Mass. consumers stand to lose $158 million a year if proposals to shift federal universal service contributions from a revenue base to a numbers or connections base are adopted, according to the Mass. Consumer Coalition and the Keep USF Fair Coalition. The groups, at a news conference in Boston, said the shift would hurt most the rural, minority, low-income and elderly phone customers who make few long distance calls. They said universal service contributions from Mass. would jump to $266 million a year on a connection- based assessment, from $108 million under the current system based on long distance revenues, assuming a fee of $1.50 a connection. The groups said those who use little long distance would suffer mammoth increases in their USF contributions, with the result that those who don’t make long distance calls will be subsidizing those who use lots of long distance.
Witnesses were in general agreement on reforming but maintaining the Universal Service Fund (USF), at a House Small Business Committee hearing on “advancing the innovation agenda” via telecom and IT. The 2-panel hearing featured exclusively company executives or lobbyists, so there was little disagreement. Main issues were USF reform, the research & development tax credit, Sarbanes-Oxley reform and net neutrality; after the hearing, Committee Chmn. Velsquez said moving forward on tech issues is on the Democratic agenda, but other issues will take precedence in the short term.
The FCC should reject M2Z’s proposal to build a 20 MHz national broadband network in the 2155-2175 MHz spectrum band, CTIA said Fri. The spectrum should be auctioned, not given to one company, it said. But M2Z got potentially significant support from the Media Access Project. And M2Z gave the FCC a study finding economic benefits to consumers of as much as $25 billion in 2007 dollars should it build its network.
Auctions can be a workable, effective way to disburse universal service subsidies, panelists at a Progress & Freedom Foundation seminar said Thurs. “Our knowledge of how to run auctions in complex situations has grown,” said Stanford U. Economics Prof. Paul Milgrom, considered a national expert on the design of govt. auctions. “I'm astonished how far we've come in auction design since the 1970s,” added Vernon Smith, George Mason U. economics professor and auction expert.
Broadband should be part of the Universal Service Fund (USF) program, rural senators told a Thurs. Senate Commerce Committee hearing. The FCC can do that, but Comr. Copps doubts he can get the other 2 votes needed for a rulemaking clarify that broadband can be included in USF, he said. Panelists favoring USF-sponsored broadband said congressional action would be the quickest route.
Cable operators got some clarity on VoIP interconnection rules from an FCC order saying incumbent LECs must give them interconnection rights and exchange traffic with cable systems. The Wireline Bureau order approved a Time Warner Cable (TWC) request seeking interconnection rights for certain types of phone calls. The order came after cable operators had argued before the Commission for such rights, and exactly a year after TWC complained to the agency about a S.C. PSC denial of a certificate it said it needed for interconnection agreements to sell VoIP (CD March 6 p12).
No hearings are planned to make the E-Rate antideficiency exemption permanent, but Commerce Committee staffers from both parties and chambers said Wed. their bosses have legislation to that effect on their agendas, and late-spring action is probable. The policymakers spoke at a National Coalition for Technology in Education (NCTE) panel celebrating E-Rate’s 10th anniversary. NCTE marked the event with a report rating the program’s performance and cataloging educational connectivity needs around the U.S. E-Rate reform concepts are still being formed, but all panelists spoke of ways they thought they could streamline the program.
Cyren Call CEO Morgan O'Brien’s spectrum proposal largely could solve America’s broadband access problems and deliver a fully interoperable safety network, he said. On a Hill panel at the New America Foundation, O'Brien said Fri. he'd have more details of the proposal Mon. in a filing with the FCC. It will answer questions about how the company can succeed financially serving public and private needs, he said.
Reverse auctions are a “great idea” that would benefit wireless businesses, Alltel CEO Scott Ford said Tues. during Alltel’s Q4 financial briefing. “The fact that some of the ILECs don’t want” to participate “leaves us a little concerned,” he said. Alltel wants all of USF overhauled, he said, predicting a “protracted battle” to do so. Alltel backs a “pilot” reverse auction focused on broadband deployment that would revamp the USF system (CD Feb 20 p10). Alltel’s revenue was about $2.09 billion, up 14% from 2005. Net income was $215.8 million, down 15%.
FCC Chmn. Martin said Tues. he sees reverse auctions as a solution for stemming the “unsustainable” growth of the Universal Service Fund caused by increased competitive providers. Martin told the Federal State Joint Board on Universal Service that he never supported giving USF subsidies to multiple recipients in an area, and just what he feared has happened -- a sharp rise in USF subsidies caused by the increase in competitive rural carriers.