The FCC is using a “hoax” argument that the Universal Service Fund (USF) contribution process is broken to justify fee hikes, a citizen group charged Fri. The USF contribution formula “requires at most minor adjustments that can be accomplished without hefty increases in federal phone fees,” the Keep USF Fair Coalition said. The group opposes FCC Chmn. Martin’s proposal to move from a long distance revenue- based system to one based on how many telephone numbers a carrier serves, claiming it would penalize low-volume long distance callers. At a news event set for today (Mon.), the group will discuss “the phony USF funding crisis.” A Tues. Senate hearing will address USF contribution methodology. Progress & Freedom Foundation Pres. Ray Gifford said the coalition’s view “is contrary to established fact.” The long distance industry, which is the basis for the current contributions system, “is in decline and it makes no sense as a funding vehicle for universal service in the age of VoIP technology.” A PFF working group has endorsed per-line fees.
CTIA officials are promoting a new proposal for USF reform that combines the “numbers-based” approach to collections promoted by Chmn. Martin with a capacity-based assessment for large users. CTIA began circulating its version of USF reform the past few weeks, a spokesman said. CTIA Pres. Steve Largent highlighted the USF proposal Mon. during a lunch with reporters, calling it one of the Assn.’s top priorities.
FCC Comr. Adelstein has “long supported a revenue approach” for raising money for the Universal Service Fund “because it’s easier to administer,” he told OPASTCO members Wed. at their winter meeting in Maui. That doesn’t mean he would reject proposals to move away from revenue, he told them. “I'm open to exploring all alternatives; I don’t reject any of these” proposals for reforming the USF contributions system, but none of them is “a panacea,” he said. The FCC is considering changing the way carriers contribute to the USF because of concern the current revenue-based approach no longer works due to changes in industry technology. Adelstein told the group universal service reform is one of the top 3 issues before the FCC this year. Others are intercarrier compensation and IP-based services -- and all 3 are interrelated. “I don’t know if we ever had such a big nut to crack” at the FCC, he said: “Each one of those 3 proceedings is a huge challenge and complicated on its own” and all have to be done in concert. During a Q-&-A session after Adelstein’s speech, rural telecom executives emphasized their concern about phantom traffic. Phantom traffic needs to be dealt with before the FCC takes on USF reform because “the basics need to be handled first,” said a telecom official from Minn. Adelstein said he agreed there was “a good argument for doing it first.” He told the group that “some people, I think, prefer to have this [issue] out there as a driver” to force consensus among supporters of various proposals. However, phantom traffic “may be harder” to fix if regulators wait, he said. In answer to another question, Adelstein said FCC rules require video content providers to offer nondiscriminatory access to their content at reasonable rates but the rules are limited. It’s “contrary to the intent” of the rules for companies to use their “vast hold on the market” to impede access to content, he said. One audience member asked if it made sense for rural carriers to keep “pouring” money into networks while intercarrier compensation and USF reform remained pending. Adelstein told him the FCC, and the Senate Commerce Committee, strongly support USF. “We can’t afford to let these networks go. They are critical to future economic competitiveness.”
The first session of the 109th Congress started on a fast track for telecom when the House quickly approved a broadcast decency bill in March, but its performance leaves much for the second session to complete. Chances for completing action on long-awaited DTV provisions ended when no deal was reached 2 days before Christmas. Congress approved a one-year exemption from Anti- Deficiency Act rules for the Universal Service Fund (USF) in Nov. In an effort led by Senate Commerce Committee Chmn. Stevens (R-Alaska), the measure was included in the Commerce-State-Justice appropriations bill.
Lobbying spending among telecom, cable and broadcast groups increased about 9% in the first half of 2005 compared with the same period in 2004, according to mid- year reports filed with the Secy. of the Senate. The reports examined for this article include only the internal spending reported by trade associations and companies. Most companies and trade associations supplement their internal resources with outside lobbying groups and law firms that have special expertise in topic areas for contracts ranging from $10,000 to $250,000 per filing period, which is 6 months.
FCC Chmn. Martin made it clear he still backs a numbers-based approach to reforming the way companies contribute to the Universal Service Fund (USF), despite concerns about that method’s effect on low-volume telephone users. User groups have said a phone number- based approach would hike USF fees carriers pass on to customers.
Plans for a draft House telecom bill markup are on hold until next year, lawmakers decided late Thurs. afternoon, when they couldn’t resolve differences. “We'll have a markup when we're ready to have a markup,” a panel spokesman said. David Hickey, telecom aide to Rep. Stearns (R-Fla.), said at a conference sponsored by the Practising Law Institute (PLI): “We want to get it done and we were debating a markup.”
Changing video habits could mean new markets for Fixed Satellite Services operators, and SES Global said it’s angling to go after them while competitors Intelsat and PanAmSat focus on combining. “Our peer group is preoccupied with merging and there’s a window of opportunity of at least three to five years to go after growth… under circumstances where there will be less competition,” said SES Global CFO Mark Rigolle at the UBS media conference Mon. And the evolving video market could offer SES just that opportunity, Rigolle said.
Universal service fund (USF) support would be used for broadband deployment, under a discussion draft released Thurs. of a bill by Reps. Terry (R-Neb.) and Boucher (D-Va.). The bill would expand the USF base by requiring payments into the fund by service providers that use telephone numbers or IP addresses or sell network connections. “To change USF, I believe that all who play must pay,” said Terry. He called the draft a vehicle for reform that would remedy “inequities that exist today.” Boucher said he’s seeking comments on the draft by Dec. 23 and plans to introduce a bill next year.
A measure adopted by the Senate to exempt the Universal Service Fund (USF) from the Anti-Deficiency Act (ADA) (CD Sept 16 p9) would let rural telecom companies “continue investing in their networks,” 4 rural telecom groups said. “We look forward to working with members from the House… to create a permanent fix,” the Independent Telephone & Telecom Alliance, NTCA, OPASTCO and Western Telecom Alliance said. The measure would extend for one more year an existing exemption of the USF from ADA provisions.