Citing “devastation inflicted by Hurricane Omar,” Virgin Island Telephone asked the FCC for an emergency waiver of accounting rules that could reduce the company’s high-cost loop support under the Universal Service Fund. While the FCC considers the petition, it should tell the Universal Service Administrative Co. to put any reduction to high-cost subsidies on hold until Feb. 28, the company, Vitelco, said Wednesday in a petition. Vitelco expects to spend $2.5 million through mid-January repairing wireline infrastructure in the Virgin Islands, it said. Unless the FCC waives rules requiring that carriers include net salvage value in USF support calculations, the high plant removal costs combined with “relatively low plant investment over the last several years,” will mean it gets less USF high-cost money, Vitelco said. “This outcome is not appropriate because the negative net plant balance is not the result of an over-recovery of invested capital,” it said. Vitelco’s finances are strained because parent company Innovative Communications is in Chapter 11 bankruptcy, and because the Virgin Islands Public Service Commission is investigating Vitelco’s earnings, the company said. Vitelco expects the investigation to cost it more than $1 million, it said.
The National Telecommunications Cooperative Association rejected another rural carrier association’s proposed edits to FCC Chairman Kevin Martin’s overhaul for intercarrier compensation and the Universal Service Fund. The revised plan, which includes revisions by the Western Telecommunications Alliance and the Organization for the Promotion and Advancement of Small Telecommunications Companies, is one of three proposals currently out for comment. In a Monday letter to the FCC, NTCA shot down five changes, saying they would drive “many rural ILECs … out of business within ten years.” NTCA also condemned Martin’s original plan, saying it would be “a smothering blanket on efforts to extend and maintain broadband to the most rural, high-cost parts of the United States.” NTCA said the FCC should instead “adopt a set of completely new comprehensive [intercarrier compensation] and USF reform measures,” as described previously by NTCA. Formal comments on the three plans are due Nov. 26, with replies Dec. 3. FCC members other than Martin have said they want to vote on an overhaul at the Dec. 18 meeting, but Martin said Tuesday it’s unlikely that will happen (CD Nov 19 p2).
A vote is unlikely on intercarrier compensation and Universal Service Fund overhaul at the FCC’s Dec. 18 meeting, Chairman Kevin Martin told reporters Tuesday after he spoke at a Phoenix Center telecom symposium. But he left open the possibility that the FCC could act while he still is chairman at its January meeting. Martin said the FCC may act in December on rules for the AWS-3 and 700 MHz D-block auctions. He also said Comcast could face fines or other penalties for failing to respond adequately to a request by the commission for information on the policies of cable companies switching to digital (CD Nov 18 p7).
Former FCC Commissioner Harold Furchtgott-Roth counseled future commissioners to “follow the law narrowly” and said “grandiose schemes do not work” during a Tuesday panel discussion at a Phoenix Center telecom symposium. Furchtgott-Roth said before he joined the FCC a “sage” telecom veteran told him telecom law is “infinitely flexible, infinitely elastic” and can be “molded” to fit any objectives. He said he came to disagree completely. “Uncertainty in the implementation of the law does more harm than any possible objective could rationalize,” he said. “Every time the FCC loses in courts it’s not just the FCC that loses, it’s the American consumer that loses. It’s the American investor who loses. Everyone who cares about the telecom sector loses.” Former Commissioner Kathleen Abernathy, appearing on the same panel, said universal broadband deployment raises issues more complicated than most would imagine. “We have seen, for example, with wired in schools through the FCC’s USF program, that schools were wired and computers were put in a closet,” she said. “Why were the computers put in a closet? Because the teachers had not been taught how to teach using the Internet.” Abernathy said most in the U.S. have access to broadband: “It is the take-rate issue, and that’s the challenge.”
NEW ORLEANS -- State phone regulators see December as a key month, said panelists at the annual NARUC meeting here. Nebraska Public Service Commission member Sue Vanicek said her state’s suit over its power to assess Vonage and other intrastate VoIP providers a 6.95 percent fee to support the state universal service fund will affect USF efforts by other states, as will an FCC ruling expected next month on changing the federal system for ensuring universal phone service and agency controls on intercarrier compensation.
NEW ORLEANS -- Qwest CEO Ed Mueller said the economic crisis shows that regulation has its place. Lauding state regulators for “successfully opening the industry to competition,” Mueller told NARUC telecommunications committee members Monday that state commissions gave his company and other incumbent providers “the flexibility to offer new services, bundles and promotions and adjust pricing to compete effectively and better serve customers.”
The FCC must improve administration of the Universal Service Fund, USF payers and recipients said last week in comments on an October FCC inquiry into how it might strengthen USF management, administration and oversight (CD Sept 15 p7). High error rates cited in a 2007 Inspector General audit worry the FCC. Meanwhile, Universal Service Administrative Co. and parent National Exchange Carrier Association urged the FCC to approve a divestiture of USAC from NECA.
With President-elect Barack Obama set to lead in 2009, FCC Commissioner Jonathan Adelstein hopes broadband deployment and other “long-neglected” issues “finally get the attention they deserve,” he said Thursday in a keynote at a University of Nebraska College of Law conference. Afterward, a panel of telecom officials said the FCC and Congress should focus on broadband deployment next year.
A reply comments deadline could keep the FCC from voting to revamp intercarrier compensation and the Universal Service Fund at its December meeting, FCC spokesman Robert Kenny said Wednesday. Wednesday’s Federal Register said comments on three competing revamp plans are due Nov. 26, with replies due Dec. 3. The FCC usually circulates agenda items three weeks before a meeting. This reply deadline is two weeks and a day before the Dec. 18 meeting. The final circulation period could be less than two weeks, because it likely will take the Wireline Bureau two days to write an order once replies arrive, said an FCC official.
The DTV transition is among 13 priorities the new White House must confront immediately, the Government Accountability Office said Thursday. Nearly a third of U.S. households are at “some risk” of losing TV service Feb. 17, GAO said, and many Americans are confused about what to do. NTIA likely will see coupon demand rise as the transition nears but “has no plan to address the increased demand,” the agency said.