Expanding the scope of the universal service fund (USF) to broadb...

assessing levels of support and dissent among industry players and political constituencies. The report cited 2 main public policy issues: (1) Devising the best regulatory framework for encouraging investment and innovation in the broadband network and applications riding over the network. (2) Deciding whether the govt. should intervene in rural markets by expanding universal service to include access to broadband networks at affordable rates. Despite widespread consensus that today’s statutory and regulatory framework for telecom is ill-suited for the market, there’s disagreement about how to fix it, the report said. A key barrier -- an “administrative and legal morass,” in the authors’ words -- is deciding if an information service is purely an information service or has a telecom component invoking more rigorous regulation. The recent Supreme Court Brand X decision and an Aug. 5 FCC order helped clarify classification of information services, but the Commission has yet to address how to classify and regulate specific service offerings based on the underlying network architecture, the report said. For example, the FCC’s re-classification of DSL service as an information service rather than a telecom service had 2 effects on universal service: It reduced the funding base and limited funding to telecom services. Two other challenges to Congress in tackling a telecom law update: (1) Creating a regulatory framework that market changes won’t render obsolete. (2) Identifying regulatory elements suitable for handling at the state and local level versus those that should be centralized, the report said. It’s also timely for Congress to consider reviewing Title VI regulations to see if it would be in the public interest to streamline franchising by consolidating it at the state or federal level and lessen or eliminate some regulations, the report said. To enhance broadband competition, the report said, intramodal competition will continue to be important, especially for large business markets. It suggests maintaining some current statutory provisions for CLECs to foster that competition, “given the inability of facilities-based CLECs to attain the economics of scale needed to support ubiquitous networks. On the issue of intercarrier compensation (ICC) reform, where there again is widespread agreement on problems but dispute over solutions, the report advises Congress to “use its deliberations” to give the FCC statutory guidance. As for USF reform, congressional action clearly is needed for change, particularly in regard to assessments on providers and recipients of funds. With VoIP service emerging, Congress should consider reviewing Title II requirements on voice services. The FCC is “constrained by current statute” in its ability to provide regulatory parity to competing voice services, the report said, because some services meet the definition of telecom, some are information and some are “ambiguous.” Finally, on DTV transition, the report said Congress should leave multicasting to the FCC to “study and construct recommendations for rules (and, if necessary, statutory changes) to address the potentially related issues of mandatory carriage of multiple broadcast signals and better serving the needs and interest of viewers in different governmental jurisdictions.” This is likely to give momentum to political forces seeking to address the multicasting issue as a “study item” in DTV legislation. - - AV