There’s no reason FCC has to limit itself to same universal service contribution system for all types of telecom carriers, American Assn. of Paging Carriers (AAPC) told Commission in comments Fri. AAPC told agency that all 3 proposals to change contribution methodology to one based on connections would hurt paging companies and suggested agency use different systems for different carriers
While economic improvement will be major theme pushed by most ILEC and Bell company lobbyists on Capitol Hill in new session beginning in Jan., ILECs also plan to address other issues, from tax reform to content management. Bell and ILEC lobbyists have said regulatory change that could help spur investment is primary goal, but many are vague on specifics and cite pending FCC action as precursor to Hill lobbying strategy.
Congress eventually will have to “weigh in” on universal service, NTCA CEO Michael Bunner said Wed. in letter to incoming Senate Commerce Committee Chmn. John McCain (R- Ariz.) that urged continuing universal service fund (USF) support. “We continue to advocate these concepts before the Federal Communications Commission in a plethora of open proceedings,” letter said. “Yet, it is our belief that it will be crucial for Congress to weigh in on these matters as well, to ensure congressional intent is being met in terms of ensuring the future of this indispensable national policy.” Bunner said “string of adverse regulatory and judicial decisions” in name of “competitive neutrality” have eroded congressional mandate on universal service. “The Senate has long played a leading role in advocating and monitoring the many aspects of this critical national policy,” he said. NTCA outlined its leading USF principles: (1) Universal service support must be sufficient and sustainable and all providers of telecom should contribute as public interest mandates. (2) Eligible telecom carriers (ETCs) receiving universal service support should receive such support based on their own costs rather than on costs of incumbent. (3) Competing ETCs should receive support only when they actually had captured customer lines, begun service to new lines or modified their rates or services. (4) States must take their public interest duties more seriously when authorizing additional ETC’s in given market.
SAN FRANCISCO -- Internet not only is undercutting rural telcos’ regulatory-based revenue sources, but also is shifting their policy focus away from states, industry conference heard here Mon. As e-mail, instant messaging and Web-based services, along with cell calls, increasingly supplant wireline voice and fax communications, local incumbents’ access revenues plunge correspondingly, compounding regulatory reductions in access rates, Chmn. Robert Riordan told convention of OPASTCO.
Mich. PSC called for comments by Sept. 9 on whether it should create state universal service fund (USF) to supplement federal universal service support. PSC (Case U- 13477) asked parties to comment on: (1) Whether state USF was necessary. (2) Effects of USF on affordability under rate regime of total element long-run incremental cost. (3) Other effects on state and industry if PSC were to create fund. Parties also were asked to make suggestions on how PSC should conduct USF inquiry and timeline it should follow.
Requiring all facilities-based broadband providers to contribute to schools and libraries (e-rate) portion of Universal Service Fund (USF) would create level playing field and broaden the pool’s funding base, Verizon Regulatory Affairs Dir. Scott Randolph told FCC in ex parte filing July 2. Randolph’s letter came after reply comments deadline for broadband wireline proceeding at FCC July 1, in which some cable operators expressed opposition to Verizon’s proposal.
There appeared to be little agreement among regulators or witnesses Fri. at FCC en banc hearing on how to fix current universal service system, whether it needed major overhaul or tweaking and, for that matter, whether it needed fixing at all. FCC scheduled hearing and invited state members of Federal-State Joint Board on Universal Service as best way “to gain input in the shortest time on various views and proposals for reform,” FCC Comr. Abernathy said as she opened hearing. Asked by Comr. Copps if there really was sense of urgency, consultant Kathleen Wallman said that was one of “the first assessments” Joint Board would have to make. “I don’t know if there is a sense of urgency on the part of all parties,” she said. “Some participants may disagree.” Wash. State U. Prof. William Gillis said he didn’t think there was consensus on urgency of reforming universal service because some parties would benefit more from change than others.
