If the FCC moves to a numbers-based universal service contributions policy, it should be careful how it counts a carrier’s numbers, members of the Intercarrier Compensation Forum (ICF) told Wireline Bureau staff in a July 28 ex parte meeting. ICF members said the assessment for contributions purposes shouldn’t be based on all of the “assigned numbers” listed in the Numbering Resource Utilization/Forecast (NRUF) reports filed by carriers. “Assigned” numbers in NRUF reports include not only a carrier’s own working telephone numbers but also numbers ported to other carriers or shared through UNE-P and resale, the ICF said in a July 29 notice outlining the meeting. “Use of NRUF assigned numbers for USF contribution assessment would have the affect of inflating carrier contributions,” ICF said. Representatives of AT&T, SBC, General Communications Inc. and Level 3 attended the meeting.
Universal service fund (USF) contributions would be applied to all 2-way voice services under a bill introduced late Fri., just before the summer congressional recess. Sponsored by Sens. Smith (R-Ore.), Dorgan (D- N.D.) and Pryor (D-Ark.) , the bill broadens the base of contributors and establishes a separate fund capped at $500 million a year to encourage broadband deployment in rural, “unserved” U.S. areas.
Sen. Ensign (R-Nev.) Wed. introduced a broad telecom update bill that would erase local video franchise requirements, let municipalities invest in broadband networks via competitive bid and set consumer protection standards for carrier service. The bill did not address universal service fund (USF) reform, an issue Ensign said Senate Commerce Committee Chmn. Stevens (R-Alaska) and co- chairman Inouye (D-Hawaii) want to handle separately. A Committee aide confirmed that Stevens plans to address USF this year, separately or in a larger telecom bill.
AUSTIN, Tex. -- NARUC adopted resolutions Wed. that call for careful federal review of pending telecom mega- mergers, and suggest a general extension or carrier- specific waivers of a year-end FCC deadline for full implementation of handset-based wireless E-911. However, because of a technicality they voted against a proposal that would have urged states and the FCC to consider naked DSL as a pro-competition tool when reviewing mergers or generally making regulations. The measures, approved by NARUC committees earlier this week, were approved by NARUC’s board Wed. as official NARUC policy.
Chmn. Martin’s political instincts will mean the FCC tackles fewer controversial items in coming months as commissioner vacancies remain unfilled, analysts said Wed. at an FCBA brown bag lunch. Prospects are dim for quick appointments, as the White House focuses on potential nominees to the Supreme Court, where one or 2 seats could open up this summer, they said.
A bipartisan coalition of rural lawmakers said the House should take the first crack at addressing problems with the Universal Service Fund (USF) in telecom rewrite legislation. The proposal came Tues. at a press conference announcing 9 principles to be included in a bill. Sixty members of the Rural Caucus sent a letter to House Commerce Committee Chmn. Barton (R-Tex.) and Ranking Member Dingell (D-Mich.), outlining the principles, which include extending the base of contributors to USF to include “all providers of 2-way communications regardless of technology used to ensure competitive neutrality.”
FCC Comr. Copps expressed concern about one part of the Commission’s proposal to improve management of the universal service fund (CD June 15 p8): possible elimination of the application process for the E-rate program. The FCC asked for comment on distributing the funds directly to schools and libraries based on their size, instead of requiring applications, Copps said. In a separate statement, Copps said such a change could make it harder to identify fraud, because it would let funds be used for unspecified services and equipment, rather than requiring applications that specify where the money would go. Eliminating the application process presents other potential problems, he said: “Distributing funds directly to schools could conceivably exclude Catholic and other private and parochial schools from the E-rate program. Tying funds to school size could conceivably result in our rural and insular schools being denied the funds they need for the extraordinary cost of services in these areas, just because they have fewer students.” Copps said he supports many aspects of the proposal to improve USF programs, which the FCC revealed Tues. in a notice of proposed rulemaking. The E-rate program’s importance “means it needs regular review and care,” he said. Copps said he’s particularly supportive of a proposal to strengthen debarment rules and take new steps to identify and punish “predatory contractors.” Comr. Adelstein said he, too, backs better debarment rules and is glad the NPRM seeks comment on broadening the debarment rule “to encompass entities that have been found guilty of civil and criminal violations beyond those associated with our universal service programs or entities that are shown to have engaged in clear patterns of abuse of our rules.” Adelstein said he’s less supportive of proposals “to adopt overly formulaic approaches,” for example “allocating support based on formulas, like school size, may ignore critical differences in the cost to obtain services in rural parts of the country and may work against smaller or private schools that cannot achieve economies of scale.”
The FCC Tues. launched an inquiry into management and oversight of the universal service fund (USF) and will seek comments on how to improve the program. Among topics under scrutiny: (1) How to simplify and streamline the program’s management. The agency tentatively concluded a multi-year application process for telecom services in the E-rate and rural healthcare programs would simplify matters. The FCC also asked for comment on shortening or consolidating application forms and adopting deadlines to provide certainty to program applicants. (2) The effectiveness of efforts to protect the fund against misuse. The Commission tentatively concluded “more aggressive debarment procedures are necessary” and asked for comments on ways to improve the debarment rules, according to an FCC news release. The FCC also sought comment on establishing independent audits of some USF beneficiaries and contributors, and on rules to ensure those audits are effective and fair. It asked for suggestions on rules for recovering USF money not used in accordance with the rules. (3) The effectiveness of the administrative structure. (4) The need for performance measures to assess the program’s effectiveness. FCC Chmn. Martin said the notice of proposed rulemaking (NPRM) “provides an opportunity fo the Commission to explore the lessons learned through the operations of the High Cost and Low Income programs” and possibly apply them to other USF programs. Martin said the programs use strict formulas to distribute universal service support. “This type of formulaic approach may hold promise for improving the administration of the E-rate and Rural Healthcare programs,” he said.
Clarification: Speaking at Supercomm (CD June 9 p10), FCC Chmn. Martin said the USF high-cost fund hasn’t violated Anti-Deficiency Act controls.
Less than a decade after Congress passed a landmark law expanding the types of companies supporting the federal Universal Service Fund (USF), the fund faces a new financial crisis. The main problem, though, isn’t that the fund will run out of money any time soon. Due to fees the FCC assesses on local, long distance, wireless, paging, pay phone and international carriers alike, the USF now takes in about $6.5 billion a year. That money subsidizes rural and low-income residential phone service and communications links to rural schools, libraries, hospitals and other vital services. If the fund needs more cash, the fees automatically are adjusted upward.