A coalition of international long-distance companies urged an end to what they called discriminatory universal- service obligations. In a petition Thursday, the Ad Hoc Coalition of International Telecommunications Companies asked the FCC for two declaratory rulings. As international long distance companies, the Ad Hoc members are considered de minimis providers exempt from direct USF contribution. But many “currently face discriminatory, indirect USF obligations resulting from pass-through charges from their underlying carriers,” the coalition said. The FCC should rule that de minimis providers can choose whether to have the underlying carrier pass through surcharges or pay contributions directly, even if they're less than $10,000, the coalition said. In addition, the coalition seeks a ruling to curb USF discrimination against prepaid calling-card providers, it said. An FCC requirement to report distributor revenue as end-user revenue and at face value “fails to take into account common prepaid calling card distribution methodologies and contradicts fundamentals of Generally Accepted Accounting Principals,” the coalition said. The FCC should rule that distributor revenue is not end-user revenue, and allow calling card providers to report actual receipts from distributors, it said. Alternatively, the FCC should start a rulemaking on the issues raised in the petition, the coalition said.
Michael Copps wants to “cultivate predictability” by making “fact-based” decisions with information gathered “neutrally” by career FCC staffers, he said at his first news conference as acting chairman. He said the commissioners will be included by meeting more often with bureau staffers and by getting options memos, drafts of orders and other documents about the time he does. The changes have started with more-frequent meetings and with commissioners getting items ahead of time (CD Feb 11 p3), FCC officials said. But Copps said change will take time and he hasn’t finished culling lists of long-pending items that bureaus gave him at his request so he can decide what to dispose of.
The economy, wireless consumer standards, universal service and FCC reform lead the agenda for NARUC committee meetings next week in Washington, D.C. A panel on broadband stimulus will feature Verizon Executive Vice President Tom Tauke. Other panels will feature congressional staffers, state regulators and executives. Former FCC Commissioner Deborah Tate will be among panelists on FCC reform. The Feb. 15-18 meeting will be at the Renaissance Washington Hotel.
Small incumbent local exchange carriers should be able to receive more local switching support when they lose a significant number of access lines, said a group of rural carrier associations in a letter to the FCC. The letter, which backed a petition by the Coalition for Equity in Switching Support, was signed by the National Exchange Carrier Association, the Independent Telephone & Telecommunications Alliance, the National Telecommunications Cooperative Association, the Western Telecommunications Alliance and the Organization for Promotion & Advancement of Small Telecommunications Companies. Under FCC rules, a small ILEC’s LSS support is reduced when its number of access lines climbs above a dial equipment minute weight threshold. However, the reverse is not true, they said: a small ILEC won’t get more support if its access line count falls below the threshold. Changing the rule will expand the universal service fund by about $11.7 million, the rural groups estimated. “This amount is less than 0.2 percent of the $6.95 billion USF, and therefore granting the request for clarification would not have a perceptible impact on the overall Fund.”
The FCC is expected to jump back into revamping the USF and intercarrier compensation regimes as early as summer, if as expected, Julius Genachowski is appointed and clears the Senate to become the chairman in the next few months, officials said. With the analog TV cutoff postponed, it’s unclear what the commission will deal with at its meetings from March to May.
The FCC should reverse two findings by the Universal Service Administrative Co. in an audit of Madison River Communications, said Level 3 and two other competitive local exchange carriers. In comments last week on a petition for review, no one took USAC’s side. USAC had determined that Madison River owes universal service fund and Telecommunications Relay Service fund contribution payments on intrastate T-1 revenue received from customers during 2005, because the company couldn’t prove the revenue was intrastate. But under FCC rules, Madison’s circuits are assumed to be intrastate unless the company certifies otherwise, said Level 3 and Paetec. “USAC’s view … represents an unprecedented ‘land grab’ of state regulatory authority that would have severe consequences for states, the industry, and consumers,” they said. Madison River also challenged a USAC determination that it should have reported the transmission portion of its Internet access services separately as assessable telecommunications service revenue. Madison River shouldn’t owe USF money for its transmission components in 2005 because at the time the FCC considered wireline broadband Internet access an information service not subject to USF assessment, Level 3 and Paetec said. Also, they said, “wireline broadband Internet services that are single, integrated service offerings -- as compared to bundled packages of stand-alone telecommunications and information services -- have never been subject to USF assessment.”
The universal service program would get a permanent exemption from Anti-Deficiency Act rules under a bill (S-348) introduced Thursday by Sens. Jay Rockefeller, D-W.Va., and Olympia Snowe, R-Maine. Congress has approved annual exemptions from the accounting rules that prohibit government programs from authorizing expenditure of money they don’t have on hand, even if revenue is anticipated at a future date. Congress has approved annual exemptions from ADA for the USF program, but efforts to pass a permanent exemption haven’t been successful. It’s time to give a permanent exemption for the USF program, said Rockefeller, chairman of the Senate Commerce Committee, in a floor speech accompanying the bill’s introduction. “It is essential for all of the universal service programs to operate in a timely manner.”
FCC Commissioner Robert McDowell, the FCC’s lone Republican, weighed in Tuesday with additional recommendations for FCC reform, starting with a “thorough operational, financial and ethics audit” of the agency. McDowell acknowledged, as interim Chairman Michael Copps and Commissioner Jonathan Adelstein did Monday, the need for basic change now that former Chairman Kevin Martin has left the commission.
Former FCC Chairman Kevin Martin, who left the commission Tuesday, lists the failure of the D-block auction, the FCC’s inability to drive down cable prices and the absence of agreement on USF and intercarrier compensation revamps as his biggest regrets. Martin, in one of his last interviews as chairman, said he’s not certain how he’s seen by most of those the FCC regulates, but hopes he’s regarded as fair in making decisions. “I hope that they would say that I actually looked at the underlying facts of the issues that were brought before us -- that I gave everybody an opportunity to be heard, but then made a decision based on the facts that were brought, as opposed to just what their political philosophy was.”
The FCC could face a court deadline to respond to a 2005 remand on its Universal Service Fund high-cost rules. In a petition for writ of mandamus filed Wednesday, Qwest and three state regulators urged the Denver-based 10th U.S. Circuit Court of Appeals to force the FCC to respond within 90 days of the writ’s release. Qwest, the Maine Public Utilities Commission, Vermont Public Service Board, and the Wyoming Public Service Commission said the FCC unreasonably delayed issuing new rules for its non-rural, high-cost fund, ignoring mandates from Congress and the 10th Circuit.