Adam Bender

The FCC will soon issue a further notice of proposed rulemaking on Universal Service Fund high-cost support for non-rural carriers like Qwest, said two agency officials. The commission committed to release a rulemaking notice by Dec. 15 and a final order by April 16, as it works toward responding to a 2005 remand by the 10th U.S. Circuit Court of Appeals (CD June 11 p7). In 2005, the court called unlawful the FCC’s current non-rural rules, which address carriers like Qwest that serve high-cost areas with too many lines to be considered “rural” by the statutory definition. FCC Chairman Julius Genachowski last week circulated the notice, which contains tentative conclusions, agency officials said. One described the tentative conclusions as very bare with “not a lot of new ideas,” and said the further rulemaking notice seems designed as a “punt.” Commission spokeswoman Jen Howard declined to comment. Meanwhile, industry meetings with the FCC on a comprehensive USF overhaul have been heating up (CD Nov 27 p5). The impetus seems to be the non-rural support item and an expectation among industry that the regulator will tee up reform in the National Broadband Plan due this February, agency officials said. Monday, Windstream phoned an aide to Genachowski about the agency’s rulemaking notice on the 10th Circuit remand, urging the FCC to seek input on how to better target federal universal service support directly to granular high-cost areas, an ex-parte filing said. Windstream said the FCC should stop distinguishing between rural and non-rural carriers, and kill eligibility requirements based on statewide average costs. President John Rose of the Organization for the Promotion & Advancement of Small Telecommunications Companies met separately Monday with aides to Commissioners Michael Copps, Robert McDowell and Meredith Baker, said an ex-parte filing. The meetings focused on USF and intercarrier compensation reform “in the context of” the plan, OPASTCO said.

Interest in aerial fiber backhaul is rising as wireless carriers look to reduce costs of upgrading networks for 3G and 4G broadband, but some fear stringing fiber from poles may leave cellphone networks more susceptible to outages. Aerial fiber is cheaper to install than buried plant but is more vulnerable to ice storms, hurricanes and other forces of nature, said industry officials. However, some said aerial fiber outages can be dealt with quickly if companies are prepared.

The FCC ordered a rural local-exchange carrier accused by Qwest of “traffic pumping” to pay the big carrier damages for violations of Sections 203(c) and 201(b) of the 1934 Communications Act. In a second reconsideration order in a dispute between Qwest and Farmers and Merchants Mutual Telephone, the commission said Wednesday new evidence from Qwest proved “unjust and unreasonable” Farmers’ charges to the big carrier for traffic generated by free conferencing providers that Farmers had business arrangements with. Farmers had a deal to pay the conferencing companies for sending traffic to numbers in its exchange.

The FCC is looking at ways to spur more research and development as it develops its National Broadband Plan, commission officials said at a workshop Monday. The effort may include outreach and more emphasis on rules on enabling research, they said. Industry executives warned that the U.S. is falling behind in doing basic research, and that this could hurt U.S. competitiveness.

The FCC is looking at ways to spur more research and development as it develops its National Broadband Plan, commission officials said at a workshop Monday. The effort may include outreach and more emphasis on rules on enabling research, they said. Industry executives warned that the U.S. is falling behind in doing basic research, and that this could hurt U.S. competitiveness.

The FCC said it’s tightening oversight of video relay services (VRS)after the Justice Department charged 26 people with stealing more than $50 million total from the video relay service program. After a joint investigation by the FBI, U.S. Postal Inspection Service and the FCC Office of Inspector General, FBI agents and postal inspectors made arrests Thursday in New York, New Jersey, Florida, Texas, Pennsylvania, Arizona, Nevada, Oregon and Maryland, Justice said. Meanwhile, VRS provider Purple Communications said it expects its Q3 revenue to dive $7.2 million from a year earlier unless the FCC loosens its compensation rules.

Fiber is the only broadband technology that is “not bound by demand,” Verizon Chief Technology Officer Dick Lynch said Thursday at an FCC workshop about fiber. Asked whether Verizon’s customer traffic will eventually rise to fill FiOS capacity, he said, “Yes … but it’s going to take time. It’s not going to happen overnight.” Verizon’s fastest FiOS service offers 50 Mbps downstream and 20 Mbps up, but that’s based on a “commercial decision, because today we're capable of more than that,” Lynch said. “The existing infrastructure we have in place truly is capable of more than that, and we'll see more than that coming from us” as costs come down and demand increases, he said. Relatively few customers today buy 50/20 service from Verizon, he said. But consumer bandwidth usage historically has been 10 times what it had been six years earlier, Lynch said. Fiber is the most economical way to keep up with demand, with a lower cost per bit to build and operate than copper, he said. Fiber is less vulnerable to weather than copper, and as a passive technology it has fewer failure points, he said. There’s not enough spectrum to make wireless a suitable substitute for fiber, he said. Lynch said the cost of taking fiber to rural areas is decreasing. As the technology advances, “you're going to continue to see that economic breakpoint moving out, he said. Fiber cables used to be reliable only up to 12.5 miles, but “that’s been stretched” and some say the limit is now about 37 miles, he said.

Policymakers should use localities as test beds for different broadband technologies, said President-elect Joanne Hovis of the National Association of Telecommunications Officers and Advisors. Localities aren’t tied to legacy investments or business models, so they are “an important opportunity for experimentation and innovation,” she said Thursday at an FCC workshop about fiber. Municipal networks can offer greater value than commercial networks for anchor institutions like schools, Hovis said. In Montgomery County, Md., many elementary schools get 100 Mbps broadband through fiber built by the county, she said. “The operating cost to the county, which does not charge the schools, is $71 per megabit per year,” she said. Other schools not served by the county’s fiber lease 1.5 Mbps T1 lines from a carrier -- and pay nearly $2,000 a megabit yearly -- net of E-rate subsidies, she said.

Any action the FCC takes on the Universal Service Fund “will be very cognizant of consumers and will be focused on looking at ways to break savings out of the system, so the impact on consumers can be lessened if at all possible,” Chairman Julius Genachowski told reporters after an FCC meeting Wednesday. A Wall Street Journal article that morning said the FCC was thinking about hiking consumer USF fees and imposing open-access policies. Also, Genachowski said a controversial Harvard University study on broadband should have equal weight with other information in the record.

Incumbent broadband providers accused a broadband study commissioned by the FCC of bias. The paper, written by researchers at Harvard’s Berkman Center for Internet & Society, concluded among other things that open-access policies drove broadband growth in other countries. The commission ordered the study to help it develop a National Broadband Plan. In comments Monday, incumbents and free-market proponents told the commission to scrap the report’s findings, but competitors urged the FCC to give them significant weight.