The role regulation can and should play in promoting broadband deployment across the U.S. was a major area of contention in early comments on the FCC’s national broadband plan. Comments were still coming in at our deadline. The agency’s notice of inquiry was sweeping in approach and expected to spark a wide-ranging debate. Industry officials said Monday most comments will likely break little new ground, but the process gives the FCC a solid record on which to build its report and possibly propose future rulemakings.

An FCC report showing that the universal service high- cost fund rose to $4.5 billion in 2008 from $1.3 billion in 1997 highlights the need for change, the House Commerce Committee’s ranking member, Joe Barton of Texas, said Friday. The fund is a “bloated government program in serious need of reform,” Barton and Communications Subcommittee ranking member Cliff Stearns of Florida said in a written statement. The FCC submitted the report in response to an April request from the committee’s Democratic and Republican leaders.

Verizon is willing to discuss an FCC “fifth principle” on Internet nondiscrimination with the incoming FCC administration, Executive Vice President Tom Tauke told reporters Thursday. “We are not certain yet that there is a problem that needs to be addressed. Our primary concern is to make sure that any policy that is adopted does not disrupt” investment or interfere with consumer choice, he said.

The FCC denied a request by Virgin Islands Telephone seeking an emergency waiver of accounting rules that could reduce the company’s high-cost loop support under the Universal Service Fund. The carrier asked for relief due to recent network infrastructure damage in the Virgin Islands inflicted by Hurricane Omar (CD Dec 9 p6). But the FCC said the company, Vitelco, didn’t show it needs high-cost support “beyond what it and other similarly-situated companies are entitled to receive” under USF high-cost rules. “The relief Vitelco is seeking … is unrelated to its financial troubles caused by Hurricane Omar, Vitelco’s parent company’s bankruptcy, and general past mismanagement,” the FCC said. “The reduction in Vitelco’s high-cost loop support is due to the fact that Vitelco’s C&WF plant is fully depreciated and Vitelco has failed to invest in new facilities.” The company will be eligible for more support after investing in its plant, it said.

AT&T is investing as much as it can in its broadband infrastructure, CEO Randall Stephenson said Thursday at the Sanford Bernstein Conference. Some expect AT&T to apply for broadband stimulus money, but Stephenson said the company is waiting to see how it will be distributed. Under the new administration, issues like net neutrality, intercarrier compensation and USF reform aren’t going away, he said. Meanwhile, AT&T, particularly its enterprise business, is still feeling the economic pressure, he said.

USTelecom joined Verizon Wireless and Sprint Nextel in asking the FCC to reject a Corr Wireless petition that seeks to have universal service monies that used to flow to Verizon Wireless and Sprint Nextel redirected into a pool shared by all competitive eligible telecommunications carriers. The wireline association called Corr arguments “nonsensical.”

An FCC report on rural broadband prescribes government intervention to spur availability and demand. The report, released publicly on Wednesday, was required by Congress in the 2008 Farm Bill and did not require sign off by all commissioners. Instead, writing in the first-person, acting Chairman Michael Copps highlighted common problems affecting rural broadband, including technological challenges, lack of data and high network costs. Copps also urged a revamp of the Universal Service Fund, new rules on network openness and an audit of all spectrum that the FCC has licensed, with an eye on where it is being used effectively or could see more use on a secondary basis.

District of Columbia residents with impaired hearing are signing up for expanded relay service, the Public Service Commission said May 19. So far, 23 Washingtonians have bought Captioned Telephone Relay Service phones that let users listen to a caller while reading word-for-word captions of what’s being said on the phone’s built-in display, the commission said. Hamilton Relay, which runs the city’s relay service, began providing CapTel in November. Customers access it through their local phone service at no additional monthly charge. The service is funded by the city’s Universal Service Trust Fund, underwritten by fees charged local phone customers, and the federal Universal Service Fund. For at least a year, Hamilton plans to offer the $495 CapTel phones to District residents for $99, the commission said.

Wyoming’s Public Service Commission set the state’s Universal Service Fund assessment level for 2009-2010 at 1 percent of gross intrastate retail telecom revenue, it said Friday. The rate applies to all customer billings beginning July 1. The commission set the weighted statewide average local exchange service rate at $25.05 for the 12-months starting July 1. For that period, the associated support benchmark is $32.57. No Wyoming customer should pay more than $32.57 monthly for basic phone service, excluding taxes, fees, surcharges and charges for custom features and other options, the commission said. The 12 telcos eligible for Wyoming USF support have been sent confidential spreadsheets stating the support they're eligible for. The commission proposes to distribute support totaling aggregate $225,769 monthly, it said.

The 8th U.S. Appeals Court should rehear en banc Nebraska’s appeal of a lower court decision barring the state from making traditional VoIP providers pay into its universal service fund, Nebraska officials said Thursday. A panel of the St. Louis-based court found May 1 that a U.S. District Court in Nebraska properly upheld an injunction Vonage obtained prohibiting Nebraska’s utility commission from assessing the VoIP company (CD May 4, p5). The en banc request challenges what the state called the panel’s “overbroad reading” of the FCC Vonage preemption order that the appeals court cited in rebuffing Nebraska. Contrary to what the 8th Circuit said, Vonage would not have succeeded with a claim to preemption that it deployed to obtain the injunction, the state argued. “Further, the Decision is based on a misapplication of the impossibility exception employed by the FCC to preempt such entry regulations,” Nebraska officials said in petitioning to have the ruling vacated and an en banc rehearing set. “Indeed, the United States and FCC submitted an amicus brief in this case in support of the NPSC, asserting that the Vonage Preemption Order ‘did not address, let alone preempt, the state-level universal service obligations of interconnected VoIP providers…’, and that the impossibility exception did not preclude the NPSC from placing this requirement on Vonage, as the NPSC’s NUSF Order ‘does not present a conflict with the FCC’s rules or policies.” The Nebraska utility commission’s order that Vonage pay into the state fund “does not conflict with any federal regulatory policy or impair the FCC’s authority to regulate the interstate aspect of interconnected VoIP service,” the state said. “In fact, its action is entirely consistent with the FCC’s imposition of USF contribution requirements on Vonage and other interconnected VoIP providers. The ‘impossibility exception’ relied on in the Decision thus does not apply.” In seeking an en banc rehearing, the state faces “an upstream swim,” said Brad Ramsay, general counsel for the National Association of Regulatory Utility Commissioners. “What’s in Nebraska’s favor is that there’s no question but that the court got it wrong. From a policy, legal and commonsense perspective, the May 1 ruling makes no sense. The question is, will the other judges be willing to act or will they defer to their brother jurists? If the judges really look at this case, they should reverse and rehear.” The May 1 ruling stands to imperil state universal service funds and the federal USF, Ramsay said. “Everything is migrating to VoIP -- not necessarily nomadic, but VoIP nonetheless,” he said. “There are 23 states with universal service funds. If those funds aren’t there, the rates in those states will go up significantly, and there will be a greater burden on the federal fund. This is really bad.” NARUC, which filed an amicus brief on Nebraska’s behalf in the earlier appeal, may weigh in on the en banc request as well, Ramsay said.