An AT&T emergency petition on Universal Service Fund contributions is expected to flare up old arguments before the new FCC, telecom industry officials said Monday. Late Friday, the company urged “immediate commission action” to adopt the plan by AT&T and Verizon for a pure numbers-based mechanism, in light of the all-time high 12.9 percent contribution factor that kicked in earlier this month. But AT&T’s foes don’t appear to have budged on the subject.
The State E-Rate Coordinators Alliance told the FCC it opposes a proposal by Verizon and Verizon Wireless that any-time any-place wireless Internet access should be an eligible service for USF reimbursement (CD June 25 p3). “SECA believed, and still believes, that this proposal represented a major change in E-rate funding and purpose that was so far beyond the scope of the draft [Eligible Services List] process as to not require a reply comment,” the group said in comments filed at the FCC. “However, given supporting reply comments by Qualcomm and the San Diego Unified School District, SECA believes it is important for the Commission to recognize that there is far from universal support for greatly expanded eligibility of wireless Internet services.” The statutory intent of the E-rate program was limited to providing Internet access to schools and libraries, SECA said: “The intention was not to support Internet access, whatever the technology, to all Americans -- as would be implied by providing wireless Internet access for any and all students and library patrons.”
AT&T will file an emergency petition at the FCC next week asking the agency to move to a “more sustainable” numbers-based system for collecting Universal Service Fund payments, the company said Wednesday. AT&T pointed to the record 12.9 percent USF contribution factor, which kicked in Wednesday, in citing the need for immediate action. “This is the highest contribution factor in history, and is equivalent to more than a half-a-billion dollar increase since the beginning of this year for those consumers and businesses that ultimately pay for this program,” Senior Vice President Robert Quinn said in a statement. “It is our customers who pay to support this program.” AT&T called for quick action by commissioners. “Because moving to a telephone numbers- based system will require 12-18 months to implement by both USAC and the industry, it is critical to begin this process now,” Quinn said.
People with disabilities would have better access to communications devices under a bill (HR-3101) introduced last week by Rep. Ed Markey, D-Mass., former chairman of the House Telecom Subcommittee. Markey introduced similar legislation in the last Congress but it didn’t pass. HR-3101 would require the disabled to have access to phone-type equipment and services used over the Internet. Internet phones and other devices would have to be hearing-aid compatible under the bill. Money from the universal service program’s Lifeline and Link-up programs could be spent on broadband services, and up to $10 million a year from USF could be used for equipment for the deaf or blind. The bill also would require closed captioning decoder circuitry in all video programming devices, and extend the close captioned obligations to video programming on the Internet. Other parts of the bill would require easy-to-use TV program selection menus for blind people, and require access to televised emergency programming for people with low-vision or no sight. The Coalition of Organizations for Accessible Technology, Communications Service for the Deaf, and National Association of the Deaf, and American Council of the Blind praised the bill.
The FCC aims to open soon a proceeding that will “closely examine” wireless handset exclusives, acting Chairman Michael Copps said Thursday. In a keynote speech at the Pike & Fischer Broadband Summit, he also called for an overhaul of the Universal Service Fund and reflected on the agency’s development of a national broadband plan.
