capital represent a large percentage of WCs, lines 0% and investment -5% 13% of WCs generating 0%-10% ROI -1.5 ROI for all WCs Uneconomic Outside-of-Town 10% of WCs generating 10%+ ROI regions are unlikely to attract -10% -9.7% incremental investment from 77% of WCs generating rational competitors -15% negative ROI Source: Sampled Texas companies; Balhoff & Rowe, LLC. Quality/availability of service for customers put at risk without sufficient support Slide 29 Financial Drivers Highlight Risks ROI driven by high-density & low- capital intensity in Town Centers Town Center regions vs. Outside of Town areas 4x the line density “Town Center” Approx. 50% the per-line investment $769 avg. invest./line Lower maintenance & operating costs 4x OoT density Systemic vulnerability to targeted 10% ROI competitive entry will put policy goals at risk “Outside of Town” Competitors target concentrated $1,581 avg. invest./line profits/returns 2.1x Town Center per line investment Economically unattractive outlying areas make ongoing capital allocation -7% ROI problematic Quality, affordable service less available – consumers lose Slide 30 Embarq Florida example Kingsley Lake Per Line Monthly Cost: $266.94 Reynolds Hill Kenansville Per Line Monthly Per Line Monthly Cost: Cost: $97.34 $143.72 St. Marks Per Line Monthly Cost: $110.97 Statewide Average Everglades Per Line Monthly Cost: Per Line Monthly < $23.00 Cost: $120.80 Slide 31 Embarq Florida example Forward looking cost based on Hybrid Cost Proxy Model 1.77M lines in Florida Average Florida R1 rate is about $15 Price cap regulated Embarq receives no high cost loop or local switching support in Florida. Embarq does receive about $17M a year in CALLS money (access replacement). Slide 32 Broadband “The YouTube effect” HTTP replaces P2P 45% is web pull down 36% is streaming 20% is YouTube YouTube = entire Internet in 2000 65,000 uploads a day Most traffic non- critical Some critical (medical or other records) Source: Ellacoya Networks, reported at arstechnica.com (6-19-07) Some sensitive Exabyte =1.074 gigabytes (voice) Traffic now 1 exabyte per hour Average residential user downloaded 2 Network investment and innovation required gigabytes a mo in 06 VDSL2 capable of 50-100 Mb/s (BellSouth estimate) Compression continues to improve Slide 34 Framework for Policy Reform Competitive Paradigm Shift Explicit support mechanisms intended to eliminate internal cross-subsidies Access systems Urban Federal/state USF programs Access reforms Long Distance Business Competition targets most profitable business lines, eroding profitability & Explicit Support making cross-subsidies unsustainable (USF) LD market example Local Residential All lines of business must be Rural (incl. economically justifiable (COLR) business) Allow competition to govern competitive markets Uneconomic regions receive Balhoff, Rowe & Williams, USF Funding: increasingly explicit support Realities of Serving Telecom Customers in High Cost Regions (2007) Policy support matches policy duties Slide 36 Reforms must be achievable Policy goals should be clearly stated Focus on solutions that are … Based on accurate analysis & proper issue definition Adoptable (i.e. politically feasible) Achievable Reasonably likely to result in desired goals Minimize risk of bad outcomes Sustainable – remain effective as conditions change Consistent with the point at which reforms are commencing Policy path dependency – “it’s costly & dangerous to switch from driving on the left side to driving on the right side” Incorporate feedback mechanisms to adjust & improve based on time & experience See, Barbara Cherry, “The Telecommunications Economy and Regulation as Coevolving Complex Adaptive Systems: Implications for Federalism” (delivered to TRP); Barbara Cherry and Johannes Bauer, “Adaptive Regulation: Contours of a Policy Model for the Internet Economy” (September 2004), presented at the International Telecommunications Society 15th Biennial Conference, Berlin Germany. Slide 37 Framework for achievable reforms Clear Goals Rigorous Problem Feedback – Analysis adjust & improve Candidate Solution Set Adoptability Achievability Sustainability Continuity Adopted Solution Set Implementation Slide 38 HCF goals Network focus Clear Goals Support investment to better serve customers Rigorous Customer focus Problem Benefit from service Feedback – Analysis adjust & availability & affordability improve Candidate Comparable services Solution Set Limit exposure to harm from high risk “solutions” Adoptability Achievability Sustainability Continuity Carrier of last resort Support service uneconomic to provide but required by Adopted policy goals Solution Set Broadband platform “No barriers to deployment” Implementation of advanced services (Rural Task Force) Slide 39 HCF problem analysis Growing HCF distributions Historic growth in ILEC Clear Goals component based on “one- time” shift from implicit support Rigorous in access to explicit in USF Problem Feedback – Analysis Negative growth in ILEC adjust & funding in recent years improve Candidate Solution Set Dynamic growth in payments to wireless CETCs Unclear purposes Adoptability Achievability Sustainability Continuity “Identical revenues” basis Uncapped Adopted Funding multiple “competitors” Solution Set Poor accountability Match support with cost of Implementation providing policy-based supported services Slide 40 CETC candidate solutions Near-term actionable items Clarify the goals & purposes Clear Goals for CETC support Risks in delaying decisions or deferring to states Rigorous Problem Additional steps to ensure Feedback – Analysis program discipline, adjust & accountability and customer improve Candidate value in the CETC program Solution Set Similar to requirments already present in the