Free Press is “blindly asserting” that “most” consumers aren’t getting the type of Internet service envisioned by Congress, Verizon said in reply comments on the FCC’s study of broadband deployment. On Free Press’s arguments that broadband services ought to have symmetrical upstream and downstream speeds, “Free Press stretches words of the statute past the breaking point,” Verizon said. Free Press, however, said the “slowed” deployment of Verizon’s FiOS and AT&T’s U-Verse “directly contradicts the supposed extensive deployments or robust connections touted by operators in this proceeding.” The 22 members of the Blooston Rural Carriers said Verizon “fails to explain” how its proposal for a capped, incentive-based high-cost support system would work when others have failed. The “more reasonable and effective approach” is to beef up the current program, Blooston says. But Verizon said the Blooston “arguments are largely a rehash” and that USF support for broadband has to rest on what customers are paying today, “not a massive new and open-ended carrier entitlement."

The Universal Service Fund should be used to subsidize broadband but the fund shouldn’t be expanded, the National Hispanic Caucus of State Legislators said Wednesday. The caucus also urged the FCC and other regulatory agencies to move quickly on smart grid technology. The caucus’s legislators spoke at a Wednesday briefing at the National Press Club, saying the fund should be “restructured” so it can pay for broadband deployment. The lawmakers demurred when asked what programs in USF should be cut.

Rep. Joe Barton, R-Texas, said Wednesday he will seek the chairmanship of the House Commerce Committee if Republicans retake the House in the November elections. Barton’s top priority: stopping the FCC from reclassifying broadband and regulating the Internet, he said.

The FCC should “peel away” some of the least contentious problems in a Universal Service Fund overhaul “instead of trying to boil the ocean,” Frontier Chairman Maggie Wilderotter told us Monday. Wilderotter was in town for an unrelated conference but met Monday morning with Chairman Julius Genachowski’s chief of staff, Eddie Lazarus. She said the commission could more easily tackle problems like phantom traffic. “That’s a big area they could clear up,” she said. “They have the authority to do that tomorrow” by subjecting all calls, even Internet voice, to USF charges and by changing the formula so it reflects the actual costs of service.

Free Press didn’t support the House net neutrality proposal that Republicans scuttled Wednesday (CD Sept 30 p1), President Josh Silver said in an interview. The public interest group believed that “introduction risked relieving the FCC chairman” of his duty to reclassify broadband transport under Title II of the Communications Act, and to make net neutrality rules, Silver said. Free Press is “relieved” that House Commerce Committee Chairman Henry Waxman, D-Calif., now is urging the FCC to act, he said. If FCC Chairman Julius Genachowski doesn’t fulfill Waxman’s request, “he will face an avalanche of public pressure.” In an e-mail to the Open Internet Coalition (OIC) before Wednesday’s announcement that no bill would be introduced, Silver threatened to pull out of the coalition if it issued a news release supporting the Waxman bill. “Free Press cannot afford to be misconstrued as supporting a bill that strips FCC rulemaking authority, fails to sufficiently protect wireless, and forecloses the agency’s ability to enact key goals” of the National Broadband Plan, “such as USF and low-income broadband deployment,” Silver wrote. “While we have deep respect for all of those from our community who worked tirelessly over the past few weeks on this effort, we have a strong disagreement with the assessment of this legislation as a positive, both on the merits and on the strategy. I don’t think the benefits of an OIC” news conference “in support of a doomed bill is worth the cost, but that’s not my call.” In a statement Wednesday, Waxman thanked the Consumer Federation of America (CFA), Consumers Union, Public Knowledge and the Center for Democracy & Technology, as well as AT&T, Verizon and NCTA, but not Free Press. The CFA praised the Waxman proposal. “Mr. Waxman’s bill would have created an important safety net to prevent the broadband Internet access landscape from being Balkanized by anti competitive pay walls and discriminatory technology barriers that block or degrade communications,” said Mark Cooper, the group’s research director.

Talk at the FCC of Universal Service Fund reform to include broadband services has satellite companies concerned over the possibility of increased contribution rates without any subsidy in return, industry executives said. Under the current system, companies pay into the USF based on their interstate and international end-user telecom revenue and generally leave satellite companies out of the running for subsidies. If a future version of the USF includes broadband, as proposed by the FCC and tentatively named the Connect America Fund (CAF), satellite companies could be left paying for expansion of competing technologies again, executives said.

A handful of companies have turned down loan awards from the Broadband Initiatives Program, and officials in the U.S. Agriculture Department’s Rural Utilities Service are in negotiations to get the companies to stay with the program, a RUS spokesman said. “Fewer than 10” of about 300 grant winners have turned down awards, he said.

The FCC approved an order letting schools and libraries lease dark fiber for broadband use, community use of schools’ broadband networks after hours and tying the E-rate cap to inflation. Indexing E-rate to inflation, as had been expected (CD Sept 8 p1), may mean the $2.25 billion annual cap will be raised for the first time in its history. The inflation measure caused Republican Commissioners Meredith Baker and Robert McDowell to part ways with their Democratic colleagues. Baker concurred on inflation and McDowell dissented. Both said they thought the Universal Service Fund -- of which E-rate is a part -- requires comprehensive reform.

Regulators in Kansas and Nebraska amended a request to make retroactive their powers to assess nomadic voice over Internet providers for state universal service funds. This all but clears the way for a declaratory FCC ruling that states can make their own USF assessments, and an order could be coming within weeks, agency officials said.

The House Commerce Committee’s hearing Thursday on Universal Service Fund reform should have had a witness representing rural and regional wireless carriers, Rural Cellular Association President Steve Berry said in a statement. “Numerous studies have shown that consumers are continuing to choose wireless over wireline services,” Berry said. “Neglecting to include wireless has been part of the problem in reforming USF in the past. RCA will not allow it to become a problem in the future. To date, the Wireline Competition Bureau has been given almost exclusive responsibility in the development of USF rules and policies, and that trend must be arrested. I strongly encourage Congress and the FCC to include wireless as it works to reform USF."