The FCC late Friday approved purchase and privatization of Alltel by TPG Capital and Goldman Sachs Capital with a condition that concerned some commissioners. The order contains language capping Universal Service Fund payments to Alltel at 2007 levels, unless Alltel files cost data showing its per-line costs are less than the capped funding level or immediate compliance with the E-911 public safety answering point (PSAP) location accuracy standard.
Seeking Universal Service Fund reform they can live with, telecom companies have been meeting in small groups for months trying to agree on proposals for the Federal-State Joint Board on Universal Service. As the joint board’s self- imposed Nov. 1 deadline nears, meeting participants have become more closed-mouthed about progress.
An order drafted by FCC Chairman Kevin Martin would approve Alltel’s pending purchase and privatization by TPG Capital and Goldman Sachs Capital, but would cap Universal Service Fund payments to Alltel at 2007 levels. In what agency sources see as a surprising twist, the cap would come off only if Alltel can show immediate compliance with E-911 accuracy standards. Alltel called commissioner offices asking for a quick vote on the merger, though the order as circulated by Martin doesn’t invoke an abbreviated timeline. The Alltel order is expected to get approval. Officials from TPG Capital and Goldman Sachs had been pressing harder for a vote in recent weeks (CD Oct 22 p10). Martin also circulated an order that would approve AT&T’s acquisition of Dobson, also with a USF cap.
Internet service providers should be required to provide e-mail address portability, similar to that required for local phone numbers, for at least six months after a customer terminates ISP service, according to a petition for rulemaking filed at the FCC. Gail Mortenson said her AOL e- mail account was abruptly canceled after AOL learned that the account, tied to AOL’s old Internet subscription service, had been opened by her son when he was a minor, though she paid for it. A freelance copy editor in the District of Columbia, Mortenson said prospective customers couldn’t reach her after AOL closed the account, and she lost access to e-mails stored online. AOL canceled the account with “no notice whatsoever,” Mortenson said, and she’s considering legal action against the company. The petition was filed July 20 but surfaced only recently. E-mail addresses are just as crucial for public identity as phone numbers, she said, and the U.S. Postal Service also forwards mail for six months after an address change. “As in the pre-LNP days, consumers and businesses are effectively held hostage by their ISPs,” she said. Mortenson cited the FCC’s “broad ancillary authority” over communications that may appear outside its scope, such as VoIP, but are “critical telecommunications- like services” with a strong public interest component. CALEA, E-911, disability access and USF contributions were all imposed on IP-based communications through ancillary authority, she said. “There is no reason to treat e-mail address portability any differently.”
Rural consumers should decide what kind of telecom service they want, rather than others “jamming one technology down their throats,” a CTIA spokesman said Tuesday in response to a plan to cap Universal Service Fund subsidies for wireless providers (CD Oct 2 p3). “Rural consumers have every right to get the same communications abilities as New York and Houston” and that includes wireless service, he said. Wireline providers are trying to limit choices for rural consumers by limiting the amount of subsidies wireless carriers can get to serve those customers, he said. The Keep America Connected Coalition, the sponsor of Monday’s conference, appears to “start from the assumption that rural telephone companies are delivering… real value today under the ‘high cost’ portion of the USF,” said Cap the Fund, a consumer group that supports reducing the Universal Service Fund. Consumers pay “a heavy toll… for outlandish USF tax subsidies going into the pockets of both wireless companies and wireline rural telephone companies,” the group said.
The telecom industry argued vehemently against modifying special access rules in a House Telecom Subcommittee hearing Tuesday, as Democratic leaders pushed for new pricing policies. Democratic leaders also condemned the FCC’s forbearance petition policies as lacking transparency, preventing Congress from exercising “appropriate” oversight. “Unacceptable,” House Commerce Chairman John Dingell, D- Mich., said in a back-and-forth discussion with Verizon Executive Vice President Tom Tauke.
An FCC vote on whether to cap universal service subsidies to competitive rural telecom companies “hopefully” will occur in the “very, very near future,” FCC Commissioner Deborah Tate said Monday at a conference on Universal Service Fund reform. Asked to specify the timing, Tate said only FCC Chairman Kevin Martin can answer more definitively. She co- chairs the Federal-State Joint Board on Universal Service, which earlier this year recommended the interim cap to the FCC. Tate said she’s still pushing for a Nov. 1 deadline for the Joint Board to make another recommendation to the FCC on longer-term changes in the USF.
Carriers of various sizes told the FCC they back a bid by Windstream to convert to price cap regulation (CD Aug 8 p9) -- but for different reasons. Big companies like Verizon saw Windstream’s regulatory shift as raising a prospect of savings in access charges and Universal Service Fund contributions. Midsized rural companies saw a chance to follow Windstream’s lead and gain flexibility themselves.
Telecom carriers will contribute slightly less to the Universal Service Fund as a percentage of revenue in the fourth quarter, the FCC said. The “contribution factor,” or percent of interstate and international revenue that carriers donate to the fund, will drop to 11 percent in the fourth quarter, starting in October, from 11.3 percent. After rising significantly in the second quarter, to 11.7 percent from 9.7 percent, that percentage has been dropping slightly. The percentage reflects the sum spent on USF subsidies and the amount of industry revenue available to draw from. The fourth-quarter figure is designed to collect $1.9 billion, more than half going to the “high-cost” fund to support rural telephony. The rest goes to the E-rate, Lifeline low-income support and rural health care services.
Both broadband and wireless should be in the mix for high-cost Universal Service Fund reform, the Federal-State Joint Board on Universal Service said Thursday in a brief statement. The board adopted the statement in July, but it took the FCC two months to release it, sources said Friday.