rural rate of return program Adoptability Achievability Sustainability Continuity Meaningful CETC certifications & regular review Support for CETCs should be Adopted based on their own verifiable Solution Set costs & network characteristics Implementation Do not defer urgently needed actionable reforms while longer-term solutions are being developed Slide 41 CETC candidate solutions (cont.) Longer-term solutions to evaluate Clear Goals Separate wireless program (like other programs, funded by customer Rigorous contributions to a single Problem Feedback – Analysis USF), to meet wireless- adjust & specific goals, such as: improve Candidate Mobility? Solution Set Reliability? Ubiquity? Capacity? Adoptability Achievability Sustainability Continuity Designation of one wireless CETC to receive funding per study area in exchange for Adopted higher levels of investment Solution Set & service Non-wireless CETCs would Implementation still participate in ILEC program Slide 42 Focus on investment & consumers RLEC support not a cause of growth Clear Goals Any future access replacement payments not USF (not high-cost support) Ensure support follows investment & costs Rigorous Modify rural growth factor so not negative Problem Encourage greater targeting of support to Feedback – Analysis match COLR obligations adjust & Facilitate investment in acquired rural improve properties Candidate Solution Set Acquired properties often require relief from “parent trap” which limits them to support received by the seller (RBOC) Purchasers of rural price cap properties should be allowed to propose company- Adoptability Achievability Sustainability Continuity specific approaches consistent with their circumstances Adopted Solution Set Implementation Slide 43 About BR&W Principals Michael J. Balhoff, CFA, Managing Partner Michael J. Balhoff, CFA, is managing partner at Balhoff, Rowe & Williams. Previously, Mr. Balhoff headed for 16 years the Telecommunications Equity Research Group at Legg Mason, which advised investors about equities in media, cable, wireless, telephony, communications equipment and regulation. Prior to joining Legg Mason in 1989, Mr. Balhoff taught at both the graduate and undergraduate levels. He has a doctorate in Canon Law and four master’s degrees, including an M.B.A., concentration in finance, from the University of Maryland. A Chartered Financial Analyst and a member of the Baltimore Security Analysts Society, Mr. Balhoff has been named on six occasions as a Wall Street Journal All-Star Analyst for his telecommunications recommendations. His coverage of telecom was named by Institutional Investor as the top telecommunications boutique in the country in 2003. He has also testified multiple times before congressional committees, is regularly a featured speaker at conferences for investors and policymakers, and is widely quoted in the media, including television, newspapers as well as communications and business journals. Robert C. Rowe, Esq., Senior Partner Robert C. Rowe, Esq., is a senior partner at Balhoff, Rowe & Williams. Previously, Mr. Rowe served as the Chairman of the Montana Public Service Commission which was responsible for regulating telecommunications, electricity, natural gas, water, and some transportation services. Mr. Rowe also served as President of the National Association of Regulatory Utility Commissioners, Chairman of the NARUC Telecommunications Committee, member and state chair of the Federal-State Joint Board on Universal Service, member of the Federal-State Joint Conference on Advanced Services, chairman of the thirteen state Operations Support Systems Collaborative working with Qwest and its competitors to achieve compliance with Section 271 of the 1996 Federal Telecommunications Act, and member of various advisory boards for university-affiliated programs. Bradley P. Williams, Esq., Partner Bradley P. Williams joined the firm in 2005 and became a partner at Balhoff, Rowe & Williams in October, 2007. Previously, Mr. Williams was a member of the Strategic Planning & Business Development group at Lowe’s Companies Inc., the Fortune 50 home improvement retailer. Prior to joining Lowe’s, Mr. Williams worked with Mr. Balhoff in the award-winning Telecommunications Equity Research Group at Legg Mason, focusing on incumbent and rural local exchange carriers. Prior to joining Legg Mason, Mr. Williams was a co-founder of eSprocket / Beachfire, a venture-backed company that evolved into one of the pioneers in mediation technology solutions for the financial services sector. Previously, he served as a financial executive for Iron Road Railways Incorporated, a Washington, D.C.-based holding company that integrated, through acquisitions, a significant regional freight rail network serving northern New England and eastern Canada. Mr. Williams began his career as an investment banker in First Union’s Capital Markets Group. He has a BA in Economics from the University of North Carolina and a JD from the University of North Carolina School of Law. Slide 45 Clients and Services Representative assignments Financial advisory FairPoint and several other confidential discussions MTA strategic acquisition Facilitation and coordination of acquisition of NW Investment analysis of wireless and wireline telecom Advocacy/representation Congress (Phantom Traffic / USF for rural carriers Senate Finance Committee concerning USF) FCC (issues regarding access, USF, Phantom Traffic) State commissions (acquisitions, rural exemptions, predatory pricing, financial strength, USF, etc.) Consulting and analysis Strategic facilitation for CEOs/COOs of five carriers Study of divestitures of rural properties USF analysis for RBOCs; study of USF and access for rural telecom carriers Study of municipal broadband Slide 46