Responding to a petition by the American Public Communications Council (APCC), the FCC clarified part of its universal service rules as they apply to payphone providers. The FCC denied an APCC request to reconsider requiring independent payphone providers to contribute to the Universal Service Fund (USF). However, it agreed to clarify that if an independent payphone provider purchased telecommunications for resale and contributed directly to the Universal Service Fund (USF), it shouldn’t be subject to the “pass-through” of universal service contributions by interexchange carriers and LECs. “Allowing such a practice results in a double burden for payphone providers that use resold telecommunications services,” the FCC said. The action came as the FCC considered numerous petitions for reconsideration of 2 universal service orders. In an order issued Nov. 29, the FCC denied most of the petitions either because the FCC said they raised no new facts or were moot. However, the FCC also clarified, in response to a request by the Wireless Cable Assn., that MDS licensees aren’t required to contribute to the USF on the basis of revenue derived from broadcasting services. The FCC also clarified that MDS licensees that provide interstate telecom services to others for a fee on a non-common carrier basis aren’t exempt from contribution requirements. The FCC clarified for CTIA that mobile carriers are required to report as end-user revenues the proceeds they gain from providing telecommunications to entities qualifying for the so-called “de minimis exemption.” However, they don’t have to identify individually the resale customers qualifying for the exemption. The exemption applies to carriers whose telecom activities are so small their contributions would be “de minimis.” Among those denied was a petition by Mobile Satellite Ventures for reconsideration of a decision that all ‘pure’ resellers were ineligible for universal service support. MSV had argued that resellers should be eligible for support when they resell the services of a facilities-based carrier that isn’t a recipient of universal service subsidies.
State regulators don’t see a VoIP-like FCC preemption of broadband over power lines (BPL), said Mich. PSC Comr. Laura Chappelle, who heads the NARUC BPL task force. “I don’t see the FCC or FERC [Federal Energy Regulatory Commission] as overly anxious to jump and try to preempt BPL,” she told us. The task force is in the final stages of its BPL inquiry and expects to present a white paper to NARUC by Feb., she added.
Congress left town without acting on some telecom bills, but also left a window of opportunity for telecom- related legislative measures to move in Dec. Congress finished its most important work -- the omnibus appropriations bill -- and set time to allow work to continue on intelligence reform, meaning there’s a chance telecom actions could be taken as well. Congress this weekend did approve the Satellite Home Viewer Improvement Act (SHVIA) and the Senate approved FCC Comr. Adelstein for a 2nd term (CD Nov 21, Special Report). The omnibus appropriations bill also included a ban on the FCC’s imposing a USF “primary line restriction” and an exemption of AT&T from collecting fees on calling card use.
The prospects for FCC Comr. Adelstein to be renominated to the Commission appeared bright Thurs. after his hearing before the Senate Commerce Committee. Senators from both parties praised his attention to rural issues and Committee Chmn. McCain (R-Ariz.) told reporters afterwards that he expected Adelstein’s nomination to pass.
Senate Appropriators have agreed to add language to appropriation legislation that would forbid the FCC from adopting a primary-line restriction for the universal service fund, a Senate source told us. The language in the Commerce Justice State portion of the Omnibus Appropriations Bill would prevent the FCC from spending any money to enact a primary-line restriction. The FCC’s Joint Federal-State board on USF reform recommended earlier this year that the FCC give USF funding only to the primary line that delivers service to consumers. The recommendation is strongly opposed by rural groups. Several sources said this week that it was very likely that the amendment would be included in appropriations language.
Rural House members seeking to raise the profile of telecom issues used an informational hearing on Wed. to grill a USDA Rural Utility Service (RUS) representative on broadband loan policy. Curtis Anderson, RUS deputy administrator, received most of the attention from lawmakers at the first hearing by the Congressional Rural Caucus'(CRC) Telecom Task Force. While the stated purpose was to explore the telecom challenges facing rural America and educate rural members on telecom issues, several members came in with an understanding of RUS’s loan programs and some expressed their concerns to Anderson.
