ILECs were pushing for “significant price increases” in negotiations with CLECs over UNE-P, a CLEC executive and representative of ALTS told the Senate Commerce Committee Tues. The increases “would not allow us to sustain our business,” said Cbeyond CEO James Geiger at the hearing on “lessons learned” from the Telecom Act: “The assumption of the incumbent is that unbundling elements are gone.” Geiger also suggested that ILECs weren’t even putting the local loop on the table, though Qwest Chmn. Richard Notebaert said he didn’t object to loops’ remaining an unbundled element.
Hours before the Senate took up legislation seeking to ban Internet access taxes, President Bush promoted the ban as a way to stimulate broadband deployment (see separate story, this issue). The Senate late Mon. was prepared to take a procedural vote as the first step toward consideration of S- 150 by Sen. Allen (R-Va.). S-150’s main opponent, Sen. Alexander (R-Tenn.), said Senate Majority Leader Frist (R- Tenn.) has been urging compromise for months, but said talks appeared to have failed: “We simply have a difference of opinion.”
A variety of consumer groups launched a campaign Thurs. to work for retention of the revenue-based Universal Service Fund (USF) collection system. The Keep Universal Service Fair Coalition, made up of senior, disability, consumer, minority and rural organizations, said moving to a flat, connections-based system would harm consumers and low-volume users. Connections-based systems would collect money through a subscriber line or per-user fee, which would mean low- volume users would “pay the same amount in USF fees as high- volume users.” The coalition includes 12 organizations such as the Alliance for Public Technology, Alliance for Retired Americans, American Assn. of People with Disabilities, Black Leadership Forum, Gray Panthers.
The National Telecom Cooperative Assn. (NTCA) raised concerns with Sen. Sununu (R-N.H.) about his VoIP legislation (S-2281), pointing out that VoIP services would have a competitive advantage over traditional phone carriers. NTCA, which mainly represents rural local phone carriers, wrote Sununu Mon. to present 4 primary concerns with the bill: (1) The exemption from access charges that VoIP would get could cripple rural carriers. NTCA said a recent survey showed a “bill and keep” regime as proposed in the bill would cost rural carriers $2 billion annually. “The bill also encourages private negotiations for access compensation, which is an approach that has not worked in the past and has resulted in the loss of millions of dollars in rural carrier cost recovery from the wireless industry,” the letter said. (2) Universal service fund (USF) burdens would be shifted towards rural carriers, because the bill proposes a connections-based USF contribution methodology. “The impact of the flat-fee nature of this approach would be particularly harsh on low-volume users such as rural and elderly residential consumers,” the letter said. (3) VoIP providers would have the same requirements to open their networks to law enforcement as “information service providers.” “Yet, the law enforcement community is not certain it has the statutory authority to require information service providers to comply with such laws,” the letter said: “This would provide such carriers with a competitive advantage over incumbent carriers.” (4) An exemption of VoIP from state and local tax would also prove to be problematic because it “offers VoIP providers a competitive advantage over ILECs that currently do pay state and local taxes on their voice service.”
A “call for clarity” is the motivation behind VoIP legislation introduced Fri., Sen. Sununu (R-N.H.) said. Sununu announced targeted legislation designed to free VoIP from much of the regulation now applied to the legacy phone networks. House Commerce Committee Vice Chmn. Pickering (R- Miss.) said he would introduce similar -- but not identical -- legislation on the House side. Pickering said it was important to free VoIP from over-regulation because the technology would be a driver for broadband deployment.
Cingular Interactive (CI) filed an application for review last week of the Universal Service Administrative Co.’s (USAC) assessment of universal service fund (USF) contributions from CI. In a filing at the FCC, CI said it owes no past due USF contributions: “The only services CI provided during the time period for which USAC has sent invoices claiming USF contributions are information services, which are not subject to USF contribution requirements,” CI told the FCC. The company said it reported to the USAC in 2002 its services had been reclassified as information services. “The reclassification was based on the FCC’s evolving interpretation of the difference between information services and telecommunications services,” CI said. In part, CI argued USAC lacks authority to make a determination that it is providing telecom services, contending only the FCC can reverse “existing precedent.” CI said the FCC’s Wireline Bureau can take corrective action on the USAC decisions under delegated authority. “CI"s services could be found to constitute telecommunications services only by adopting new policies and overruling or departing from the Commission’s authoritative case law, which cannot be accomplished under delegated authority,” CI said. If a decision that favors Cingular isn’t handed down, CI said it wants the petition to be referred to the full Commission.
