Senate Communications Subcommittee Chmn. Burns (R-Mont.) said the FCC should act more quickly in addressing universal service fund (USF) issues. “We have a situation that requires a deadline,” Burns said. “It’s time they move.” Burns is floating a staff draft of a bill that would open intrastate telecom traffic to USF requirements and would place a deadline on the FCC to finish a proceeding on contribution methods to the USF. The bill comes as the Senate Commerce Committee prepares to conduct its 2nd hearing of the session on USF today (Thurs.). The hearing will be in the Russell Bldg. Rm. 253 at 10 a.m and feature FCC Chmn. Powell as a witness. Neb. PUC Comr. Anne Boyle said she understands Powell will testify in favor of opening intrastate telephone lines for USF revenue. Boyle said she and FCC Comr. Martin are opposed to allowing intrastate revenue collection for USF. Boyle said the Burns bill was an “incomplete” attempt to fix USF because it only addresses contributions and not how the USF fund is distributed. She said it was an attempt to bolster the fund through intrastate fees and that “all governors should be alarmed.” Boyle also said legislation should create a system for telecom carriers receiving USF to be audited. Boyle said NARUC hasn’t taken a position on intrastate USF funding. Boyle is a member of the NARUC Telecom & Consumer Affairs committee, as well as a board member.
Senate Communications Subcommittee Chmn. Burns (R-Mont.) is circulating draft legislation to reform the contribution methodology of the universal service fund (USF). The bill would: (1) Allow the FCC to collect USF support on intrastate telephony traffic. (2) Impose a deadline on the Commission to finish its open proceeding on USF collection methods. Industry sources familiar with the bill said it was likely to be a prominent topic at the Senate Commerce Committee hearing on USF scheduled for Thurs.
States and municipalities are expressing concern that legislation designed to prevent taxes on access to Internet service eventually could restrict local govt. regulation of telephony and cable service. NARUC, the National Governors Assn. (NGA), National Assn. of Telecom Officers & Advisors (NATOA) and the TeleCommUninty Alliance (TCUA) are among the local interests expressing concern about S-150, the proposed Internet Tax Non-Discrimination Act.
Reps. Terry (R-Neb.) and Stupak (D-Mich.) chastised the FCC for failing to significantly reform a provision of the universal service fund (USF) Thurs. (CD Oct 17 p4). In response to a 10th U.S. Appeals Court, Denver, ruling, the FCC directed state regulators to compare rural rates with urban rates and sought comments on rate reviews. The “nonrural” fund -- $234 million for Bells and other large ILECs to serve rural customers -- has come under criticism because only states receive any funding, much of which goes to BellSouth. Miss. gets the lion’s share with $120 million. Terry and Stupak are the principal sponsors of legislation (HR-1582) designed to reform the distribution formula to be based on wire centers rather than statewide averages, which supporters say would spread the fund more evenly. “When given an opportunity to fix one of the most unfair and poorly targeted programs in the federal government, the FCC took a pass,” Terry said. “By turning a deaf ear to the public outcry, they've put the ball in our court and we're going to act.” Sen. Smith (R-Ore.) has sponsored a similar bill (S- 1380).
The Kan. Corporation Commission approved a negotiated agreement between SBC and CLEC Sage Telecom on the level of support Sage would receive from the state universal service fund for customers in high-cost areas served via UNEs. The issue had threatened to delay Sage’s designation as an eligible telecom carrier (ETC) entitled to receive universal service subsidies. Sage had wanted to receive the same per- line support SBC did, but SBC objected. Under the approved agreement, Sage will get state USF support equal to the lesser of the UNE price it pays and the per-line subsidy SBC receives.
LAS VEGAS -- FCC Comr. Martin is “troubled” by the concept of substituting wireless for wireline in universal service situations, he said at the USTA convention here Tues., citing particular concerns about wireless’ ability to provide adequate E911 and separate powering. NTIA ex-Dir. Nancy Victory, meanwhile, said the Universal Service Fund (USF) needed an “extreme makeover.”
