With the incoming 109th Congress expected to pass telecom reform legislation, wireline and wireless lobbyists see issues of state jurisdiction playing a role in the debate. Edward Merlis, USTA senior vp-govt. and regulatory issues, said state jurisdictional concerns are one reason he believes Congress, not the FCC, is the only body able to make the needed changes to the telecom regulatory regime. Bobby Franklin, CTIA vp-govt. affairs, said the issues raised in the VoIP debate during the last Congress are likely to be raised in other telecom contexts next year, including wireless.
T-Mobile, Western Wireless and Dobson called on the FCC to ask detailed questions about the Intercarrier Compensation Forum (ICF) plan before circulating a proposal to fix the intercarrier compensation regime. Wireless carrier sources said they expect pressure to grow in coming weeks as the FCC nears circulation of an order on the issue. The Wireline Bureau has predicted a vote on an intercarrier compensation item in mid-2005.
Sen. Sununu (R-N.H.), in a remarkably candid Phoenix Center session said Thurs. comprehensive telecom legislation covering the DTV transition could be ready for members’ votes by June 2006. Sununu, who spoke about 90 min. and answered dozens of questions from attendees, said telecom reform would be a difficult process with many issues to deal with, most notably universal service fund reform. “Nothing will be agreed to until everything is agreed to,” he said of the bill’s prospects: “It will be one very large vehicle.”
Telecom Act revision should be legislation of few words and fewer regulations, BellSouth Chmn. Duane Ackerman told an American Enterprise Institute/Brookings Institution forum Tues. If Congress concludes competition between multiple facilities-based networks works better than traditional regulation -- which Ackerman believes it will -- telecom reform “could be dealt with in a very short bill in a matter of months, not years. This is not complicated.” Ackerman emphasized that telecom reform must be simple, to avoid lengthy litigation like that over the Telecom Act of 1996.
The FCC Wireline Bureau issued the first double-digit contribution factor for carriers paying into the Universal Service Fund (USF) -- 10.7% for first quarter 2005, up from 8.9%. The factor is a percentage of carriers’ interstate revenue and usually is passed on to customers as a line item on phone bills. It reflects USF costs but not costs caused by the FCC’s decision to apply the Anti- Deficiency Act to the USF. Congress recently passed legislation exempting the USF from the Act’s requirements until the end of 2005. SBC Senior Vp James Smith said the double-digit USF figure “clearly highlights the need for comprehensive reform of how the program is funded” through measures such as the changes proposed by the Intercarrier Compensation Forum. The USF increase also could have been lessened if the FCC required AT&T “to pay its lawful share into the fund,” Smith said. AT&T hasn’t been making USF contributions on revenue from its enhanced prepaid card services. SBC contended the amount AT&T is withholding represents about 1/2 the contribution factor increase. An AT&T spokeswoman said SBC’s comments were “self-serving rhetoric.” She said it would be “misguided policy” to impose USF obligations on enhanced prepaid cards because it would “shift more of the costs of the fund to those least able to afford it.” AT&T is the largest contributor to the USF. The FCC is expected to act on the AT&T card issue early next month.
CTIA called for completely neutral rules for deciding when a carrier can be classified as an eligible telecom carrier (ETC) under the federal USF program. “The rules should be modified so that competitive ETCs should begin receiving support upon designation,” CTIA said. CTIA also said any new guidelines should be applied retroactively.
The Senate sent telecom legislation to President Bush on Wed. evening in a literal 11th-hour vote. By approving HR-5419, the Senate approved 3 legislative measures and ended weeks of political infighting about everything from Congressional Budget Office scoring to appropriators’ authority and boxing regulation. Sources said the White House would sign the act, which includes the spectrum relocation trust fund, E-911 funding and a temporary fix to accounting problems in the E-rate program. The junk fax bill, HR-4600, was the only legislation that had a reasonable chance to pass and didn’t. “The legislation brings needed changes that will promote homeland security and increase wireless broadband opportunities,” FCC Chmn. Powell said.
At our deadline, Congress had taken no action on pending telecom legislation and appeared unlikely to do so. Conflicting stories and behind-the-scenes finger pointing highlighted the debate this week, but congressional and industry sources attributed the collapse of legislation to one central theme: Political infighting and retaliation.
There appears to be a break in the stalemate over remaining telecom legislation before Congress, but it remains unclear if there’s time to move legislation before Congress recesses for the year. Senate Commerce Committee Chmn. McCain (R-Ariz.) agreed to move the Universal Service Fund provision that’s part of the trio of telecom bills awaiting congressional action (HR-5419). McCain had a hold on the bill because the House wouldn’t consider his bill to create a national boxing commission. It appeared the 2 other measures -- on spectrum trust fund relocation and E-911 funding -- wouldn’t get moved.
FCC Chmn. Powell and USTA urged Congress Mon. to pass legislation that would exempt the universal service fund from Anti-Deficiency Act requirements that would delay E- rate payments and could lead to higher USF fees on telecom consumers. The USF provision is part of HR-5419, which also includes spectrum trust fund relocation legislation and federal funding for E-911 deployment. The bill has been stalled by Senate Commerce Committee Chmn. McCain (R- Ariz.), who’s insisting that the House also consider his legislation that would establish a national boxing commission. In a public statement Mon., Powell said all 3 measures were important and urged Congress to pass the bill before it adjourns. Congress is scheduled to meet this week to consider the intelligence reform legislation, but many in the telecom industry hope the impasse on HR- 5419 can also be resolved this week, though sources have said both McCain and House leaders appear reluctant to change their position. “The temporary Anti-Deficiency Act exemption is necessary to mitigate unnecessary increases to our contribution factor as well as ensure our school children have continued access to computer resources,” Powell said. A letter Mon. from 219 USTA members to Senate leaders urged Congress to pass the USF legislation. “Unfortunately, if not corrected, this bureaucratic change could also cause consumer phone rates to rise dramatically,” said USTA Pres. Walter McCormick.