Rural telephone company executives at a convention in Washington applauded loudly Mon. when FCC Comr. Adelstein promised he would fight to defeat a proposal to limit universal service funding to one “primary” line. “I hope it’s dead on arrival at the FCC,” Adelstein said of the proposal by the Federal-State Joint Board on Universal Service. Limits on universal service funding would put consumers in rural areas “at a disadvantage,” he told the National Telecom Co-op Assn. (NTCA). Such limits would “undercut investment in rural America,” he said.
SAN FRANCISCO -- The FCC’s VoIP rulemaking probably will go on a fast track, an FCC Wireline Bureau official said here Thurs. “I suspect that we will try to get more clarity out there faster than not,” Senior Deputy Bureau Chief Jeffrey Carlisle told Law Seminars International’s Voice over IP conference.
Sprint acknowledged to the FCC it had moved more traffic to its IP backbone to reduce access charge costs, but it took exception to SBC’s characterization of the amount of traffic moved. In a March 3 ex parte filing, Sprint said SBC claimed it had studied a sample and found 40% of Sprint’s traffic had been moved. Sprint said it “has indeed increased its use of such arrangements out of competitive necessity (and will continue to do so as long as such practice is legally permissible and financially rational) but hardly to the extent and at the speed posited by SBC.” Sprint told the agency: “Until the Commission issues an explicit finding that access charges do apply to this type of traffic, voice service providers will have an enormous economic incentive to greatly expand their use of alternative termination arrangements simply to remain competitive with one another in terms of access costs, and disputes regarding the applicability of access charges for VoIP traffic, and whether revenues associated with such traffic are subject to mandatory contributions to the USF, will continue to escalate.”
Newly anointed House Commerce Committee Chmn. Barton (R- Tex.) reiterated his support for the “Tauzin-Dingell” method of telecom deregulation, noting that he was a co-sponsor of the bill in the 107th Congress. Asked if Tauzin-Dingell was essentially dead since the FCC has enacted some of the bill’s provisions, Barton said the philosophy behind Tauzin-Dingell hasn’t died. Barton has said the Telecom Act of 1996 will need to be reformed in the upcoming 109th Congress, as has Senate Appropriations Chmn. Stevens (R-Alaska), who will likely become Senate Commerce Committee Chmn. next year. Barton said the U.S. was falling behind other countries -- Korea, Japan, Western Europe -- in broadband deployment, and the govt. should look for ways to accelerate the rollout of high-speed Internet access. However, Barton has named Rep. Pickering (R-Miss.), an opponent of the Tauzin-Dingell approach, to be the Committee vice-chmn. Pickering said when evaluating the Telecom Act, the Committee will take into account many factors, including VoIP, the universal service fund (USF) and spectrum reform. Pickering said the Committee should look to “maintain competition and choices” when reforming telecom law. Barton was careful not to commit to any changes in telecom policy, noting that the Committee hadn’t yet been through the hearing process that he said is needed to educate members on the state of the industry. Barton said the Committee will have hearings this year on the federal budget and will likely hear testimony from relevant Administration officials, including those from the Commerce Dept. Barton said the Committee will look for ways to streamline the budget of agencies over which the Committee has jurisdiction. The Committee will also continue its investigation into the E-Rate USF fund that provides funds to schools and libraries for telecom services, Investigations Subcommittee Chmn. Greenwood (R-Pa.) said. Barton didn’t say whether he would support the E-rate program, only saying it remains a “controversial” spending mechanism. House Telecom Subcommittee Chmn. Upton (R-Mich.) will remain in his post, and he said Thurs. that the Subcommittee would begin to “lay the framework” for telecom reform this year. He said the Subcommittee will hold a hearing on the Satellite Home Viewer Improvement Act (SHVIA) next week. There were few changes to the Committee structure from that of former Chmn. Tauzin (R- La.). Rep. Hall (R-Tex.), who switched from the Democratic party, will take Barton’s position as chmn. of the Energy Subcommittee. Rep. Shadegg (R-Ariz.) will be the Committee Whip and Rep. Shimkus (R-Ill.) will become the Committee Coalition Dir. Barton said most of the staff would remain in place, save the few who follow Tauzin when he leaves Congress. Barton announced C.H. “Bud” Albright would be the Committee Staff Dir. Albright comes to the Committee from Reliant Resources -- an energy company -- and once was the Committee’s Chief Oversight Counsel. Lawrence Neal will become Deputy Staff Dir. for Communications. Neal spent 20 years in the press office of former Sen. Phil Gramm (R-Tex.) and comes to the Committee from the Census Bureau. Andy Black will be the Deputy Staff Dir. for Policy. Black was on Barton’s Energy Subcommittee and also in the private sector for The Advocacy Group.