FCC is expected today (June 13) to take action on AT&T request that it apply unused e-rate funds to reduce universal service fund (USF) assessment on long distance carriers. Commission has scheduled vote on unused funds issue at agenda meeting, although it hasn’t indicated how vote will go. AT&T Vp Robert Quinn acknowledged that company had urged agency to take such action. He said AT&T first made proposal in March in response to FCC request for comment on what to do about $950 million in unused e-rate funds. Company stepped up its lobbying recently after Universal Service Administrative Co. (USAC) announced it would have to raise USF assessment to 8.77% of interstate revenue, up from 7.28%. Quinn said that would translate to further increase in 11.5% USF fee now charged to its customers to cover assessments. Customer fee is higher than percent paid by AT&T because of company’s continuing problem of declining revenue. Fee charged to AT&T is based on level of revenue 6 months earlier. By time AT&T makes contributions, its revenue is lower than that, meaning fees to customers have to be raised to get amount of money required. Quinn said AT&T also stepped up action because time had run out for action on waiver request to help ease revenue problem by letting AT&T base contributions on estimates of future revenue, rather than 6-month-old revenue. New assessments go into effect July 1. He said AT&T separately had asked FCC for longer term fix for declining revenue problem, such as basing contributions on number of lines rather than revenue. Quinn said problem appeared to be more acute for AT&T than some companies. Companies such as Verizon that are just entering long distance business have increasing revenue, he said. Some carriers have opposed AT&T’s initiative for fear it will muddy larger contribution reform issue. Meanwhile, FCC set 1 p.m. June 21 meeting to explore broader issue of whether to change USF contribution methodology. Agency late Wed. said it wanted “additional input from industry and other affected parties” on proposals to reform contribution system. Commission said it invited state members of Federal-State Joint Board on Universal Service to join in presiding over meeting.
Alaska Regulatory Commission (ARC) Chmn. Nan Thompson warned state’s lawmakers that failure to reauthorize her agency could endanger federal universal service funding that supported rural telecom service. In letter to legislature, Thompson said if there were no state commission, there would be no agency to handle annual universal service certifications required by FCC. Federal universal service fund (USF) rules require state commissions to make annual certification that USF money is being used for intended purposes. as prerequisite for continued federal support. Agency recently filed certification for 2002 and probably would be able to perform duty for 2003, but after that there would be no entity to ensure that state’s rural telecom carriers continued to receive the $70 million in annual USF support that now flows to Alaska. She said there would be other adverse consequences to Alaska’s economy, state budget and all regulated utilities if ARC weren’t renewed. She said “regulatory and legal confusion” surrounding dying ARC would undermine efforts by state’s telecom, electric, gas, pipeline, water and sewer companies to obtain financing for new projects. Legislature in regular and first special session was unable to break political barrier raised by key Senate Republicans that had blocked ARC reauthorization. Agency isn’t due to die until June 30, 2003, but Thompson warned that it must start curtailing its activities July 1 unless renewed. Legislature will try again to settle ARC issue in 2nd special session that’s due to convene June 24.
GAO report shows Universal Service Fund (USF) should be updated to take into consideration new technology such as IP telephony, Rep. Markey (D-Mass.), ranking minority member of House Telecom Subcommittee, said Mon. Report, requested by Markey, said IP telephony wasn’t widespread yet but eventually “could affect the revenue base from which universal service programs are funded.” Under current regulatory structure, providers of IP voice services don’t have to contribute to USF, GAO said. “As these new voice services gain popularity, concerns exist of whether federal funding levels for universal service might eventually decline,” GAO said: “In addition, there is much debate about whether the current federal regulatory framework for funding universal service -- with its reliance on interstate telecommunications revenues -- is appropriate for digital communications, where voice, video and data are carried in the same manner over networks that lack intrastate/interstate designations.” Report was based on views of state and federal govt. officials, academics and industry officials. GAO also reviewed local telephone rates provided by state PUCs, which Markey said revealed wide disparity in prices across country. He said wide differences were found among rural telephone companies’ rates as well as between rural and urban telco rates.