The FCC is using a “hoax” argument that the Universal Service Fund (USF) contribution process is broken to justify fee hikes, a citizen group charged Fri. The USF contribution formula “requires at most minor adjustments that can be accomplished without hefty increases in federal phone fees,” the Keep USF Fair Coalition said. The group opposes FCC Chmn. Martin’s proposal to move from a long distance revenue- based system to one based on how many telephone numbers a carrier serves, claiming it would penalize low-volume long distance callers. At a news event set for today (Mon.), the group will discuss “the phony USF funding crisis.” A Tues. Senate hearing will address USF contribution methodology. Progress & Freedom Foundation Pres. Ray Gifford said the coalition’s view “is contrary to established fact.” The long distance industry, which is the basis for the current contributions system, “is in decline and it makes no sense as a funding vehicle for universal service in the age of VoIP technology.” A PFF working group has endorsed per-line fees.
The Senate Commerce Committee on Thurs. listed witnesses for a universal service fund (USF) hearing Feb. 28: Glenn Post, Century/Tel CEO; Tom Simmons, vp-public policy, Midcontinent Communications; Trent Boaldin, pres.-Epic Touch; Bonnie Cramer, AARP member; and Paul Garnett, asst. vp-regulatory affairs, CTIA. The witnesses are to testify at the first hearing, on USF contributions. The 2nd hearing, on USF distribution methodology, will hear from Jeff Mao, Me. Dept. of Education; Shirley Bloomfield, vp-govt. affairs, NTCA; Carson Hughes, Cellular South; Tony Clark, pres.-N.D. Public Service Commission; and Free Press Policy Dir. Ben Scott.
A House universal service bill revealed in draft form in Nov. may see formal introduction by the end of Feb., sponsors said Wed. at a Congressional Rural Caucus forum. The timing may depend on negotiations with rural telcos on capping the Universal Service Fund’s size, Reps. Terry (R-Neb.) and Boucher (D-Va.) told rural House members at the forum.
Rep. Boucher (D-Va.) asked NARUC to take a position on broadband network neutrality and universal service reform. In a Tues. talk at the NARUC winter meeting in Washington, D.C., Boucher urged NARUC to “get involved. You have a special understanding of the situation and we want your advice and guidance.” NARUC also heard from industry panelists and Sen. Wyden (D-Ore.) on network neutrality.
CTIA officials are promoting a new proposal for USF reform that combines the “numbers-based” approach to collections promoted by Chmn. Martin with a capacity-based assessment for large users. CTIA began circulating its version of USF reform the past few weeks, a spokesman said. CTIA Pres. Steve Largent highlighted the USF proposal Mon. during a lunch with reporters, calling it one of the Assn.’s top priorities.
Using a flat-fee system to support the Universal Service Fund (USF) would hit Latino customers with higher costs, several citizens organizations warned Thurs. A proposal supported by FCC Chmn. Martin would base carrier contributions to the USF on a flat, per phone number basis. Since carriers pass those costs onto customers, low-volume customers would pay the same as those who make a lot of phone calls, said the groups, part of the Keep USF Fair Coalition. The USF is now funded on a revenue basis, so low-volume customers pay less than high-volume users. Those who make few long-distance calls or use prepaid wireless phones will either have to pay more or start paying for the first time, said the League of United Latin American Citizens, the Latino Issues Forum and Consumer Action. “Other than older Americans, Latinos and Hispanics account for the largest number of Americans who would end up paying more under the Martin plan for USF” because they are very low income according to Census Bureau data, the groups said in a news release.
Citing the DTV transition mandate he helped pass, House Commerce Committee Chmn. Barton (R-Tex.) said Wed. he’s ready to deliver telecom bills he hopes President Bush can sign in 2006. “It’s time to stop talking and to start working,” said Barton, saying he plans to meet next week with Ranking Member Dingell (D-Mich.), Telecom Subcommittee Chmn. Upton (R-Mich.), Ranking Member Markey (D-Mass.) and Rep. Pickering (R-Miss.) -- the main artisans behind the draft “BITs” telecom bill. His panel has made “tremendous progress” on the bill and expects introduction in Feb. or early March, with a hearing and markup to follow, Barton told an Internet conference,
FCC Comr. Adelstein has “long supported a revenue approach” for raising money for the Universal Service Fund “because it’s easier to administer,” he told OPASTCO members Wed. at their winter meeting in Maui. That doesn’t mean he would reject proposals to move away from revenue, he told them. “I'm open to exploring all alternatives; I don’t reject any of these” proposals for reforming the USF contributions system, but none of them is “a panacea,” he said. The FCC is considering changing the way carriers contribute to the USF because of concern the current revenue-based approach no longer works due to changes in industry technology. Adelstein told the group universal service reform is one of the top 3 issues before the FCC this year. Others are intercarrier compensation and IP-based services -- and all 3 are interrelated. “I don’t know if we ever had such a big nut to crack” at the FCC, he said: “Each one of those 3 proceedings is a huge challenge and complicated on its own” and all have to be done in concert. During a Q-&-A session after Adelstein’s speech, rural telecom executives emphasized their concern about phantom traffic. Phantom traffic needs to be dealt with before the FCC takes on USF reform because “the basics need to be handled first,” said a telecom official from Minn. Adelstein said he agreed there was “a good argument for doing it first.” He told the group that “some people, I think, prefer to have this [issue] out there as a driver” to force consensus among supporters of various proposals. However, phantom traffic “may be harder” to fix if regulators wait, he said. In answer to another question, Adelstein said FCC rules require video content providers to offer nondiscriminatory access to their content at reasonable rates but the rules are limited. It’s “contrary to the intent” of the rules for companies to use their “vast hold on the market” to impede access to content, he said. One audience member asked if it made sense for rural carriers to keep “pouring” money into networks while intercarrier compensation and USF reform remained pending. Adelstein told him the FCC, and the Senate Commerce Committee, strongly support USF. “We can’t afford to let these networks go. They are critical to future economic competitiveness.”
The House will pass a telecom bill this year, although agreement has yet to be reached on sticky issues such as net neutrality, Commerce Committee aides told an FCBA lunch Fri. The legislation will be “market-based and market-driven,” said Howard Waltzman, the committee’s majority chief telecom counsel: “We're going to rely on the market to regulate these services and not have a heavy hand in govt. regulation. That’s what’s going to drive this legislation.”
The first session of the 109th Congress started on a fast track for telecom when the House quickly approved a broadcast decency bill in March, but its performance leaves much for the second session to complete. Chances for completing action on long-awaited DTV provisions ended when no deal was reached 2 days before Christmas. Congress approved a one-year exemption from Anti- Deficiency Act rules for the Universal Service Fund (USF) in Nov. In an effort led by Senate Commerce Committee Chmn. Stevens (R-Alaska), the measure was included in the Commerce-State-Justice appropriations bill.