It has been a hectic year thus far for John Rose, president of the Organization for the Promotion and Advancement of Small Telecommunications Companies, as a number of issues impacting independent telcos continue to reverberate through Washington, D.C. On the eve of OPASTCO's 43rd Annual Summer Convention, July 15-19, Rose spoke with Telephony Editor-at-large Carol Wilson on the regulatory outlook to date.

On telecom reform: Yes, there have been a number of issues we've had to follow in both the House and Senate: the [Stevens] bill, the Burns bill in the House. We worked on the core bill with [Rep. Joe] Barton (R-Texas) — well, we didn't work with him, he's not exactly our friend. But we have been working with the Terry/Boucher [Rep. Lee Terry (R-Neb.), and Rep. Rick Boucher, (D-Va.)] bill on USF reform. And we've worked with the other rural associations through the Coalition to Keep America Connected. The question is whether the Senate bill [sponsored by Sen. Ted Stevens] will get floor time, whether they will have enough time to get things done. I'd say there's a 50-50 chance.

On the best reform outcome for OPASTCO members: There is no Universal Service section in Barton's bill. It pretty much concentrates on the cable TV franchise for the Bell companies. Most of our people already have worked through the franchise issues. The Barton bill wouldn't hurt us.

We think in the Stevens bill, it is good that they broaden the base of [USF] contributions, [but] there ought to be higher standards as to who receives it and what it is used for. In some of the House bills they talked about expanding it to broadband. We think that's a good thing.

In the Senate bill there is a joint proposal that we have some sort of cap on the Universal Service fund. We worry that people might try to re-introduce that cap. The reason the cap is such a big issue is that we are working with the Rural Alliance on access reform before the FCC. In that process we take rates down quite a bit. There is a thing called the restructure mechanism in the USF that allows rural companies to make up for some of the decrease in rates. It's being debated whether that is a form of access or a form of Universal Service. If we get a cap and then they label that Universal Service, we would end up with a big decrease in revenue.

Some of the previous bills in the Senate have a build-out requirement that says you have to get broadband out to all of your customers within a certain time frame. Right now, our members make broadband available to 80% to 85% of their customers. Reaching that remaining 15% to 20% is very expensive. If a bill says you have to build out to that last group with speeds up to 1.5 [megabits per second] and, by the way, we are capping USF, that puts us between a rock and a hard place.

On independents' access to the latest technology: It is always a problem when you don't have a large chunk of the market. Naturally companies engineer their products to 95% of the market. Hopefully we can piggyback on that, but sometimes that doesn't happen. For instance, our members pay 20% to 30% more for video content than the cable [multiple systems operators]. That makes it hard to create a triple-play bundle and make a profit or compete. In the CLEC world, they've done pretty well going head-to-head with the big companies. But we need a level playing field.

On Net Neutrality: I see it as a debate of the large RBOCs against the large content providers [like] Google and eBay. On the other hand, our guys sit at the edge of the network. We don't have the Internet backbone. In that way, we are just like the content providers, we also need access at fair and reasonable prices. So it kind of cuts both ways to us.

I don't think the argument has been thought out that well yet. Some of the stuff in network neutrality limits the bundles and packages we can provide. I think policy-makers need to take the time to understand what it really means.