LAS VEGAS -- FCC Commissioner Robert McDowell sent FCC Chairman Kevin Martin a list of edits on an order that would cap Universal Service Fund payments to competitive eligible telecom carriers (CETCs) at end-of-year-2007 levels, agency sources said. McDowell backs a carve-out for tribal lands in all 50 states, including Alaska, but without language specific to Alaska carrier GCI. McDowell proposed language saying that the FCC would make an earnest effort to undertake comprehensive USF reform.
An economic slowdown means opportunity for alternative phone companies, as well as curtains for some VoIP companies, industry officials said in interviews. Meanwhile, former Bell companies and other wireline incumbents dismissed notions that their businesses are vulnerable.
FCC Chairman Kevin Martin aims to fast-track a TracFone request to become an eligible telecommunications carrier (ETC) for the Universal Service Fund (USF) LifeLine and LinkUp program, he told a Thursday press conference. Approving TracFone’s request would “add an additional service option” for low-income consumers, he said. The request had been held up because it was included in the USF cap proposal, Martin said. Last month, he circulated it as a separate order, he said. “The cap has not moved forward yet, and as a result I don’t think it’s fair to hold the grant of this particular application up any longer,” Martin said. Meanwhile, Martin didn’t know if the interim cap proposal would progress soon, he said. “But I hope so.”
The proportion of long distance revenue carriers must contribute to the Universal Service Fund in the second quarter of 2008 increased to 11.3 percent from 10.2 percent in Q1, the FCC said Friday. To get the “contribution factor,” the agency divides projected carrier revenue by expected USF subsidies for the quarter. Of an estimated $1.91 billion in Q2 subsidies, about $1.15 billion is for the rural high-cost program, $532.53 million for the E-rate program, $208.08 million for low-income support and $61.18 million for the rural health-care program. Rural wireless carriers are to blame for the “hike” in phone bill USF fees, said Tom Tauke, Verizon public affairs, policy and communications vice president. He urged the FCC to vote for an interim cap. “Consumers will thank the FCC when three commissioners finally call a halt to funding windfalls for some companies from the Universal Service Fund,” he said. A wireless source shot back: “If you really want to do something about controlling fund growth, then a good place to look would be to change the rules that allow the incumbent’s support to grow even after the incumbent wireline carrier loses customers.”
Gov. Dave Freudenthal, D-Wyo., urged the FCC to waive his state’s deadline to file for rate-comparability certification. Without the waiver, the state’s late filing will cost telecom carriers there more than $3 million in universal service high-cost support this quarter, Freudenthal said. “Receipt of this support is particularly significant given the rural nature of our state and our small population.” The waiver request, by the Wyoming Public Service Commission, “does not try to expand” the USF, he added.
The FCC should adopt reverse auctions to “reduce the amount of money wasted” on the universal service fund, the Seniors Coalition said. The Seniors also urged the Commission to “curb abuses” under the “identical support rule” that bases USF subsidies on the cost of running incumbent telecom companies. “When a wireless carrier that has made little or no investment in infrastructure is allowed to get the same subsidy in this fashion, the result is a gold-plated waste of taxpayer dollars.”
The universal service high-cost fund will “spiral completely out of control” if the FCC grants a Hawaiian Telecom waiver petition, the National Telecommunications Cooperative Association said in reply comments. The carrier disagreed, saying “special circumstances” justify its exemption from usual measurement methods used to set a non- rural local incumbent carrier’s USF support. Even if USF measurement methods need an overhaul, opponents said, it should come in three proposed rulemakings now before the FCC.
FCC Chairman Kevin Martin said he didn’t delay FCC action on a Universal Service Fund cap or broader USF reform. Martin said a proposed cap is before commissioners but “I haven’t gotten signals from the commissioners that they're willing to end up moving forward.” For a second month, Martin detailed in a meeting with reporters all items on which he seeks votes (CD March 4 p1) at the next monthly meeting, more advance notice than has been agency practice.
A federal court declared it “unlawful” for Nebraska to force Vonage to pay into a state universal service fund. The U.S. District Court for Nebraska slammed the Nebraska PSC with a preliminary injunction, saying the PSC’s “authority to regulate the nomadic interconnected VoIP service provided by [Vonage] is preempted by the FCC, and Vonage need not comply with the [Nebraska USF order].” The order applies only to Nebraska, but will “send a signal” to other states, said Stifel Nicolaus analyst David Kaut.
NASHVILLE -- The FCC should give states clear jurisdiction to set rates for unbundled network elements provided under section 271 of the Telecom Act, state regulators said on a CompTel panel Tuesday. States are the “most capable government entities to protect consumers,” said Arizona Corporation Commissioner Kris Mayes. States are closer to the people and know the competitive environment within their boundaries better than the FCC, agreed Tennessee Regulatory Authority Chairman Eddie Roberson. “I understand the justification for [federal] preemption, and maybe in some cases it’s appropriate, but I think that we need to go very slowly in that area.”