A federal court Fri. vacated part of an FCC order under which VoIP providers must contribute to the Universal Service Fund (USF). A 3-judge panel of the U.S. Appeals Court, D.C., said it found “the Commission’s explanation wanting as to the pre-approval of traffic studies and the suspension of the carrier’s carrier rule.” Judges Harry Edwards, David Tatel and Merrick Garland heard the case brought by Vonage and CCIA (CD Feb 12 p1), with Tatel writing the opinion.
The FCC should create a pilot program that pays for broadband deployment in rural areas with “a specified amount of funding, such as $1 billion per year,” AT&T recommended Thurs. in comments on Universal Service Fund (USF) reform. A 2nd program could provide money for mobile wireless service in those areas, the company said. “Rather than attempting to use the current federal high cost [USF] mechanism to achieve its broadband deployment objectives, the Commission must approach the problem head-on,” AT&T wrote.
Capping universal service support to competitive eligible telecom carriers (CETCs) may be seen now as an interim measure but easily could become the norm, Rep. Allen (D-Me.) told FCC commissioners in a May 22 letter opposing the proposal. “My worry is that this action will act as a pressure valve and decrease the urgency for broader reform,” Allen said. Me. has 2 wireless ETCs “that have productively used universal service funds to expand service to remote areas in our largely rural state,” Allen said: “It is not fair that residents in rural Maine should lose the access to modern telecommunications services under a one-size-fits-all cap.” Comments to the FCC on capping Universal Service Fund (USF) subsidies to CETCs are June 6, replies June 13. The Federal-State Joint Board on Universal Service recommended the cap. The comment deadlines awaited Wed. Federal Register publication of a notice of proposed rulemaking based on the joint board proposal (CD May 15 p9).
N.Y. residents would pay $150 million more into the Universal Service Fund (USF) if the contributions system is changed as proposed, consumer groups said Tues. Contributions are made by telecom providers, which charge consumers for them. Plans to shift from a revenue-based payment to a per-connection charge, such as one based on phone numbers, would boost N.Y.’s share from $407 million to $555 million, said the League of United Latin American Citizens, N.Y. State Alliance for Retired Americans and the Keep Universal Service Fund Fair Coalition. The connections- based proposal would “take a bad situation and make it even worse” because New Yorkers already pay more into the fund than they get back, the groups said in a press teleconference. Accusing “big phone companies” of pushing the connections system, the groups said the FCC shouldn’t move from “a consumer-friendly, pay-for-what-you-use tax on long-distance to a regressive per-connection charge that would be imposed on every phone line whether or not consumers made any long distance calls at all.”
The Mont. PSC is eyeing retail or wholesale rate cuts for Qwest to ensure its ratepayers benefit from sharp increases in the company’s federal universal service subsidies the last 10 years. In 2005 the PSC opened an inquiry on Qwest’s use of universal service high-cost support funds (Case D2005.6.105). In the latest docket report, the PSC said Qwest’s annual universal service subsidy jumped from $1.3 million in 1996 to $16 million yearly for 2004-06. Qwest said universal service subsidies go to add, upgrade and maintain network facilities in its high-cost areas; the PSC noted Qwest’s gross network investment statewide fell from $52.6 million in 1996 to $24.6 million in 2005. The PSC said Qwest’s gross construction cost has fallen more than 50% since 1996, as its universal service subsidies “have increased dramatically.” Qwest said universal service support doesn’t offset its rural network construction expenses so its rates should stay the same. But the PSC said that while there’s no evidence Qwest improperly uses universal service subsidies, “it is difficult to pinpoint exactly where the USF money is going,” or verify that Mont. customers get maximum benefit from the subsidies. The PSC said it may order direct ratepayer benefits of $8-$10 million via a cut in basic exchange rates, killing Qwest’s monthly extended area calling surcharge, or implement MCI’s proposal to cut Qwest intrastate access charges. The PSC hired a consultant to study these and other alternatives for using Qwest’s universal service revenue to benefit ratepayers. The consultant’s report is due June 12; Qwest’s response, July 19. Data requests must be completed by Aug. 30, and hearings will open Sept. 26.
The FCC should adopt multi-tiered standards for what it deems broadband and consider varying standards for different technologies, CTIA said in comments. The group was weighing in on an FCC inquiry’s questions on how to define broadband in a changing marketplace and on how to speed deployment. CTIA stressed that wireless may not offer the same speeds as wireline but is still broadband and should be so classified. The FCC issued a Notice of Inquiry (NOI) last month, asking for comments to help it write the 5th Sec. 706 report to Congress on broadband deployment, as required by the Telecom Act (CD April 17 p1).
Rep. Boucher (D-Va.) asked OPASTCO to promote his Universal Service Fund (USF) bill (HR-2054) on the Hill Wed. at the group’s legislative conference. The measure would revamp the USF program by widening the contribution base to include all those providing network connections, and expand services to pay for broadband. “We are in a hypercompetitive global market,” Boucher told OPASTCO members, stressing the importance of getting faster broadband deployment throughout the country, especially in rural areas. USF is under stress “today as never before,” Boucher said, adding that he and the bill’s chief co-sponsor, Rep. Terry (R-Neb.), have worked 3 years on “comprehensive” legislation to deal with problems in the system. Boucher’s bill has 11 co-sponsors, all but one Republicans. It has attracted support from AT&T, Qwest, Embarq and Alltel and NTCA, Boucher said, and the challenge is to encourage trade groups that like the bill to urge other lawmakers to sign up. “This bill will not be passed into law without your personal assistance,” Boucher told OPASTCO members. OPASTCO Pres. John Rose said the group applauds the bill but thinks it wise to pursue regulatory as well as legislative fixes.
FCC Chmn. Kevin Martin plans to proceed as soon as the fall on a proposal to change how telecom providers contribute to the Universal Service Fund, he said Mon. after a speech. Martin told reporters he is waiting for a U.S. Appeals Court, D.C., decision on a related universal service issue before teeing up a proposal to replace the revenue-based contribution system with one relying on phone numbers.
FCC Chmn. Martin backs “exploring” inclusion of broadband in the high-cost Universal Service Fund (USF), he said in a letter to House Telecom Subcommittee Chmn. Markey (D-Mass.). Martin declined to answer Markey’s April 2 query (CD April 3 p7) as to whether Martin favors using USF subsidies for broadband -- a strategy explored in several legislative proposals on Capital Hill.
As expected, the FCC issued a call for comments on the recommendation by the Federal-State Joint Board on Universal Service for an interim cap on USF subsidies to “competitive eligible telecom carriers” (CETCs), which generally are wireless providers (CD May 2 p1). The agency said comments would be due 14 days after the notice of proposed rulemaking is published in the Federal Register, and replies 7 days after that. The FCC asked for comments on a variety of issues, including “whether there are public interest concerns” about limiting the cap to CETCs. Parties that disagree with the recommended year’s duration for the cap should explain why, the FCC said. “We also seek comment on the Joint Board’s recommendation to impose the cap on a state-by-state basis, including how this would affect the state ETC designation process,” the NPRM said: “Parties should also address whether the cap should be set at the level of support received by competitive ETCs in 2006, as the Joint Board recommended, or some other level.”