The universal service fund’s “significant increase” in erroneous payments was flagged in a recent Congressional Research Service report. While many government programs have reduced their error rates, the USF error rate “increased from 14.7% in FY 2007 to 19.2% in FY 2008, and USF-related improper payments grew from $906 million to $1.6 billion in that time,” the report said. The error rate for all agencies was 3.9 percent in FY 2008, up from 2.8 percent the year before, CRS said.

F.J. Pollack, TracFone Wireless’ CEO, called for at least a significant reduction of the Universal Service Fund’s high-cost program, the one part of the fund that has had major increases in recent years. Pollack spoke Monday at a Technology Policy Institute lunch on Capitol Hill.

Kansas and Nebraska regulators asked the FCC to allow states to charge VoIP providers universal service fund fees on intrastate traffic. Their petition, filed Thursday, is the latest development in an issue that came to a head when Nebraska tried to charge VoIP provider Vonage fees to help support the state’s Universal Service Fund (CD June 8 p7). The Kansas and Nebraska utility commissions asked the FCC to “declare that state USF assessment is not preempted and has not been preempted, so long as the state does not assess interstate revenue.”

Jeff Pulver aims to “reboot telecom” by lobbying in Washington for widespread adoption of HD voice technology, the VoIP pioneer and Vonage co-founder said Tuesday. Pulver plans in September to formally introduce his effort, which seeks to make HD voice the “bare-bone minimum quality” voice standard for broadband, wireless and traditional wireline by 2015, he said.

An AT&T emergency petition on Universal Service Fund contributions is expected to flare up old arguments before the new FCC, telecom industry officials said Monday. Late Friday, the company urged “immediate commission action” to adopt the plan by AT&T and Verizon for a pure numbers-based mechanism, in light of the all-time high 12.9 percent contribution factor that kicked in earlier this month. But AT&T’s foes don’t appear to have budged on the subject.

The State E-Rate Coordinators Alliance told the FCC it opposes a proposal by Verizon and Verizon Wireless that any-time any-place wireless Internet access should be an eligible service for USF reimbursement (CD June 25 p3). “SECA believed, and still believes, that this proposal represented a major change in E-rate funding and purpose that was so far beyond the scope of the draft [Eligible Services List] process as to not require a reply comment,” the group said in comments filed at the FCC. “However, given supporting reply comments by Qualcomm and the San Diego Unified School District, SECA believes it is important for the Commission to recognize that there is far from universal support for greatly expanded eligibility of wireless Internet services.” The statutory intent of the E-rate program was limited to providing Internet access to schools and libraries, SECA said: “The intention was not to support Internet access, whatever the technology, to all Americans -- as would be implied by providing wireless Internet access for any and all students and library patrons.”

AT&T will file an emergency petition at the FCC next week asking the agency to move to a “more sustainable” numbers-based system for collecting Universal Service Fund payments, the company said Wednesday. AT&T pointed to the record 12.9 percent USF contribution factor, which kicked in Wednesday, in citing the need for immediate action. “This is the highest contribution factor in history, and is equivalent to more than a half-a-billion dollar increase since the beginning of this year for those consumers and businesses that ultimately pay for this program,” Senior Vice President Robert Quinn said in a statement. “It is our customers who pay to support this program.” AT&T called for quick action by commissioners. “Because moving to a telephone numbers- based system will require 12-18 months to implement by both USAC and the industry, it is critical to begin this process now,” Quinn said.

People with disabilities would have better access to communications devices under a bill (HR-3101) introduced last week by Rep. Ed Markey, D-Mass., former chairman of the House Telecom Subcommittee. Markey introduced similar legislation in the last Congress but it didn’t pass. HR-3101 would require the disabled to have access to phone-type equipment and services used over the Internet. Internet phones and other devices would have to be hearing-aid compatible under the bill. Money from the universal service program’s Lifeline and Link-up programs could be spent on broadband services, and up to $10 million a year from USF could be used for equipment for the deaf or blind. The bill also would require closed captioning decoder circuitry in all video programming devices, and extend the close captioned obligations to video programming on the Internet. Other parts of the bill would require easy-to-use TV program selection menus for blind people, and require access to televised emergency programming for people with low-vision or no sight. The Coalition of Organizations for Accessible Technology, Communications Service for the Deaf, and National Association of the Deaf, and American Council of the Blind praised the bill.

The FCC aims to open soon a proceeding that will “closely examine” wireless handset exclusives, acting Chairman Michael Copps said Thursday. In a keynote speech at the Pike & Fischer Broadband Summit, he also called for an overhaul of the Universal Service Fund and reflected on the agency’s development of a national broadband plan.

Congress has had “substantial” discussions with the Obama administration on crafting appropriate rules for the broadband stimulus grant program, due out in two weeks, House Communications Subcommittee Chairman Rick Boucher, D-Va., said Thursday at a Pike & Fischer conference. It’s pivotal how the agencies define “unserved” and “underserved” for purposes of awarding grants, Boucher said. “It is important we have a common-sense definition,” he said, suggesting that the absence of competition, prices out of reach of consumers and low speeds should be taken into account in defining “underserved.” “Unserved” should apply to areas with no service, he said, but the definition should be flexible enough not to penalize counties where a few people can get broadband service -- a situation that he dealt with when a county in his district was trying to get RUS grants. Stimulus funding will help deploy more broadband, but federal policymakers also need to consider other steps, such as revamping the universal service program to include broadband. Boucher said he is close to finalizing bipartisan USF legislation that has the support of many carriers and stakeholders. He told reporters he hopes Congress can pass that bill this year. He said he also plans to co-sponsor a bill introduced by Rep. Anna Eshoo, D-Calif., that would require new federal highway projects to include conduit for broadband, a measure that may get included in federal highway reauthorization legislation. The Senate has a bill like Eshoo’s that was introduced this week by Democratic Sens. Amy Klobuchar of Minnesota and Mark Warner of Virginia. -- AV