The hiring of Ray Baum to the House Commerce Committee could signal heightened Capitol Hill interest in pursuing Universal Service Fund reform this year, state and industry officials said. Baum was chairman of the Oregon Public Utilities Commission and the state chairman of the Federal-State Joint Board on Universal Service. Some wireline industry lobbyists said they believe Baum may try to revamp the bill worked out last year by Rep. Lee Terry, R-Neb., and former Communications Subcommittee Chairman Rick Boucher, D-Va.
Key parts of the National Broadband Plan still require action by Congress. A potential roadblock for the commission as it implements the plan remains that the commission cannot control if or how quickly Capitol Hill moves forward on its parts.
The FCC will take back high-cost universal service money given up by eligible telecommunications carriers and reduce the caps in the states where the relinquishing telcos had been operating, the commission said in an order published late Thursday. The commission said redistributing the forgone cash to competitors wouldn’t necessarily help deploy high-speed broadband and “could simply subsidize duplicative voice service.” The order (dockets 05-337 and 96-45) paves the way for commission to offer direct USF subsidies for broadband. It takes effect immediately.
ILEC revenue shrank from more than $108 billion to nearly $90 billion in the decade between 1998 and 2008, the FCC said in its annual universal service monitoring report. The report, published Thursday at docket no. 98-102, also found that wireless revenues leapt from more than $37 billion in 1998 to more than $128 billion over the same period. ILECs’ competitors saw their revenue jump from more than $4 billion in 1998 to more than $26 billion in 2008, the USF report said. Pay phone companies, meanwhile, saw their revenue drop from more than $1.1 billion in 1998 to $275 million in 2008, Thursday’s report said. Pay phone companies have asked the FCC for an emergency injection of some $60 billion in USF cash to “stop the bleeding” (CD Dec6 p6). It was the 14th in a series of reports for the Joint Board on Universal Service.
The FCC has fallen months behind its aggressive schedule for issuing follow-up orders to the National Broadband Plan. By the FCC’s latest count, 21 of 68 action items set up by the report remain incomplete. The agency has made “incremental progress” on two others, an agency spokesman said Friday. Two items which were scheduled to be wrapped up by the end of June remain on the FCC’s to-do list. Critics of the net neutrality order approved by the agency Dec. 21, including Republican Commissioners Robert McDowell and Meredith Baker, say the agency’s months’ long focus on that order is in part responsible for sometimes slow progress implementing the plan.
A top state telecom official will join the House Commerce Committee staff, incoming Chairman Fred Upton, R-Mich., said Wednesday. Ray Baum, chairman of the Oregon Public Utilities Commission and the National Association of Regulatory Utility Commissioners Telecom Committee, will be senior policy adviser for the Communications Subcommittee under Rep. Greg Walden, R-Ore. Meanwhile, Neil Fried -- who was senior minority counsel under Ranking Member Joe Barton, R-Texas -- will stay on the committee as chief counsel of the Communications Subcommittee. As state chair of the Federal-State Joint Board on Universal Service, Baum had been active in efforts to revamp the Universal Service Fund. Rep. Lee Terry, R-Neb., the incoming vice chairman of the Communications Subcommittee, has said he will reintroduce USF legislation early in the session (CD Nov 23 p5). Baum is leaving NARUC and the Oregon PUC, a NARUC spokesman confirmed: “He will be greatly missed, but we wish him the best.”
Verizon Wireless used Alltel’s license to obtain high-cost Universal Service Fund support without getting permission from state regulators, U.S. Cellular, Allied Wireless, Commnet Wireless, and Viaero Wireless said in an ex parte filing published Tuesday. The wireless companies said “the core issue is whether Verizon Wireless was ever properly designated by state authorities” and that using Alltel’s high-cost support caused “ongoing harm … by driving up statewide support levels, causing steep reductions under the cap.” The high-cost issue involves tens of millions, if not hundreds of millions of dollars, in USF support, one industry official said.
A group of small wireless carriers asked the FCC to reject a TracFone petition seeking new rules for eligible telecommunications carriers (ETCs) under the Link-Up program. The Competitive ETC coalition accused TracFone of seeking a competitive advantage. TracFone, which provides pre-paid wireless service, asked the FCC for a ruling that ETCs may not receive support for providing Link-Up benefits unless they routinely charge customers for commencing service, and may not expand services they offer under the program to wireless service without obtaining approval from the proper authority.
A continuing resolution approved Tuesday by the Senate includes broadband oversight money sought by the NTIA. It also prevents a spike in Universal Service Fund contributions by extending an exemption of the USF from a Civil War-era law. The resolution keeps the government running until March 4. The drama over broadband funding and the last-minute, temporary nature of the fix raised concerns about whether the Broadband Technology Opportunities Program can work long term.
The Universal Service Administrative Co. overestimated “improper” payments for high-cost universal service by almost 700 percent, it acknowledged in a follow-up audit. A November 2008 report by the FCC’s inspector general found about $472 million in improper payments. The actual amount was $54.5 million, USAC said.