Federal Universal Service Fund

CenturyLink and Qwest promised that if their proposed deal is approved by the FCC, the new company will offer discount broadband with download speeds of at least 12 Mbps to 60 percent of their customers within seven years of the transaction being completed. The merged company will also phase out accepting federal support for local switching by 2014, forgo federal safety net additive payments and come up with a plan to freeze interstate common line support “on a per-line basis” by the beginning of 2012, CenturyLink and Qwest said. Chairman Julius Genachowski’s staff has been working on an order approving the transaction for at least two weeks, FCC officials said. Qwest spokesman Tom McMahon said the letter is the product of meetings with “FCC staff and the chairman’s office over a number of days, and we believe they reflect what the FCC will find to be in the public interest.”

Sprint Nextel has lost its effort to stay an Iowa order requiring payment of intrastate access of interconnected VoIP. That may be the beginning of a series of battles over VoIP as the FCC moves ahead with its Universal Service Fund revamp, said state and industry officials. Meanwhile, the U.S. District Court for the Eastern District of Virginia recently ruled that by refusing to pay access charges for VoIP traffic, Sprint Virginia is in violation of 19 interconnection agreements with CenturyLink business units.

Even historically nonpartisan telecom issues have become political in an increasingly divided Congress, and it’s become increasingly difficult to pass substantive legislation, former Sen. Byron Dorgan, D-N.D., said in an interview Thursday with Communications Daily. The Commerce Committee alum urged the FCC to complete what Congress couldn’t: an overhaul of the Universal Service Fund. Dorgan blamed radio talk show hosts for politicizing the net neutrality debate, but he predicted demise for Republicans’ effort to overturn the FCC’s December order using the Congressional Review Act.

The FCC Thursday unanimously approved three items aimed at improving communications and radio service on tribal lands. Commissioners also heard testimony from tribal leaders about the state of communications in Indian country. The meeting came as the White House held a follow up meeting on last year’s Tribal Nations Summit.

Rural carriers are gearing up to fight against the proposed cap on the Universal Service Fund and other objections they've found to the FCC’s rulemaking notice, association lobbyists said Tuesday. The cap, which would freeze the fund at 2010 levels, “has to be proven flawed,” Organization for the Promotion and Advancement of Small Telecom Companies Vice President Randy Tyree said on a conference call for members of several rural associations. It’s important that rural telcos and their supporters convince policy makers and legislators that the telcos are handling their USF cash well and that broadband will expand even further if the fund is allowed to expand, too, he said.

The FCC made the right decision by putting off a fight over contribution reform to focus on reforming the high-cost Universal Service Fund distribution system, said National Broadband Plan architect Blair Levin. There are “too many moving parts” in the debate over contribution factor, so the commission focused on “low-hanging fruit” in its recent rulemaking notice, Levin said on a panel Wednesday sponsored by the Congressional Internet Caucus Advisory Committee. He was having an exchange with fellow panelist National Telecommunications Cooperative Association CEO Shirley Bloomfield. She said she “would have liked to see the FCC wrestle with contribution.” NTCA members are seeing up to 10 percent of their bandwidth gobbled by companies like Netflix and the situation is critical, she said.

A broad state role is critical to modernize and streamline Universal Service and Intercarrier Compensation policies, state members of the Federal-State USF Joint Board told an FCC workshop Thursday. Speakers debated proposed changes in fund size.

Good oversight doesn’t include “wholesale attacks against agencies … for political purposes,” House Communications Subcommittee Ranking Member Anna Eshoo, D-Calif., told reporters Thursday. She rejected amendments to the Continuing Resolution -- debated Thursday -- that would affect FCC operations. Eshoo said at a media briefing that her priorities for this Congress include spectrum reform, overhaul of the Universal Service Fund and building a public safety wireless broadband network.

The FCC will structure reverse auctions carefully so all carriers will have a shot at federal funding for broadband, Wireline Bureau Chief Sharon Gillett assured state regulators at the NARUC meeting Tuesday. “The intent is to be neutral,” she said. The commission’s recent rulemaking on the Universal Service Fund and intercarrier compensation asks broad questions about reverse auctions but is essentially neutral about implementation -- focusing on census blocs, for instance, instead of geographic alignment, Gillett said.

The time may finally be right for an overhaul of the Universal Service Fund and of intercarrier compensation, said FCC Commissioner Michael Copps. He’s hopeful a “method” will be found to turn things like the rulemaking notice, approved by commissioners at last week’s monthly meeting, into “momentum” for making fixes to update the rules for the broadband age, he told us in a Q-and-A after his FCBA luncheon speech. “I think we've teed up an item that really raises all the issues,” he said, saying the regulator should hold stakeholder hearings on the issue. Copps used the speech to defend public broadcasting against Republican legislators’ efforts to cut funding and to urge the FCC and Chairman Julius Genachowski to do more to promote media diversity.