Rep. Ed Markey, D-Mass., supported an update of the Lifeline program under the Universal Service Fund as proposed Monday by FCC Chairman Julius Genachowski. Genachowski had said he would circulate a draft order on Tuesday (CD Jan 10 p1). “The Lifeline program has been a vital telecommunications tool for connecting low-income households to basic, affordable telephone service,” Markey said. “I strongly support modernizing the Lifeline program for the 21st century to support universal access to broadband Internet service for low-income Americans.” Markey also praised FCC efforts to stop waste and fraud in the program.

The National Exchange Carrier Association was granted leave to intervene in the pending federal lawsuits challenging the FCC’s Universal Service Fund reforms (Oct 28 p1). The order, dated Friday, was issued by the 10th U.S. Circuit Court of Appeals, which is hearing the consolidated litigation in the case. NECA now has until Jan. 16 to file its briefs, Friday’s order said (http://xrl.us/bmn8f9).

Arkansas-based RLEC Walnut Hill Telephone asked the FCC to reverse a Universal Service Administrative Co. decision to withhold nearly $448,000 in future universal service payments, the FCC said in a public notice Monday (http://xrl.us/bmn8de). USAC ordered the future payments to be withheld after a 2007 audit found that the company had improperly used high-cost Universal Service Fund cash to lease company cars, Walnut Hill said in its appeal (http://xrl.us/bmn8fa). The FCC has previously allowed companies waivers of accounting rules because they would have to incur unnecessary expenses otherwise, Walnut Hill said. Comments on Walnut Hill’s petition are due Feb. 8, replies Feb. 23.

Civil rights and “digital divide” erasure advocates gave mixed reviews to FCC Chairman Julius Genachowski’s Lifeline reform proposals Monday. As expected (CD Jan 9 p7), Genachowski promised what he called “cost controls” and “a budget” for Lifeline and Link-Up, with most of his efforts focused on rooting out some 200,000 duplicate claims and building a database to prevent future “waste.” The draft order will circulate Tuesday, Genachowski said.

The U.S. lags in broadband availability and adoption and faces capacity constraints for wireless, the Commerce Department said in a report to Congress released Friday. The report was required by the 2010 America COMPETES Act. It will take “additional support by the government and an appropriate policy framework to enable the private sector to build on the government’s support,” the report said. Broadband is “simply not available” in some parts of the country, particularly rural areas, it said. Broadband adoption also remains a problem, it said: “Large and disturbing differences in broadband adoption still persist by income, race and ethnicity, and education.” The NTIA’s broadband grants program under the American Recovery and Reinvestment Act “has been successful in extending broadband to under-served communities,” and the FCC recently revamped its Universal Service Fund to support broadband, the report said. Spectrum is an “important resource” and “a sensible policy for managing this spectrum is crucial if the United States is to improve its competitive position,” the report said. In the report, Commerce predicts a “spectrum crunch” in three to five years. “Techniques such as improvements in spectral efficiency, increases in network density through cell site construction, and offloading traffic to wireline networks will not be sufficient to allow capacity to keep up with demand,” it said. “Wireless carriers will not be able to accommodate this surging demand without access to additional parts of the spectrum.” Government must reallocate spectrum “from existing to more efficient uses,” it said. “One aspect of this reallocation is having Congress authorize the FCC to use auctions to reallocate spectrum from TV broadcasters to wireless broadband providers. This can also involve further research and development of technologies that enable more efficient use of spectrum.” Maintaining an open Internet is critical to a “sound ICT policy,” Commerce said. “Innovators need to be able to compete on their merits and not face anticompetitive barriers.” Addressing Internet privacy and cybersecurity is also important, it said. Federal investments in research, education and infrastructure were “critical building blocks for American economic competitiveness, business expansion and job creation in the last century,” the report said. There are various initiatives under way “to help companies process large amounts of data through cloud computing.” To succeed in the global economy, government must encourage students and workers to pursue education in science, technology, engineering and mathematics, the agency said. Under-investment in 21st century infrastructure “has diminished the nation’s competitive edge,” Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., said Friday. “Sustained federal investment … will not just help grow today’s economy, but it will also lay the groundwork for generations to come."

