Make the Universal Service Fund cap permanent, three anti-tax groups urged the FCC in a joint written statement Thursday. The National Taxpayers Union, Americans for Tax Reform and Americans for Prosperity also supported imposing reverse auctions, killing the identical support rule that bases subsidies on the incumbent’s cost and “wiping out fraud, waste and abuse of USF tax dollars,” they said. “Phone taxes are out of control in America,” the groups said. “Wireless customers pay a crippling $21 billion per year in taxes and fees. American consumers deserve less taxation and more common sense from their government.” The Seniors Coalition and the Maryland Taxpayers Association also signed on.

The FCC fined Local Phone Services almost $437,000 for failing to file four telecommunications reporting worksheets and failing to make 10 monthly contributions to the Universal Service Fund. “The Commission cannot and will not tolerate any entity’s failure to contribute to the USF as required by our rules, and we will use our forfeiture authority to penalize and deter violations,” the FCC said in a forfeiture order. Local Phone has 30 days to pay.

The FCC should “step up” and tackle universal service issues, since congressional efforts are stagnant, Rep. Lee Terry, R-Neb., said in a conference keynote Tuesday for the Western Telecommunications Alliance and the Organization for the Promotion and Advancement of Small Telecommunications Companies. Terry said he told FCC Chairman Kevin Martin over the phone that “it doesn’t look like we're going to be able to do USF this year.” Terry asked Martin if that means “the FCC perceives that they need to step up,” he said: “He said ‘Yes.'”

The FCC should take a closer look at how using reverse auctions to distribute Universal Service Fund support would affect small carriers financially, said the Office of Advocacy for the U.S. Small Business Administration. The FCC proposed the use of reverse auctions in one of three continuing proceedings on revamping USF. In reply comments, the office said new USF rules “could impose an economic burden” on small incumbent and wireless carriers. The FCC should study how reverse auctions have worked in other industries and use a test market to see how they would work in telecom industry, it said. And the FCC should study how numbers-based USF contributions “may reduce some of the administrative burdens associated with USF reporting for small carriers,” the office said. USF contributions are now based on interstate revenue.

AT&T urged the FCC to impose the interim cap on Universal Service Fund high-cost support “as quickly as possible,” to “minimize the uncertainty now faced by” competitive eligible telecommunications carriers. “Many states require CETCs to make build-out commitments and USF certifications beginning in June and it is difficult for CETCs to respond to these requests before the state cap amounts are determined,” AT&T said in a meeting with the Wireline Bureau, according to an ex parte filing. AT&T also suggested that the FCC publish statewide cap amounts and quarterly reduction factors by state “to help CETCs manage in the new capped environment.”

NEW ORLEANS -- Expressions of concern were coupled with predictions that there would be little action on telecom legislation in this election year, said a panel of Hill staffers at the NCTA convention. A discussion about network neutrality legislation produced few fireworks, with House Commerce staffers from both sides agreeing that market solutions would be the first option rather than legislating a regulatory framework. Amy Levine, counsel to Chairman John Dingell, D-Mich., said that “where we go from here depends a lot on what happens out in the marketplace.”

Dozens of companies and other interested parties likely to comment on three FCC notices of proposed rulemakings on the future of high-cost universal service support program have 2 more weeks to file. An already-delayed reply deadline for Monday was extended by the commission until June 2. On May 1, six groups jointly sought a 3-week extension to “develop well-considered and thorough responses,” the commission said. “We find, however, that two additional weeks is sufficient time for commenters to complete their reply comments.” So far only the Wisconsin Public Service Commission has replied, according to the electronic FCC docket. The state commission reiterated its interest in coordinating USF reform with intercarrier compensation reform. “Change for change’s sake is not a reasonable pursuit, and the [commission] urges the FCC to fully consider all relevant issues and intertwined implications that attach to major USF reform,” the PSC said.

AT&T saw nothing but industry support on its appeal of a Universal Service Administrative Co. audit. AT&T disputes a USAC order that eligible telecommunications carriers must report partial or pro-rata dollars for USF Lifeline subscribers who left the Lifeline program within the month they joined. AT&T said it doesn’t need to provide the information because it has never asked USAC for partial or pro-rata support. In comments filed Wednesday, USTelecom, Qwest, the Independent Telephone and Telecommunications Alliance, Embarq and Sprint Nextel supported the appeal. No one opposed it.

State regulators joined six telecom groups’ petition to extend the reply comments deadline on three FCC universal service proceedings (CD May 8 p10). In a Tuesday letter, the National Association of Regulatory Utility Commissioners backed the three-week extension. “NARUC’s member commissions have limited staff to parse through and analyze” all 1,000 pages filed in the USF proceedings by the May 19 deadline, NARUC said.

Kill the high-cost universal service fund identical support rule because it’s no longer sound policy, Sen. Byron Dorgan, D-N.D., said Wednesday in a letter to FCC Chairman Kevin Martin. It no longer makes sense for USF rules to tie competitive eligible telecommunications carriers’ support to what incumbent local exchange carriers receive, rather than ETCs’ own costs, the letter said. Nor is the reverse auction model the solution, the letter said. “Reverse auctions leave too many unanswered questions about stranded investment and the lack of incentive for a carrier to improve and expand their network, let alone maintain their current systems,” Dorgan said. “With winning bidders receiving the least amount of universal service support, this would in all likelihood leave Americans living in rural and high-cost areas without adequate, affordable communications services.”