ORLANDO -- Cooperation within the competitive telecom industry is needed to win regulatory wars, many said at the CompTel trade show here last week. “The lesson to be learned” from the results of the FCC’s Triennial Review Order (TRO) is that “we need to create a public policy debate that clears” CLECs’ views, Covad Vp-Govt. & Internal Affairs Susan Davis said. She said the TELRIC procedure recently initiated by the Commission showed “that if you say something long enough people will start to believe it.”
Some Western state political entities are trying to drum up support for legislation they say would more fairly distribute a portion of the Universal Service Fund (USF). But neutral observers said the USF fight was turning into one of regions -- mainly Qwest states vs. the BellSouth region -- with few others anxious to join the fight. One industry source described it as a USF “civil war” between Qwest and BellSouth.
Hispanic members of Congress urged Senate Commerce Committee Chmn. McCain (R-Ariz.) not to support S-1380, the Rural Universal Service Equity Act, because of the effects it could have on Puerto Rico. The members said it would threaten $56 million in funding for P.R. Signers of the Sept. 24 letter included: Reps. Acevedo-Villa (D-P.R.), Menendez (D-N.J.), Beccera (D-Cal.), Rodriguez (D-Tex.). S- 1380, sponsored by Sen. Smith (R-Ore.), would create a new formula for calculating distribution of the Universal Service Fund non-rural high-cost fund, which is primarily distributed to Bells and large ILECs. The fund has been controversial because only 8 states receive money from that fund, with the largest amount going to Miss. A similar bill (HR-1582) was introduced in the House by Rep. Terry (R-Neb.). The letter said this change, along with the 1999 FCC decision to alter financial calculations for P.R. resulting in a loss of $40 million in annual support, would “be devastating for Puerto Rican families and businesses.” “Without this support, long- distance rates to and from Puerto Rico will continue to increase, thus creating further economic hardships not only for those living in Puerto Rico but also for their friends and families throughout the Unites States,” the letter said. The letter said a “piecemeal” change to USF, instead of a comprehensive overhaul, would only hurt some states. Dale Curtis, of the Coalition for Equitable & Affordable Rural Service (CLEAR), said there are nearly 3 million Hispanics in the U.S. who don’t benefit from this program as it’s now structured. CLEAR supports the passage of both the Terry and Smith bill. Curtis also said the bill has “hold harmless” clauses that prevent the funding from being drastically reduced to any state or territory. Both the Latino Coalition and the Hispanic Business Roundtable are members of the CLEAR Coalition.
The FCC proposed an $806,861 fine against Globcom, a Northbrook, Ill., long distance reseller, for not making Universal Service Fund (USF) and Telecom Relay Service (TRS) contributions. The Commission said Tues. that Globcom owed $700,000 to the USF as of Aug. and hadn’t satisfied its obligation to contribute to the TRS Fund, which helps people with hearing or speech disabilities use the telephone system. The agency said Globcom apparently underreported its revenue to the Commission “and at times failed to report revenue information at all.” That information is used by the FCC to calculate carriers’ USF and TRS payments. The FCC Enforcement Bureau said this is the largest fine ever proposed for such violations and FCC Chmn. Powell said it’s “an important step in preserving the integrity of the Universal Service Fund by sending a signal to carriers who shirk their duty to pay their fair share.” The agency said it increased the normal level of fines because “it appears that Globcom deliberately chose not to pay its universal service contributions each month for revenues derived from January 1, 2001, to the present.” The Commission said that despite “numerous monthly communications” from the Universal Service Administrative Co. (USAC), Globcom had “done nothing to address this matter.” It also ordered Globcom to submit a report in 30 days outlining its plans for coming into compliance with the rules. Globcom can seek a reduction or cancellation of the fine in that 30-day period but the agency warned it wouldn’t take inability to pay as an excuse without federal tax returns, financial statements or other objective documentation.