The FCC may have punted on contribution overhaul in its Universal Service Fund and intercarrier compensation rulemaking notice (CD Feb 9 p1), but some changes it proposes will lead to increased calls for taking up contributions sooner rather than later, said Bingham telecom lawyer Andy Lipman. The notice, approved 5-0 Tuesday, makes it clear that the commission wants to ease intercarrier compensation payments down, he said. “In part, that’s going to be made up with additional USF funding, which will in turn lead to more pressure on the fund, which in turn will create more pressure for contribution reform.”
Congress has “an obligation to get involved” in overhauling the Universal Service Fund, House Communications Subcommittee Chairman Greg Walden, R-Ore., said after a subcommittee hearing Thursday. (See separate report in this issue.) He said he wants to ensure that USF money goes to places that really need it and that the fund is managed properly. “We've had some very productive discussions with some of our committee members and developed some principles and are working on some further principles,” Walden said. He said Rep. Lee Terry, D-Neb., who last year introduced a USF revamp bill with former Rep. Rick Boucher, D-Va., will play a key role in the discussion. Walden again said there’s no specific date for introducing the Republicans’ planned resolution of disapproval against the FCC net neutrality order, but it will happen after the order appears in the Federal Register.
Sustaining community media and its adoption of multiple communications platforms must be achieved through better infrastructure, cable franchising and other policy priorities, community media leaders said at an event late Wednesday discussing a new report at the New America Foundation. A major threat is the public’s access to distribution infrastructure, said Joshua Breitbart, an analyst for the foundation’s Open Technology Initiative: “That threat necessitates a multi-platform approach to community media.” Public, educational and governmental (PEG) channels are increasingly taking advantage of new technologies and working across other forms of media, including mobile, wireless and cable, he said. “If there are challenges or losses in one platform, there are other opportunities for distribution."
FCC Chairman Julius Genachowski said Universal Service Fund (USF) reform, net neutrality and private investment will help promote future job growth. Speaking Wednesday at an event sponsored by The Atlantic, Genachowski said the FCC is working to promote job creation through private investments by shifting service in a “targeted, efficient way” to transform the USF. He called net neutrality a “sensible step” to promote the Internet job creation and to create more investments through Internet applications and infrastructure. The FCC’s plan to modernize USF is an effort to “make sure we get the most bang for our USF buck.” By removing barriers to speed broadband deployment, he said jobs will be created by the physical buildout of networks like 4G. He said 53,000 jobs will be created to deploy the 40,000 towers needed for next-generation mobile networks. House Commerce Committee Ranking Member Henry Waxman, D-Calif., said he “commends” the FCC’s efforts to reform USF. “The USF program cannot carry out its critical mission because it is outdated and broken. The Fund must be modernized to support broadband networks, reformed to use public dollars wisely, and strengthened to ensure full transparency and accountability,” he said.
States aren’t expected to be squeezed out of the Universal Service Fund system anytime soon and they'll actively engage in the FCC’s USF and Intercarrier Compensation proceeding, Tony Clark, president of the National Association of Regulatory Utilities Commission, said in an interview. The FCC voted Tuesday to issue a broadly worded rulemaking notice to reshape the USF and ICC system (CD Feb 9 p1). The notice has an entire section on the role of states, an FCC official told us.
Critics of Internet regulation called the FTC’s hiring of Tim Wu (CD Feb 9 p12), credited with coining the expression “net neutrality,” an especially untimely signal that the commission will deepen its intervention in online matters. The FTC’s ability to attract prominent academics such as Wu, a professor at Columbia Law School in New York, and Chief Technology Officer Edward Felten, a Princeton University professor of computer science and public affairs, reflects that the commission “is able to take more political risks than the FCC is at this point,” said Prof. Susan Crawford of Cardozo Law School in New York, who led the transition review of the FCC in 2008 and was a White House technology adviser the next year.
The FCC took its first steps toward remaking the Universal Service Fund and the intercarrier compensation system Tuesday with a 5-0 vote in favor of a broadly worded rulemaking notice. The commission also voted to adopt a notice for a separate rulemaking that commission officials said will “streamline its data collection program” and eliminate “unneeded data collections that impose unnecessary burdens on filers.”
Ex-FCC official Blair Levin is singling out Commissioner Robert McDowell in Levin’s efforts to push the Universal Service Fund away from its traditional support for rural, wireline operators. “In his Wall Street Journal editorials and his Commission statements, [McDowell] has stated his fervent commitment to capitalism and free markets,” Levin said on the Innovation Policy Blog. “I was hoping he would take the same analytic view of universal service. After all, our current system of rate of return regulation -- a system born more than a century ago designed to serve a completely different market -- involves using the government’s power to assess consumers to subsidize private companies and insure their permanent profitability, no matter what changes in technology or consumer preferences there are in the market.” It’s hard to know how to characterize the current system, Levin said: “But you can’t call it capitalism or the free market at work.” Levin told us, “Rob McDowell goes into The Wall Street Journal and talks about free markets, free markets, free markets. He has watched millions of dollars be spent and not said anything.” The FCC has to say at some point, “Here’s what the end point looks like,” Levin said. The McDowell office declined to comment Monday since a USF overhaul proposal is on the sunshine agenda for Tuesday’s open meeting.
Congress is unlikely to move quickly on a Universal Service Fund overhaul, industry and FCC officials said. The commission is scheduled to take up Tuesday a broadly worded rulemaking notice on the high-cost fund and the intercarrier compensation system. Chairman Julius Genachowski and his staff made clear Monday that the commission is taking a long view of the revamp, with a senior FCC official calling it “a multiyear project.”
Nevada Attorney General Catherine Cortez Masto is looking into allegations that Verizon improperly obtained high-cost Universal Service Fund support, a spokeswoman for Cortez Masto told us. The attorney general’s office has received a petition by staff at the Nevada Public Utilities Commission urging the FCC to revoke Verizon’s Eligible Telecom Carrier status. The petition accused Verizon of using Alltel’s ETC designation to gain funding for non-legacy Alltel lines. Similar complaints from Verizon rivals were filed in other states like Wisconsin. Verizon dismissed the allegations as “unwarranted,” in an ex parte filing with the FCC, saying it filed “pro forma amendments” that “were fully contemplated by the commission’s orders.”