Reverse auctions are a “great idea” that would benefit wireless businesses, Alltel CEO Scott Ford said Tues. during Alltel’s Q4 financial briefing. “The fact that some of the ILECs don’t want” to participate “leaves us a little concerned,” he said. Alltel wants all of USF overhauled, he said, predicting a “protracted battle” to do so. Alltel backs a “pilot” reverse auction focused on broadband deployment that would revamp the USF system (CD Feb 20 p10). Alltel’s revenue was about $2.09 billion, up 14% from 2005. Net income was $215.8 million, down 15%.
FCC Chmn. Martin said Tues. he sees reverse auctions as a solution for stemming the “unsustainable” growth of the Universal Service Fund caused by increased competitive providers. Martin told the Federal State Joint Board on Universal Service that he never supported giving USF subsidies to multiple recipients in an area, and just what he feared has happened -- a sharp rise in USF subsidies caused by the increase in competitive rural carriers.
Senate Democrats predict spring hearings on net neutrality -- an urgent issue that must be addressed, according to speakers at a NARUC conference Tues. Colin Crowell, an aide to House Telecom Subcommittee Chmn. Markey (D-Mass.), called neutrality a “central issue of the broadband era” that will be around a long time. Markey wants Congress to focus on what policy changes would mean for smaller voices on the airwaves and pay TV and for entrepreneurial Internet companies seeking a foothold.
If the FCC granted all petitions from companies seeking eligibility for universal service money, USF support would increase by close to $150 million annually, Embarq warned the FCC in a Feb. 15 ex parte letter. If AT&T Mobility, which seeks designation as an eligible telecom provider in Ga. and Va., extended that request nationwide, an additional $250 million would be added, the company said. The AT&T petitions were filed when the company was named Cingular.
The Universal Service Fund (USF) would get a permanent exemption from Anti-Deficiency Act accounting rules under a bill introduced last week by Sen. Rockefeller (D-W.Va.) Separately, the continuing resolution passed last week (CD Feb 15 p1) includes a provision to bar primary-line restrictions on USF until Dec. 31.
Another universal-service proposal has surfaced, this one from wireless provider Alltel, which backs a “pilot” reverse auction focused on broadband deployment. A bidder would win by offering the lowest price for deploying “substantial broadband service,” in addition to existing USF- supported basic services, to specific percentages of a zip code’s population, Alltel said. All eligible telecom carriers (ETCs) operating in an area, not just the auction winner, would get comparable per-line funding for making the same service commitment. The plan calls for revamping the USF system, such as by limiting growth of per-line support in each study area to the inflation rate. The “transitional” reforms require more accountability and reporting by ILECs and competitive ETCs and would make the Universal Service Administration Co. (USAC), not NECA, responsible for collecting and processing cost data and setting support amounts. NECA is “an RLEC-dominated advocacy group,” Alltel said in the Feb. 16 ex parte filing with the Federal-State Joint Board on Universal Service. The plan would “retain the rule that all ETCs receive the same amount of support per line served,” a practice rural LECs strongly oppose. To “target funds more effectively,” Alltel would: (1) Consolidate study areas served by a single ILEC holding company in each state into a single study area. (2) Apply “non-rural” funding rules to such study areas if they had 50,000-plus lines. (3) Revise the “high cost model” support mechanism for nonrural carriers “to provide support in the highest-cost wire centers nationwide, not just in 10 states.” Rural consumers want high-bandwidth and wireless services but “due to the relatively high costs of deploying… networks in many rural areas, these services are being deployed less rapidly in rural areas than elsewhere,” Alltel said. The plan builds on ideas from W. Va. PSC Consumer Advocate Bill Jack Gregg and others, Alltel said: “These policy changes will affect CETCs as much as ILECs. Alltel is not offering these proposals in an intent to benefit or harm any category of providers.”
House IP Subcommittee Chmn. Berman’s (D-Cal.) “differing orientation” on copyright isn’t keeping Rep. Boucher (D-Va.) from believing his sometimes-lonely crusade to bolster copyright fair use will bear fruit this year. That’s because Boucher has influence elsewhere. He’s on the verge of introducing another “very broad” Universal Service Fund bill that would include broadband in the program, Boucher told us. He expects little opposition to his municipal Wi-Fi bill, originally in 2006’s telecom bill (HR-5252) as a stand-alone measure this Congress, despite telco qualms, he said. Failure to resolve net neutrality will kill broader telecom legislation, like last year, he said -- clarifying his comments on neutrality at a recent State of the Net conference, which sparked wide speculation.
BellSouth told the Fla. PSC it lacks authority to set up an automatic Lifeline enrollment program through incumbent telcos and the state Dept. of Children & Families (DCF) because it has no jurisdiction over the DCF. BellSouth (now AT&T) urged dismissal of a petition for automatic Lifeline enrollment filed by the AARP and state Office of Public Counsel. The petition said only one of 8 eligible Fla. households participates in Lifeline, and the state gets back only about 40% of the dollars it contributes to the federal Universal Service Fund. It said that automatic Lifeline enrollment for any household receiving public assistance from the DCF would be the most effective way to increase Lifeline participation and erase the universal service deficit. BellSouth (Case 06-0677-TL) said Lifeline is important for ensuring that all consumers have affordable access to telephone service, but the PSC can’t exercise a say over another state agency to expand Lifeline participation. It also said the PSC should give recent Lifeline enrollment efforts a chance to work.
Alltel fears Verizon’s universal service reform plan may unfairly target wireless companies, an Alltel official said. The company, still studying the Verizon proposal, “would be concerned with any plan… that implies that wireless is to blame for problems with the current funding system and essentially asks wireless to shoulder much of the burden of USF reform,” he said: “As Verizon correctly identifies, we need a system that provides all high-cost funding recipients with more rational incentives and ensures that consumers receive the benefits of innovation.” Alltel is a major provider of competitive wireless service in rural areas. Verizon’s plan and others will be reviewed by the Federal-State Joint Board on Universal Service 2 p.m. Feb. 20 at the Renaissance Washington Hotel during NARUC’s week-long winter meeting.
Verizon isn’t seeking “sweeping” telecom legislation this Congress, Exec. Vp Public Affairs Tom Tauke told reporters Mon. The 2007 focus is getting broadband to consumers who lack it, but that doesn’t demand major legislation, he said. Congress simply may need to refocus existing grant and loan programs, Tauke said.