Congress has had “substantial” discussions with the Obama administration on crafting appropriate rules for the broadband stimulus grant program, due out in two weeks, House Communications Subcommittee Chairman Rick Boucher, D-Va., said Thursday at a Pike & Fischer conference. It’s pivotal how the agencies define “unserved” and “underserved” for purposes of awarding grants, Boucher said. “It is important we have a common-sense definition,” he said, suggesting that the absence of competition, prices out of reach of consumers and low speeds should be taken into account in defining “underserved.” “Unserved” should apply to areas with no service, he said, but the definition should be flexible enough not to penalize counties where a few people can get broadband service -- a situation that he dealt with when a county in his district was trying to get RUS grants. Stimulus funding will help deploy more broadband, but federal policymakers also need to consider other steps, such as revamping the universal service program to include broadband. Boucher said he is close to finalizing bipartisan USF legislation that has the support of many carriers and stakeholders. He told reporters he hopes Congress can pass that bill this year. He said he also plans to co-sponsor a bill introduced by Rep. Anna Eshoo, D-Calif., that would require new federal highway projects to include conduit for broadband, a measure that may get included in federal highway reauthorization legislation. The Senate has a bill like Eshoo’s that was introduced this week by Democratic Sens. Amy Klobuchar of Minnesota and Mark Warner of Virginia. -- AV
The FCC should block the imposition of a 12.9 percent universal service fund contribution factor, the highest in history, David Bergmann, chair of the National Association of State Utility Consumer Advocates telecom committee, said in an interview Tuesday. The FCC, which released the proposed new factor Friday (CD June 16 p4), has until June 26 to act before the percentage request is deemed granted. The higher factor could mean $1-$2 hikes on some consumers’ phone bills, Bergmann said. In a filing last week at the FCC, NASUCA said the commission could reduce the factor by directing USAC to dip into $1 billion in unused USF E-rate funds, or nearly $6 billion in assets held for the federal fund. NASUCA believes that that’s a good temporary fix but that the FCC ultimately must revamp USF distribution to limit payouts to companies that don’t actually need subsidies, Bergmann said. Moving to a numbers-based system for USF contribution, which has been suggested by wireline companies big and small, isn’t the answer, he said. The existing system of basing contribution on carrier revenue works because it means people who use long distance service more also pay more to USF, he said. However, if the FCC wants to direct USF funds to broadband, NASUCA supports requiring all broadband providers to pay into USF, he said.
Carriers must pay 12.9 percent of their long-distance revenue to the Universal Service Fund in the third quarter, 1.6 percentage points more than this quarter. Big phone companies were quick to note that’s the highest figure in the fund’s history. But some small rural carriers disputed that the high factor shows that a thorough revamp of USF is needed.
The FCC should bar nonrural local exchange carriers from getting money from the universal service nonrural high-cost fund in states where rates have been deregulated, said the Mississippi Cable Telecommunications Association. In reply comments at the FCC on a 2005 remand by the 10th U.S. Circuit Court of Appeals (CD May 12 p3), the cable association said such a rule would be a good “first step” in revamping the non-rural fund. The association’s members compete with non- rural LECs, but don’t get USF subsidies. A state will deregulate incumbent LEC rates if it determines that competitors will keep the ILEC prices in check, the association said. “If an ILEC’s competitors … can provide services without subsidy, then there is no reason to continue a subsidy to the non-rural ILEC, absent a showing of need.” Deregulated ILECs in Mississippi “have obtained a lion’s share of the fund,” it said. But there’s no evidence that the money “has even been used to subsidize service.”
Wisconsin legislators should reject a proposal to charge residents 56 cents a month on wireless service to fund the state universal service fund, and 75 cents a month for police and fire protection, consumer advocacy group MyWireless.org said Wednesday. The proposal appears in a state budget being considered this week. More than 4 million Wisconsin residents use wireless services, paying more than 11 percent on average in combined monthly taxes, fees and surcharges, the group said. The state universal service fund has no bearing on wireless service, it said. “The state USF funds currently collected from Wisconsin’s consumers are not being used for their original intended purpose, which was to pay for enhancing consumer telecommunications systems in rural and underserved areas,” it added. “This new USF hike would be on top of a blatant disregard to a promise made previously to wireless consumers by the state, such as an old E9-1-1 fee that had a $20 million surplus - and that was supposed to be refunded to Wisconsin consumers in $5.00 increments - will in fact not be refunded. Instead, that money was diverted by the state to be used for general revenue purposes.” The group also slammed a proposed 75-cent fee to be charged on landline and mobile service “to pay for so-called ‘police and fire protection services,’ which could also simply be used to fill a revenue hole in the general budget.” The group calculates that the new fees would add $1.31 per month to wireless phone bills, a total cost to wireless consumers exceeding $60 million a year. “Wisconsinite cell phone users are being asked once again to bear more than their fair share, with an excessive 32% total combined increase in new fees on their monthly bills,” said Brian Johnston, the group’s communications director. “Wisconsin should be seeking to eliminate regressive taxes on communication services at this time, in order to relieve consumers of excessive tax burdens rather than expanding bad policy to wireless services.” State Senate Republican leader Scott Fitzgerald has attacked the budget as pork-riddled and Gov. Jim Doyle and his fellow Democrats as anti-consumer. “Our state is struggling to dig out of a recession, yet Gov. Doyle and legislative Democrats seem to think that raising $3 billion in taxes and fees will help solve the problem?” he asked. “It goes against common sense.”