Phased-in competitive bidding could slow the growth of the Universal Service Fund (USF) while easing concerns of incumbent rural telcos about shortfalls, Verizon and Verizon Wireless told the Federal-State Joint Board on Universal Service in a proposal filed late Fri. The Joint Board is expected to consider Verizon’s proposal at a Feb. 20 meeting during the NARUC winter meeting in D.C. The Joint Board plans to look at competitive bidding and other ideas for easing demands on the USF during that en banc meeting. The board includes FCC Chmn. Martin, Comrs. Tate and Copps and several state commissioners.
A federal appeals court indicated it may ask the FCC to reconsider parts of an order requiring VoIP providers to contribute to the Universal Service Fund. A 3-judge panel of the U.S. Appeals Court, D.C. questioned possible disparities in the FCC’s treatment of VoIP carriers in relation to other telecom carriers and asked the agency for legal justification for several sections of the order approved last summer (CD June 22 p1), during oral argument Fri.
The Universal Service Fund is too bloated to help expand broadband deployment, FCC Comr. McDowell told an NTCA conference in Orlando. “The Fund simply cannot afford to subsidize broadband connectivity under its current structure,” McDowell said: “The bitter truth is that we can’t keep asking more and more folks to prop up a failing system. Fundamental reform is necessary.” The FCC last summer voted to expand the pool of USF contributors, but “the contribution factor that was supposed to have declined as a result of the FCC’s action is back on the rise again,” he said: “Like a fever that initially responds to treatment only to rage again the next day, the factor initially declined from about 11 percent to 9 percent once we broadened the base. But for the first quarter of 2007 it has risen again to 9.7 percent -- and early indications are that the second quarter figure could spike to over 11 percent. If bold action is not taken soon, this fever will threaten the patient’s life.” The contribution factor is the percentage of eligible revenue that telecom companies must contribute to the USF, and its rise usually reflects a rise in USF disbursements. Wireless spectrum is one hope for broadband deployment in rural areas served by NTCA members, said McDowell: “I hope that you'll be active participants in the 700 MHz auction. The Commission is doing its part to help you move away from reliance on the Universal Service Fund by opening new windows of opportunity for the construction of new delivery platforms with new technologies and robust competition.”
A proposed White House FY 2008 budget would double FCC spending for oversight of the Universal Service Fund, add $2 billion in interoperability funds and spend $426.3 million on the digital converter box program, according to documents submitted Mon. to Congress. OMB Dir. Rob Portman called the President’s budget request “credible” in a briefing with reporters. Portman said he consulted with Congress before drafting the document so he could be responsive to concerns.
A special access provision included in the AT&T- BellSouth merger drew fire during the FCC’s visit to Capitol Hill Thurs. for the first hearing in the 110th Congress. Senate Commerce Committee Chmn. Inouye (D-Hawaii) asked Martin why he voted for the merger if he had qualms about the legality of the provision, referring to a statement Martin released after the merger. “If you felt so strongly, don’t you think you had an obligation to withhold your vote?”
St. Joseph High School in the Virgin Islands told the FCC it has twice filed an appeal of a decision by USAC that it should have to pay back USF funds it received in 2000-2001 and its appeal was twice lost by the FCC. The school sent its first appeal to the FCC office located in Capitol Heights, Md., in Oct. 2006. “The appeal was apparently never re-routed to the appropriate office at the FCC, however, and was never entered into the record for the above listed proceeding,” the school said. In Dec. 2006 the FCC Office of Secy. instructed the school to refile with the Wireline Bureau. “As of the date of this filing, no record of either the original appeal or the retransmission of the appeal is evident in the electronic comment filing system (ECFS) record for proceeding 02-6,” the school said. It asked the FCC for a waiver of the deadline for filing the original appeal.
Backers of the Missoula plan to reform FCC intercarrier compensation rules reached terms with 5 states guaranteeing “early adopter” states that already have cut intrastate access charges won’t be hurt by broader changes. Regulators from Ind., Me., Neb., Vt. and Wyo. sent the FCC a letter endorsing the agreement, filed as an amendment to the plan.
FCC officials have been working long hours in preparation for Thurs.’s Senate Commerce Committee hearing, at which all 5 Commissioners will testify. The hearing marks the beginning of the Democratic Congress’ commitment to stronger FCC oversight; senators are expected to lob some tough questions, Hill sources said. The House Commerce Committee plans a similar hearing with equally close scrutiny in mid-Feb., a committee spokeswoman said.
Numbers-based collection of federal Universal Service Fund (USF) contributions would be simpler to administer and easier for consumers to understand, said an industry study released Tues. The Numbers Coalition, made up of wireless, cable and telecom associations, said the per-number fee would be about $1.20 per month, about what residential wireline consumers now pay. Low-income Lifeline customers could be exempted, with adjustments to ensure against unreasonable assessment against low-volume and low-cost services, the study said. “The numbers-based USF fee does not discourage telephone usage and thus increases consumer welfare as a whole,” the study said: “Consumers would be able to make more long-distance calls for their collar than they do today.”
Arguing for reverse auctions, Paul Garnett, CTIA asst. vp, met this week with Dir. Billy Jack Gregg of the W.Va. PSC’s Consumer Advocate Div. to explain the group’s position on USF reform, CTIA said in a filing at the FCC. Gregg is an important telecom player in NASUCA. Reverse auctions could “drive down the cost of universal service while providing incentives for efficient investment” in wireless and other new technologies, CTIA said.