Several important communications-related items could pass Congress this week as it returns for a brief lame- duck session, industry and congressional sources said. The loudest buzz is on the universal service fund (USF) and the controversy over the FCC’s change in accounting mechanisms that could slow some E-rate payments and possibly lead to a rise in contributions, and several sources expected some efforts to push a legislative solution.
More groups are urging Congress to pass legislation that would exempt the universal service fund (USF) and E- rate programs from Anti-Deficiency Act (ADA) account requirements. Several groups joined NTCA -- which sent letters Mon. -- in sending letters to the Hill urging a legislative fix in the lame-duck session scheduled to start Nov. 16. By applying the ADA rules to USF, the FCC forced the Universal Service Administrative Company (USAC) to withhold millions in E-rate funds until cash flow issues can be corrected. These groups also said the accounting change could affect USF programs and force USAC to raise USF contribution levels. NARUC told Senate Commerce Committee Chmn. McCain (R-Ariz.) that USAC already has been forced to hold $460 million in E-rate funding. “It is our strong view that applying the accounting standards contained in these acts does nothing to stabilize the fund or promote the goals of universal service, and in fact jeopardizes the stability of the fund,” NARUC said. These groups urged action before the congressional session’s end. NARUC also said USF should also be exempted from the Miscellaneous Receipts Act, even though the Office of Management & Budget ruled that the Act’s not applicable to USF. NARUC noted that the Federal Highway Fund and Fish & Wildlife Service were also exempt from ADA. Joining NTCA and NARUC were OPASTCO, the Independent Telephone & Telecom Alliance, the Rural Telecom Group and the Western Telecom Alliance.
Vonage’s DigitalVoice VoIP service is interstate so it can’t be regulated by state PUCs, the FCC ruled Tues. The ruling, which asserts federal jurisdiction over Vonage-like services, came in response to a preemption petition filed last year by Vonage. Although referring to Vonage service, the decision applies to other types of IP- enabled services, the Commission said.
USTA is urging Senate Appropriations Chmn. Stevens (R-Alaska) and Sen. Inouye (D-Hawaii) to include language in omnibus appropriations legislation that would exempt the Universal Service Administrative Corp. (USAC) from the Anti-Deficiency Act. Stevens and Inouye will likely be next session’s Senate Commerce Committee chmn. and ranking Democrat. Congress will return for a lame-duck session next week, where completion of the remaining appropriations bill will be a top priority. The anti- deficiency act (ADA) provision will cause USAC to “radically change the timing” for distributing USF funds, USTA said. In a letter sent Mon., USTA Pres. Walter McCormick said the ADA requires USAC to have funds on hand before committing them to particular programs. The FCC’s ruling has already caused USAC to delay new E-rate funding commitments, McCormick said. To make future commitments, USAC may need to raise USF contributions to 12.5% of interstate revenue from 8.9%, he said. “Of deep concern to USTA is the fact it is possible that a similar interpretation of the applicable rules could be applied to the high cost, low income and Link Up programs. If that occurs, USAC would likely have to suspend the High Cost program for three to six months to collect adequate funds going forward. In addition, the first quarter Contribution Factor could climb to 25% of interstate revenues, significantly impacting our members and customer bills,” McCormick said: “Unless Congress acts quickly, this situation could further undermine the stability of the nation’s universal service fund. Meanwhile, OPASTCO sent an alert to its members urging them to ask congressmen and senators that serve their communities to support legislation to exempt the universal service program from the ADA. OPASTCO is part of a coalition of groups trying to resolve the issue. Another coalition member, the Alliance for Public Technology (APT), circulated a letter to other public interest groups, asking them to sign it. The letter asks for swift action by the House and Senate Commerce Committees to solve the problem. “This problem will have widespread consequences if it is not addressed immediately,” APT told other groups in urging them to sign: “We must not allow unintended administrative flaws to get in the way of a program as vital to our country as E-rate.”