The U.S. lags in broadband availability and adoption and faces capacity constraints for wireless, the Commerce Department said in a report to Congress released Friday. The report was required by the 2010 America COMPETES Act. It will take “additional support by the government and an appropriate policy framework to enable the private sector to build on the government’s support,” the report said. Broadband is “simply not available” in some parts of the country, particularly rural areas, it said. Broadband adoption also remains a problem, it said: “Large and disturbing differences in broadband adoption still persist by income, race and ethnicity, and education.” The NTIA’s broadband grants program under the American Recovery and Reinvestment Act “has been successful in extending broadband to under-served communities,” and the FCC recently revamped its Universal Service Fund to support broadband, the report said. Spectrum is an “important resource” and “a sensible policy for managing this spectrum is crucial if the United States is to improve its competitive position,” the report said. In the report, Commerce predicts a “spectrum crunch” in three to five years. “Techniques such as improvements in spectral efficiency, increases in network density through cell site construction, and offloading traffic to wireline networks will not be sufficient to allow capacity to keep up with demand,” it said. “Wireless carriers will not be able to accommodate this surging demand without access to additional parts of the spectrum.” Government must reallocate spectrum “from existing to more efficient uses,” it said. “One aspect of this reallocation is having Congress authorize the FCC to use auctions to reallocate spectrum from TV broadcasters to wireless broadband providers. This can also involve further research and development of technologies that enable more efficient use of spectrum.” Maintaining an open Internet is critical to a “sound ICT policy,” Commerce said. “Innovators need to be able to compete on their merits and not face anticompetitive barriers.” Addressing Internet privacy and cybersecurity is also important, it said. Federal investments in research, education and infrastructure were “critical building blocks for American economic competitiveness, business expansion and job creation in the last century,” the report said. There are various initiatives under way “to help companies process large amounts of data through cloud computing.” To succeed in the global economy, government must encourage students and workers to pursue education in science, technology, engineering and mathematics, the agency said. Under-investment in 21st century infrastructure “has diminished the nation’s competitive edge,” Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., said Friday. “Sustained federal investment … will not just help grow today’s economy, but it will also lay the groundwork for generations to come."

FCC Chairman Julius Genachowski plans to circulate an order on the Lifeline program as early as Tuesday, telecom and commission officials told us. As Genachowski did with the high-cost portion of the Universal Service Fund last fall (CD Oct 28 p1), the coming order is expected to put Lifeline on what the chairman will call “a budget.” It will not formally cap the Lifeline portion of USF, telecom and FCC officials said. It’s expected to address eligibility requirements and how to remove people from the Lifeline rolls if they're not eligible, telecom officials said.

FCC Commissioner Robert McDowell expects Universal Service Fund reform to dominate the FCC’s agenda in the early part of 2012, starting with a Lifeline cleanup order at the Jan. 31 meeting. McDowell hopes that will be followed by an order addressing USF contribution issues left unsettled by last October’s order (CD Oct 28 p1), he said during an interview last week. McDowell said he remains open minded on a 700 MHz interoperability order and stressed the importance of spectrum efficiency. McDowell also thinks more media ownership deregulation than the FCC proposed in the quadrennial review may be needed.

The FCC should move quickly to streamline foreign ownership rules, said industry reply comments to an August rulemaking notice seeking feedback on the agency’s foreign ownership practices for common carrier and aeronautical radio licensees (CD Aug 10 p11). In the initial comment round, the Satellite Industry Association asked for changes, while the Justice and Homeland Security departments jointly expressed concerns (CD Dec 6 p14).

FCC Chairman Julius Genachowski Thursday named senior advisor Zac Katz as his new chief of staff, to serve for what is expected to be the final year or so of his chairmanship. Katz, Genachowski’s aide on wireline issues, was a top Genachowski aide behind the FCC’s approval in December 2010 of its controversial net neutrality rules, having spent a year working on that issue when he first got to the agency. Genachowski tapped Michael Steffen, of the Office of General Counsel, as his new wireline aide. Genachowski also elevated aide Sherrese Smith to chief counsel and gave aide Josh Gottheimer expanded responsibilities with a “focus on directing a new team at the Commission on public-private initiatives” building on his work on the Connect to Compete initiative. Katz and Wireless Bureau Chief Rick Kaplan had been considered the leading candidates for chief of staff since Eddie Lazarus announced in December he was leaving the commission, but Kaplan elected to stay at the bureau. Genachowski was considered all but certain to name someone already working for the commission because of the clearance issues involved with bringing in an outsider. FCC officials said Katz was Lazarus’s personal choice as his successor. “Mr. Katz has led a number of high-priority initiatives at the Commission, including the creation of the Connect America Fund, which brought sweeping reforms to the Universal Service Fund and Intercarrier Compensation programs,” the FCC said in a news release. “Mr. Katz has worked with technology companies at a strategy consulting and investment firm in Silicon Valley; developed an expertise on intellectual property, technology and media issues at a leading Los Angeles law firm; and worked in the White House.” He has been at the commission since 2009. The agency announcement does not mention net neutrality, a hot-button issue for Congressional Republicans.