FCC Chmn. Kevin Martin plans to proceed as soon as the fall on a proposal to change how telecom providers contribute to the Universal Service Fund, he said Mon. after a speech. Martin told reporters he is waiting for a U.S. Appeals Court, D.C., decision on a related universal service issue before teeing up a proposal to replace the revenue-based contribution system with one relying on phone numbers.
FCC Chmn. Martin backs “exploring” inclusion of broadband in the high-cost Universal Service Fund (USF), he said in a letter to House Telecom Subcommittee Chmn. Markey (D-Mass.). Martin declined to answer Markey’s April 2 query (CD April 3 p7) as to whether Martin favors using USF subsidies for broadband -- a strategy explored in several legislative proposals on Capital Hill.
As expected, the FCC issued a call for comments on the recommendation by the Federal-State Joint Board on Universal Service for an interim cap on USF subsidies to “competitive eligible telecom carriers” (CETCs), which generally are wireless providers (CD May 2 p1). The agency said comments would be due 14 days after the notice of proposed rulemaking is published in the Federal Register, and replies 7 days after that. The FCC asked for comments on a variety of issues, including “whether there are public interest concerns” about limiting the cap to CETCs. Parties that disagree with the recommended year’s duration for the cap should explain why, the FCC said. “We also seek comment on the Joint Board’s recommendation to impose the cap on a state-by-state basis, including how this would affect the state ETC designation process,” the NPRM said: “Parties should also address whether the cap should be set at the level of support received by competitive ETCs in 2006, as the Joint Board recommended, or some other level.”
Democrats are scrambling to fill broadband gaps in rural America, with House Telecom Subcommittee Chmn. Markey (D- Mass.) drafting a bill based partly on a successful state program that mapped high-speed service holes. Markey’s bill would have NTIA draw and maintain the map, to be posted on the Internet and searchable by users, according to a copy of the discussion draft. A hearing on the bill is set next Thurs.
The FCC should avoid asking carriers for overly granular data in studying sector competition, CTIA said. The group was responding to an agency request for comments on wireless industry competition to go into the agency’s 12th Annual CMRS Competition Report. CTIA said USF money will be key to greater wireless expansion in rural America.
The FCC levied $1 million-plus in fines against 2 telecom resellers for not contributing to regulatory funds or to file related paperwork. Wireless reseller InPhonic was fined nearly $820,000 for not paying into the Universal Service and Telecom Relay funds, not submitting worksheets showing what it owed and not registering as a contributor until after it was providing service. The FCC proposed an additional $100,000 fine for failing to get authorization to provide international telecom service. InPhonic buys air time wholesale and resells it. Global Teldata, a reseller of local, long distance and international service, was fined $236,774 for not making USF contributions, registering or submitting worksheets.
Claims that a cap on wireless universal service recipients wouldn’t be competitively neutral “ring hollow” because wireline LECs have had caps in the past, USTelecom Pres. Walter McCormick told the FCC in a letter. “Universal service caps are not new,” he said in response to concerns voiced about a recommendation by the Federal-State Joint Board on Universal Service (CD May 3 p1). “Almost a decade ago, the Commission established an indexed limit on the high- cost fund for ETCs [eligible telecom carriers] and capped the amount of corporate operations expense that an ETC could recover” through USF payments, he said. As now, the action was taken to “prevent excessive growth in the size of the universal service fund,” McCormick said, and the cap was upheld by the 5th U.S. Appeals Court, New Orleans. “Unlike the high-cost fund for incumbent ETCs, the universal service support available to competitive ETCs has never been capped,” McCormick said.
The Kan. Corporation Commission refused to reconsider an early-April decision that it has authority to regulate the billing practices of wireless carriers getting universal service subsidies. It denied reconsideration pleas by 5 wireless carriers, saying none made a convincing case that the original ruling was wrong. The carriers said federal laws denying states jurisdiction over wireless rates and entry preempt state laws on certifying eligible telecom carriers (ETC), particularly carriers getting only federal universal service funding. The KCC (Case 06-GIMT-187-GIT) called billing integral to providing the universal service entitlement, saying the state can’t be given authority to qualify carriers for subsidies while being denied authority over provision of services those subsidies fund. The KCC also said state universal service statutes apply to the services being provided, no matter what technology is used to supply them.
Along with a cap on universal service subsidies (CD May 2 p1), the recommendations from the Federal-State Joint Board on Universal Service late Tues. could hit wireless carriers with a 2nd reduction in their payments. The Joint Board urged the FCC to “consider abandoning or modifying the so- called identical support… rule.” The rule bases competitive carrier funding on the same per-line support given to the rural ILEC operating in the same area.
In a letter to FCC and state regulators, Qwest recommended reforms to the Universal Service Fund’s high-cost program: (1) Capping per-line support to all USF eligible carriers and (2) subsidizing only one wireless connection a household. These are temporary measures, Qwest told members of the State-Federal Joint Board on Universal Service in the April 26 filing. Qwest said permanent changes are needed but it agrees with the “common theme” of recent reform proposals “that the unchecked growth of the universal service high-cost fund must be contained immediately.” For the long run, Qwest recommended Verizon’s proposal to continue capping high-cost support but said “the support should be re-targeted to high cost wire centers and redistributed prior to capping the fund.” In addition, if the Joint Board and FCC decide to use reverse auctions to distribute funding, they should adopt Verizon’s proposal to start with auctions for wireless providers, Qwest said. Meanwhile, the Western Telecom Alliance threw its support to an AT&T proposal for USF reform. “AT&T’s interim stabilization plan properly focuses upon the skyrocketing… support” to competitive providers, the rural telecom group said. “AT&T’s proposal to place a targeted cap upon the industry sector most responsible for recent USF growth is reasonable, effective and equitable.” The plan’s one-year moratorium on new applications by competitors will slow the USF’s growth, the Alliance said.