National Telecom Co-op Assn. (NTCA) told FCC it opposed proposal submitted by Ad Hoc Telecom Users Committee, AT&T, E-commerce Telecom Users Group and WorldCom to revise way Universal Service Fund (USF) contributions are collected (CD Nov 20 p1). In Dec. 21 letter to FCC Chmn. Powell, NTCA said proposal’s goal seemed to be to relieve long distance companies “of their obligation to make equitable contributions” to USF. That is “in direct violation” of Sec. 254 of Telecom Act that requires all interstate carriers to contribute on equitable basis, NTCA said. “The proposal is couched as a plan to replace the current USF assessment mechanism with a flat-rated per-line charge,” wrote NTCA CEO Michael Brunner. “It is more than that,” he said: “If adopted, the class of carriers providing interexchange services such as those provided by AT&T and WorldCom would have no obligations to contribute to the mechanisms.”

Increased deployment of fiber lines for broadband and other uses has expedited need for rights-of way (ROW) fee reforms, govt. appraisers and telecom industry officials said Tues. at forum sponsored by Appraisal Institute. Federal govt. has been reassessing its ROW fee schedule since 1995 review by Interior Office of U.S. Inspector Gen. and 1996 General Accounting Office (GAO) audit. Bureau of Land Management (BLM) and U.S. Forest Service (USFS), which authorize ROW grants, adopted current rental schedule for linear ROW uses on National Forest System and public lands in 1986, and fiber lines aren’t part of that schedule.

Coalition of long distance companies and user groups proposed revising method of collecting Universal Service Fund contributions from carriers, approach that could please some in industry, dismay others. Proposal, outlined to news media Mon. and submitted to FCC in Nov. 7 ex parte letter, was put forward by AT&T, WorldCom, E-commerce Telecom Users Group (ETUG) and Ad Hoc Telecom Users Committee. It would replace revenue-based contribution scheme with flat-rate per- connection fee. Current system collects contributions from carriers for $5.5 billion USF based on percentage of carrier’s interstate revenues. Coalition members told group that current method was unfair to long distance companies that bore bigger share of it than other parts of industry.

Better Business Bureau’s National Ad Div. (NAD) ruled in favor of AT&T in ad dispute with Verizon. AT&T filed complaint in spring saying Verizon’s long distance ads were deceptive because they didn’t indicate consumers had to pay Universal Service Fund (USF) fee. Ads, which since have been changed, touted Verizon’s 10 cent per min. plan and said there are “no hidden charges,” claim AT&T challenged because USF fee wasn’t disclosed. Verizon contended it didn’t need to reveal USF fee because it was tax-like surcharge and consumers knew about it. NAD said it was “concerned that the commercial at issue failed to disclose what NAD believed to be material information to the consumer.” It said USF charge varied from month to month depending on size of consumer’s long distance bill and “had the potential to significantly affect the total monthly charges.” As result, “disclosure was required,” NAD concluded.

AT&T filed formal complaint with N.Y. Attorney Gen. Office alleging Verizon long distance advertising contained 2 misleading claims. AT&T in its complaint about Verizon’s plan that offers 10 cent per min. rate at any time of day without “hidden charges,” alleges Verizon’s imposition of 6.89% universal service fund (USF) fee on long distance bills is hidden charge. AT&T contends USF is Verizon’s passthrough to customers of FCC’s universal service assessment, but isn’t tax because Verizon isn’t required to pass burden on to customers and USF charge is billed with services, not with taxes. AT&T also charged that Verizon’s claim to always give customers its best price was misleading because fine print said promise applied only if prices were cut in customer’s current calling plan, not if company offered lower price in different calling plan.

NARUC Telecom Subcommittee staff killed 5 proposed policy resolutions that: (1) Expressed NARUC support for policies that would facilitate availability of advanced services to all customers over multiple broadband networks. (2) Supported legislation providing loans or grants to encourage rapid deployment of broadband services in rural and other underserved areas. (3) Urged FCC to obtain full and accurate cost-benefit information before making any change in services to be supported by federal universal service fund. Those 3 were tabled indefinitely because states couldn’t agree whether they were necessary or what message they were supposed to send. Also killed were 2 resolutions relating to jurisdiction over Internet-bound traffic, offering made suggestions to FCC for clearing up jurisdictional confusion over Internet-bound calls. States decided the resolutions were premature because they assumed the states would lose their intended appeal of FCC remand order’s finding that Internet access was interstate.

N.H. legislature passed bill to require state’s PUC to conduct study into whether N.H. needed state universal service fund (USF) and, if yes, to propose rules for implementation. Measure (HB-402) doesn’t create state fund but was passed to provide legislature with information to be used in considering any future bill to authorize state USF. Measure directs PUC to assume that all intrastate telecom providers, including wireless phone and paging companies, will contribute to fund, that fund must provide support for low-income customers and may support public interest payphones at needed but unprofitable locations. Bill directs PUC to estimate costs and suggest services to be included in state universal service entitlement. It doesn’t specify timetable for PUC to conduct USF study

U.S. Appeals Court, D.C., sided with FCC twice Fri. in 2 separate rulings, backing regulations on pricing for traffic that travels between ILECs and paging companies and upholding unrelated order on formula for Universal Service Fund (USF). In first case, D.C. Circuit unanimously rejected petitions by LECs, including Qwest,, that sought to overturn agency’s interpretation of regulations that bar LEC from assessing charges on another carrier for local traffic that originates on LEC’s network. That case turned on Qwest challenge involving one-way paging company TSR Wireless, which Qwest had charged for dedicated transmission facilities needed to pass paging calls on to its customers. Court also struck down challenge by National Exchange Carrier Assn. (NECA) to FCC order on USF formula. It said NECA had failed to demonstrate Common Carrier Bureau decision to retain 1998 formula for calculating those payments was arbitrary and capricious.

S.C. PSC ordered 50% reduction of intrastate access charges for all incumbent telcos, effective Oct. 1, to reflect establishment of state universal service fund that will make universal service subsidies explicit rather than implicit. Cut will reduce access charges to 3 cents per min. from 6 cents. Interexchange carriers must pass along their shares of the $38.4 million annual savings through lower rates. PSC (Doc. 97-239C) also ruled that wireless carriers were exempt from paying contributions into state USF because they didn’t compete against wireline telcos. Agency said state law authorizing USF defined participating telecom providers as incumbents and those that competed against incumbents. PSC said there was no evidence that any wireless carriers competed against any wireline telco in state, so they were exempt from USF assessments, but also couldn’t receive payments from fund. Payphone providers’ assessments will be based on their end-user revenues only, and not also payphone access line providers’ charges, PSC said.

FCC approved proposal Tues. to explore whether and how to reform way agency assesses carrier contributions to Universal Service Fund (USF) and how carriers can recover such costs from customers. Notice of proposed rulemaking unanimously approved by Commission solicits feedback on continuing to require carriers to contribute to USF based on percentage of collected revenue or whether agency should move toward flat-fee alternative, such as per-line charge. Companies that have recovered universal service contributions from customers haven’t historically been held by FCC to particular cost recovery method, with agency instead generally requiring contributors not to shift more than “equitable” amount of contributions to any customer or group of customers. FCC said changes under examination are response to industry trends, including new entrants such as RBOCs into long distance market because contributions now are based on historical, not current, interstate revenue.