FCC Chairman Kevin Martin’s push to act on a complex Nov. 4 agenda has fueled intense lobbying, letter writing, phone calls and meetings with advisors, according to interviews with analysts, lobbyists and Hill staffers. The activity level, common in administrations whose ends are near, is heightened by high-profile issues affecting a wide array of players. The “order of magnitude” is big in a compressed time period, said Stifel Nicolaus analyst Blair Levin.
Two trade association for small rural carriers said they back the FCC’s overhaul plan for the Universal Service Fund and intercarrier compensation, after FCC Chairman Kevin Martin agreed to several concessions for rate-of-return carriers. The Western Telecommunications Alliance and the Organization for the Promotion and Advancement of Small Telecommunications Companies approved the plan after “numerous direct conversations” with Martin, including a conference call Tuesday night ending around 7:45 p.m., directly before the start of sunshine. The National Telecommunications Cooperative Association called the endorsement “very risky and dangerous.”
Implementing draft FCC rules on universal service fees could destroy the telematics industry, ATX Group said in a Wednesday press release. Proposals to set a fixed monthly fee of $1 per phone number would raise location-based emergency communications costs to a point where the business wouldn’t make sense, ATX Group said. The commission doesn’t see that most such services are used only in the rare instance of an emergency and are priced accordingly, the company said. “We just don’t think it makes sense to assess fees on these services in the same manner the FCC would like to impose fees for traditional telephone or cell phone service.” ATX Group told the FCC in an Oct. 28 filing that in “virtually all circumstances, the USF fee will exceed the cost of the airtime,” which would “choke off” services the commission “has recognized as critical to improving emergency response.”
Revamping universal service as the FCC proposes “could result in no support” for “improving and expanding rural wireless infrastructure,” the Rural Cellular Association and the Alliance of Rural CMRS Carriers said Wednesday. The groups want the FCC to put its plan out for comment. “Lack of information … has been very frustrating for RCA and its 100 wireless carrier members, and the group is apprehensive about any proposal to reform the USF program, especially one that no one outside the commission has seen,” RCA said. The public “has had to rely on press conferences and consulting with those being briefed by the Commission to determine the proposed rules since Chairman [Kevin] Martin’s plan has not been circulated outside the FCC,” the group added.
With the proper revisions, major cable and wireless associations said, they would back FCC Chairman Kevin Martin’s plan to overhaul the Universal Service Fund and intercarrier compensation. Meanwhile, Qwest, congressmen and consumer advocates took sides. The FCC plans to vote Nov. 4 on the Martin plan. Sunshine was to have gone into effect Tuesday (CD Oct 28 p2).
Any FCC intercarrier compensation and Universal Service Fund decision is unlikely to affect a merger between CenturyTel and Embarq, Embarq CEO Tom Gerke said in a Monday conference call. CenturyTel announced it will acquire Embarq for $11.6 billion, including assumption of debt. The deal is expected to close Q2. Analysts agreed they see few regulatory hurdles.
With a lobbying ban looming, telecom interests are making feverish last-minute pitches to sway commissioners on possible overhauls for the Universal Service Fund and intercarrier compensation. Unless the FCC says otherwise, lobbying on the issue ends sometime Tuesday, with release of the commission’s sunshine notice for the Nov. 4 meeting. Verizon recently joined AT&T and Qwest in endorsing comprehensive reform.
CompTel condemned a proposal by AT&T and Verizon to implement a hybrid universal service contribution mechanism based on phone numbers and dedicated connections (CD Oct 22 p5). “The AT&T/Verizon plan will have a grossly disproportionate impact on small business customers and should be rejected out of hand,” CompTel said. For example, a customer now paying $17.67 in USF per month for a DS1 would pay $35 under the Bells’ plan, it said. “The last thing the Commission should be doing in this poor economic climate is adopting measures that will put additional financial strain on the small businesses that employ 50.6 percent of the country’s private sector workforce.”
Commissioner Deborah Tate praised the FCC for drafting a revamp for the universal service fund and intercarrier compensation. But speaking Friday at a Free State Foundation forum, the commissioner mostly kept mum on her opinions of the proposed order circulating on the eighth floor. Tate said she’s “inclined to support” a pilot USF Lifeline/LinkUp program proposed by Chairman Kevin Martin to get broadband to low-income households. She didn’t say anything about the draft’s other points except that she hopes for consensus.
The Independent Telephone and Telecommunications Alliance, a mid-sized carriers trade group, is “encouraged” that NARUC wants public comment on intercarrier compensation and Universal Service Fund proposals at the FCC, it said. “NARUC clearly recognizes the weight and potential unintended consequences of the FCC rushing to adopt such a large and complicated order in such a relatively short time frame,” said ITTA President Curt Stamp. “We are hopeful that the FCC will heed the advice of their state colleagues and give this Order time for meaningful review and consideration in a comment period.” Stamp said the changes proposed for intercarrier comp and USF could have a “devastating” effect on midsized carriers: “The stakes are too high for the FCC to rush to judgment on this issue.”