A proposed government initiative to widely deploy HD voice technology would be a boon to device manufacturers, said analysts and industry executives in interviews. But while Web-based VoIP providers and big network operators are eying HD voice, some smaller service providers doubt the unproven technology is worth the effort. And Washington may have other priorities.
The FCC’s inspector general is investigating the Universal Service Fund low-income program and plans to submit a report to the commission and Congress, acting Inspector General David Hunt said Tuesday. In a letter to various committee chairmen and ranking members in the House and Senate, he said his office has withdrawn the previous IG’s December finding that all payments by the program were incorrect, because it may not provide a “meaningful and accurate” picture.
The FCC should deny AT&T’s call for a Universal Service Fund contribution revamp, said the National Telecommunications Cooperative Association. AT&T filed a petition this month seeking “immediate commission action” on a plan from the carrier and Verizon for a pure numbers-based mechanism, in light of this quarter’s all-time high 12.9 percent contribution factor (CD July 14 p5). In an ex parte notice Tuesday, the NTCA accused AT&T of “attempting to create a false emergency in an effort to apparently spur premature FCC action so that AT&T may reduce or eliminate its USF contribution obligations prospectively through future regulatory arbitrage.” The NTCA said a 12.9 percent contribution factor is nothing to complain about, because it produces a phone bill that’s “a tiny fraction of a consumer’s monthly budget.” Using phone numbers for contribution ignores the movement to broadband, it said. “The AT&T proposal is backwards-looking, technology-biased, and will dramatically shift the burden of paying for universal service onto incumbent and competitive local exchange carriers and wireless carriers … while relieving interexchange, broadband and other types of providers of the obligation of paying for universal service.” The FCC should keep its current revenue-based contribution mechanism and change it slightly to take new technologies into account, the NTCA said. The FCC could achieve widespread broadband deployment in five to 10 years if it added broadband as a supported USF service and expanded the contribution base to all broadband and special-access transport providers, it said.
The interim cap on the Universal Service Fund has stunted wireless growth in North Carolina, Virginia and other states, said the Rural Cellular Association. In a letter last week to FCC Chairman Julius Genachowksi, RCA criticized a June 19 letter by the National Association of State Utility Consumer Advocates that said the cap has caused little harm. “NASUCA is more concerned about how much consumers pay into the fund rather than ensuring that rural consumers receive the benefits that the fund was intended to deliver,” the rural group said. “We think the latter, especially in the current economy, should be of paramount importance to the Commission and that the interim cap is frustrating Congressional objectives set forth in Section 254 of the Act.” In North Carolina, for example, the cap is cutting $23 million in USF subsidies annually, the rural association said. “As a result, wireless carriers serving the state are being forced to cancel or delay plans for new cell site construction.” The association played down the cost to consumers of removing the cap, saying the increase to USF fees on phone bills would be “pennies to low volume users … and negligible to high volume users.” The FCC has no authority to say what contribution factor is too high, it said. “Congress has never stated what level of contribution factor is unacceptable, and it is the province of Congress, not the FCC, to make such a determination.”
Verizon Wireless said it would support legislation or an FCC rule mandating roaming agreements under certain conditions for a minimum of two years. The commitment came in a letter it sent to House Commerce Committee Chairman Henry Waxman, D-Calif., late Wednesday. Waxman didn’t have a response to the letter, a spokeswoman said Thursday. Verizon said its offer came after a “dialogue” with committee staff on in-market roaming arrangements. Waxman wants carriers to expand roaming, he’s made clear at hearings and in past legislation.
Consumer Cellular is the latest prepaid wireless provider asking for an FCC exemption allowing it to participate in the USF Lifeline program. The Wireline Bureau sought comment on a petition by the company asking for forbearance from a Communications Act requirement that eligible telecommunications carriers provide service, at least in part, over their own facilities. This is the same exemption obtained by TracFone and other prepaid wireless companies that now offer Lifeline service.
The universal service fund’s “significant increase” in erroneous payments was flagged in a recent Congressional Research Service report. While many government programs have reduced their error rates, the USF error rate “increased from 14.7% in FY 2007 to 19.2% in FY 2008, and USF-related improper payments grew from $906 million to $1.6 billion in that time,” the report said. The error rate for all agencies was 3.9 percent in FY 2008, up from 2.8 percent the year before, CRS said.
F.J. Pollack, TracFone Wireless’ CEO, called for at least a significant reduction of the Universal Service Fund’s high-cost program, the one part of the fund that has had major increases in recent years. Pollack spoke Monday at a Technology Policy Institute lunch on Capitol Hill.
Kansas and Nebraska regulators asked the FCC to allow states to charge VoIP providers universal service fund fees on intrastate traffic. Their petition, filed Thursday, is the latest development in an issue that came to a head when Nebraska tried to charge VoIP provider Vonage fees to help support the state’s Universal Service Fund (CD June 8 p7). The Kansas and Nebraska utility commissions asked the FCC to “declare that state USF assessment is not preempted and has not been preempted, so long as the state does not assess interstate revenue.”
Jeff Pulver aims to “reboot telecom” by lobbying in Washington for widespread adoption of HD voice technology, the VoIP pioneer and Vonage co-founder said Tuesday. Pulver plans in September to formally introduce his effort, which seeks to make HD voice the “bare-bone minimum quality” voice standard for broadband, wireless and traditional wireline by 2015, he said.