FCC was justified in setting new universal service fund at $650 m...

Court, New Orleans (CD Sept 12 p5). Court told FCC it hadn’t provided enough justification for size of fund and said it wasn’t enough that CALLS coalition recommended it. Coalition said picking CALLS number, based on AT&T study, was justified: (1) “by the interim nature of the proposal.” (2) because it represented agreement of “diverse group of ILECs and IXCs.” (3) because higher fund levels recommended by other parties would be difficult to adjust in future. On last point, CALLS group said universal service funding level probably would require adjustment after 5-year period specified by FCC, and adjusting AT&T figure upward would be easier than adjusting high figure downward. Coalition emphasized that court asked only for explanation of why figure was picked and didn’t “require the FCC to now divine a precise ‘correct’ amount of support.” Qwest, which wasn’t member of CALLS, told Commission $650 million was “insufficient to replace the support that was implicit in interstate access charges prior to the implementation of the CALLS order.” Thus, said Qwest, new fund “fails to comply with the requirement that the Commission replace implicit subsidies with universal service support that is ’specific, predictable and sufficient.'” Qwest said “synthesis model” FCC uses to determine universal service high cost support “indicates that the support mechanism should be at least $950 million.” Competitive Universal Service Coalition, composed of wireline and wireless competitors, said FCC should consolidate that issue with consideration of “broader issues regarding the structure of the high-cost support plan” that was mandated by 10th U.S. Appeals Court, Denver, in another case. Group said $650 million fund created in CALLS order “bears no relationship to the statutory directives of ensuring ‘affordable’ and ‘comparable’ rates.” Broader review would “ensure that the universal service system fully complies with the Act,” it said.