Some industry groups are using an FCC notice of proposed rulemaking on USF contribution methodology to argue for moving to a number-based method of calculating payments -- a question the FCC never raised, NASUCA claimed. The VON Coalition, CTIA and other groups said tweaks to current methodology will fall far short of needed reform.
Emergency alert legislation could be enacted as part of the port security bill moving through the Senate, key House and Senate committee staffers said Fri. at an FCBA lunch. Sen. DeMint (R-S.C.) introduced the Warning, Alert & Response Network (WARN) Act as an amendment to the port bill (HR-4954) Thurs. The Senate Commerce Committee approved the Warn Act by unanimous consent Oct. 20. It establishes a network for transmitting alerts across communications including cellphones, BlackBerrys, Internet, TV, radio and satellite TV.
George Mason U. Prof. Thomas Hazlett deserves a D for poor research, said 2 rural telecom officials unhappy with his characterization of rural telecom companies as high- spending (CD July 20 p7). Michael Fox of RT Communications and Jeffry Smith of GVNW Consulting issued a “response” to Hazlett: (1) “Rural is different,” with facilities costs that can’t be compared to urban areas. (2) The Universal Service Fund is needed to build rural infrastructure. (3) The USF isn’t a tax. (4) Growth in the USF “has been fueled by competitive entrants” not incumbents. (5) “Erroneous assumptions… lead to bad conclusions.” The authors who said they produced the response on their own -- concluded: “If the professor were a student, he might receive an A or B for his carefully-crafted writing style. However, we mark his paper with a C for logical flow and a D for veracity of research.” In a July paper for the Seniors Coalition, Hazlett said USF subsidies to rural companies encourage inefficiency and block adoption of advanced technologies.
The FCC fined Local Phone Services (LPS) $529,000 for not contributing to the Universal Service Fund. The FCC said LPS began offering long distance service in Kan. in 2002. The company registered to pay into the USF but its 2002 and 2003 revenues were considered “de minimis” and exempt from contributing under the program rules. However, in 2004 the company “no longer qualified for that exemption… but failed to file worksheets and make contributions to the USF for that year as required,” the FCC said. The Commission said LPS didn’t file worksheets through the end of 2005 and made no universal service contributions until May 26, 2006.
Comments on using reverse auctions for universal service support are due at the FCC Sept. 20 and replies Oct. 20, said a Federal Register notice Fri. The Federal State Joint Board seeks comments on many questions about USF auctions (CD Aug 15 p2).
The FCC Fri. sent a letter to Verizon asking why it hit customers with a new DSL fee just as a federal fee of about the same amount lapsed. However, the agency decided not to question BellSouth, which said Fri. afternoon it was killing plans for such a fee. FCC Martin reportedly was upset by the companies plans for replacement fees. “We generally prefer regulation be done by the marketplace but we will act to insure consumers’ interests are protected,” an FCC official said.
ASPEN, Colo. -- Verizon won’t seek a federal franchise bill next Congress if the telecom bill (HR-5252) fails to pass this year, Verizon Exec. Vp Tom Tauke said Tues. at the annual Progress & Freedom Foundation conference here: “We aren’t going to be starting out from the same place -- the appeal of video is going to be less.” Verizon’s state-level success with franchise laws significantly weakens demand for federal reform, Tauke said.
“The need for the $7 billion Universal Service Fund (USF) is less now than it was in 1998 when it was $3 billion,” said Thomas Hazlett Fri. The former FCC chief economist, a professor at George Mason U., answered questions about his views on the telecom industry on a call-in interview on C-SPAN. Hazlett echoed many of the conclusions in his study (CD July 20 p7) ‘Universal Service Telephone Subsidies: What does $7 billion buy?’ Telephone users are paying taxes to fund subsidies that go to inefficient rural telcos, Hazlett said. “These small rural companies,” who are given billions in USF subsidies, “are charging their customers the same rates, and occasionally more for their subsidized services,” said Hazlett. As a result many rural consumers are ditching land-lines for less expensive wireless services, he said.
Deregulating the Bells broadband transmission services would hurt rural telephone companies that rely on them for Internet backbone service, the National Telecom Co-op Assn., told the FCC in comments filed Thurs. The Bells are the only Internet backbone providers available to rural telephone companies in many areas, NTCA said: “NTCA is concerned for its members who will rely on BellSouth and Qwest for access to the IP backbone.”
Resurrecting an idea first aired several years ago, the Federal-State Joint Board asked for comments on using “reverse auctions” to distribute universal service funds in rural and other high-cost areas. The idea gained currency earlier this year when FCC Chmn. Martin voiced interest in letting phone companies bid to provide universal service in rural areas (CD March 30 p6). The term “reverse auction” sometimes is used to indicate that low bidders, not high bidders, get contracts.