The Florida Public Service Commission stripped competitive landline reseller Vilaire Communications of its state operating authority, saying it filed false claims for universal service subsidies. Vilaire was an AT&T reseller specializing in service to low-income customers who qualified for Lifeline and Link Up service. The PSC said it acted because routine audits discovered the Washington-based company"falsely obtained” $1.3 million in federal Lifeline and Link Up subsidies since August 2006 through double- dipping in the federal universal service fund, and was charging customers an E-911 fee 50 percent higher than state law allowed. The PSC said Vilaire would receive resale universal service credit from AT&T for each Lifeline and Link Up customer. The PSC said Vilaire then submitted claims directly to the federal USF for those same customers, in effect getting paid twice for each customer. The PSC said Vilaire also filed subsidy claims for access lines that didn’t exist, and charged a 75 cent E-911 fee when state law caps such fees at 50 cents. The PSC assigned Vilaire’s customers to AT&T until they choose another local provider and said it would refer its universal service findings to federal authorities.
The FCC cleared T-Mobile’s $2.4 billion acquisition of Suncom Wireless, saying in an order that the merger won’t hurt competition. T-Mobile and Suncom expect the merger to close this month instead of in April, as they had predicted, they said. Unlike its handling of other mergers, the FCC didn’t impose a Universal Service Fund cap.
Congress should pass legislation regulating wireless customer service policies to make industry practices uniform, said Verizon Executive Vice President Tom Tauke in a briefing with reporters Monday. He praised broadband mapping legislation that would create a nationwide database measuring the level of broadband deployment throughout the nation. The effort could help increase access in rural areas, he said.
A “deep need for fundamental reform” of the Universal Service Fund should inspire action on the “practical” proposals by the Federal-State Joint Board on Universal Service, FCC Commissioner Deborah Tate said at a Federalist Society forum Tuesday. A USF revamp is an “overarching public policy issue” that isn’t likely to make one of David Letterman’s top ten lists, but it “probably should because it affects everyone,” Tate said. She co-chairs the joint board, which issued recommendation in November. “We just need to get on with it,” she said.
The FCC seeks $338.8 million in its FY 2009 budget, with $25.5 million set for an inspector general’s oversight of the Universal Service Fund, according to budget documents released Monday. The budget also includes $20 million to educate consumers about the 2009 digital transition, money that would be spent on media tours, public service announcements, direct mail campaigns and other public education activities. The commission also is seeking $1 million for a clearinghouse program to expand outreach to police and fire agencies.
The FCC late Tuesday opened three universal service proceedings and asked for public comment, setting in motion a long-awaited effort to reform the Universal Service Fund. The agency wants to distribute universal service subsidies more efficiently and lessen the fund’s growth. The FCC voted last week on the items, whose release was delayed until commissioners could write explanations of their positions. The notices of proposed rulemaking are interconnected so parties can comment on them as a package.
With the outlook increasingly bleak for a minimum required bid to win the 700 MHz D-block license, Commissioner Michael Copps said Tuesday that, no matter what happens, the FCC will have to make certain that public safety has a national, interoperable broadband network. At our deadline, the only bid for the 10 MHz national license was the $472,000 bid made on day one, which is well short of the minimum $1.33 billion. No company has come forward to replace Frontline Wireless, which announced before the auction began that it would not make the down payment required to participate in the auction.
The FCC may release three universal service items for public comment as soon as today (Friday), indicating it may be ready to start moving on long-awaited Universal Service Fund reform. Commissioners already have voted on the three items, which will have the same comment dates so parties can file one set of comments covering all three if they wish, a source said.
Capping subsidies only to selected wireless companies, such as AT&T Mobility and Alltel, won’t stop the Universal Service Fund from growing, AT&T said in an ex parte meeting Tuesday with FCC Commissioner Robert McDowell. The reference was to USF caps imposed on companies after acquisitions, such as in the AT&T-Dobson merger and Alltel’s purchase by TPG Capital and Goldman Sachs Capital. McDowell last month questioned the a need for a cap on rural wireless competitors, since caps were required in the acquisitions (CD Dec 21 p2). “Capping only AT&T Mobility and Alltel leaves 51 percent of wireless CETC [competitive eligible telecom carrier] funding uncapped,” AT&T said in a paper presented at the meeting.
A rural telecom company proposed a plan it said would let the FCC control Universal Service Fund growth without “drastic and untested reverse auctions.” In a letter to the agency, Panhandle Telecommunications Systems urged the FCC to continue letting multiple wireless competitors operate in rural areas but give them an “economic incentive” to use other wireless carriers’ networks where it isn’t economically feasible to build more facilities, PTS said. Wireless rivals’ universal service support should be based on their own costs, not the “identical support” process, which bases competitors’ support on incumbent local exchange carrier costs, PTS said. Under the plan wireless competitors would have to share their networks with other wireless carriers licensed in the same area and charge less than the standard roaming rate. This would discourage building more networks and lessen the drain on the USF, which finances those networks, the plan said. The proposal is by the competitive subsidiary of Panhandle Telephone Cooperative, making it more neutral than some, PTS said. Panhandle Telephone Cooperative is an incumbent local exchange carrier in Oklahoma, Texas and New Mexico. Its PTS subsidiary provides competitive wireless service in Oklahoma and Kansas and competitive local exchange carrier service in Texas. The reduced roaming rate would be based on “the national average cost to produce a wireless minute,” also called “local wholesale rate,” PTS said. This rate would be used to set USF support for wireless competitors, PTS said. A formula would be devised to let wireless competitors “calculate their own costs based on a national average cost without resorting to the highly- regulated and burdensome cost accounting methods currently required of some ILECs,” PTS said. The proposal includes a procedure for paying competitive wireline companies. They would have to do cost studies like those incumbent rate-of- return LECs do. “Since many rural CLECs are accustomed to preparing cost studies in their affiliated ILEC areas, they should be willing to prepare a similar study for their CLEC areas as well,” the letter said. The plan would cap USF support for a wireline CLEC at 1.5 times the support per line in the state where the company operates.