The FCC is likely to get the Universal Service Fund revamp done in 2011, panelists said during a Regulatory 2.0 workshop Thursday. Congress should give the FCC as much flexibility as possible as it considers legislation giving the commission authority for incentive auctions for broadcast and other spectrum, they said.

FCC Chairman Julius Genachowski has asked cable lobbyists about what the commission should do with carrier of last resort (COLR) obligations as it contemplates universal service reform, cable executives told us Wednesday. Wireline staff have also asked questions about whether cable companies would be willing to go through the eligible telecommunications carrier process if the commission gets rid of the provision for ILEC right-of-first refusal in the proposed America’s Broadband Connectivity plan, executives said in a reporters’ briefing Wednesday at NCTA headquarters in Washington.

Some proposals contained in the FCC’s Universal Service Fund/intercarrier compensation rulemaking notice released Feb. 9 may hurt broadband services in the most rural areas of North Dakota, the state’s regulators wrote the FCC. Any abrupt elimination or reduction of funding for infrastructure without a reasonable opportunity for carriers to recover their investments would have serious repercussions on the availability, affordability, and/or quality of broadband services for rural consumers, the Public Service Commission said. It urged the FCC to ensure that any actions won’t undermine states’ interests in protecting consumers.

CTIA said any Mobility Fund created as part of FCC Universal Service Fund reform must be sufficient to meet the needs of wireless subscribers in high-cost areas. The remarks came in meetings with various FCC officials, including aides to all four FCC commissioners (http://xrl.us/bmc7ou). CTIA did not file reply comments in the USF rulemaking, though it did offer initial comments questioning whether the $300 million proposed for the fund in the ABC Plan is adequate (CD Aug 25 p8). CTIA again questioned during the meetings whether proposed funding levels are sufficient. “Consumers are rapidly migrating to mobile broadband, and a sufficient mobility fund that ensures that Americans have access to those services is consistent with the goals of Congress, the National Broadband Plan, and the Commission,” CTIA said. “In determining the appropriate size of a proposed Mobility Fund, the Commission must engage in a fact-based analysis and take account of the fundamental nature of mobile networks, which must be available wherever Americans live, work, and travel.” CTIA’s two biggest members, Verizon Wireless and AT&T support the ABC Plan and CTIA has been relatively quiet on the issue (CD Aug 25 p1). CTIA officials were last at the FCC in July to discuss changes to the USF, according to on ex parte filings at the agency.

The incumbent-backed America’s Broadband Connectivity plan is flawed because it retains the rate-of-return system, gives incumbents the right of first refusal for universal service funds, and doesn’t address the nation’s broadband adoption gap, Blair Levin of the Aspen Institute said Monday. Speaking at a roundtable sponsored by the Minority Media and Telecom Council, Levin criticized the $300 million set-aside for wireless carriers, which he called “the wireless dividend,” and blasted the Department of Agriculture for asking the FCC to guarantee Rural Utilities Service loans, which he said creates “horrible false incentives.”

The incumbent-backed America’s Broadband Connectivity plan is flawed because it retains the rate-of-return system, gives incumbents the right of first refusal for universal service funds, and doesn’t address the nation’s broadband adoption gap, Blair Levin of the Aspen Institute said Monday. Speaking at a roundtable sponsored by the Minority Media and Telecom Council, Levin criticized the $300 million set-aside for wireless carriers, which he called “the wireless dividend,” and blasted the Department of Agriculture for asking the FCC to guarantee Rural Utilities Service loans, which he said creates “horrible false incentives.”

A mid-sized cable operator worries about worsening arbitrage among interexchange carriers for phone traffic claimed to be Internet Protocol-based that really isn’t, if the FCC adopts the Universal Service Fund reform plan proposed by major phone companies. Midcontinent Communications said CEO Patrick McAdaragh told Commissioner Robert McDowell and Sen. John Thune, R-S.D., about those concerns in a meeting in Sioux Falls. “Midcontinent already feels significant impact from rate arbitrage resulting from phantom traffic” and from what it called traffic pumping, said a filing posted Thursday to docket 10-90 (http://xrl.us/bmcw5q).

Sprint Nextel, on behalf of affiliate NPCR, notified the FCC it will relinquish NPCR’s eligible telecommunications carrier designation in Alabama, Georgia, New York, Pennsylvania and Virginia, effective Dec. 31 (http://xrl.us/bmctfw). NPCR has operated as an ETC in those states since 2006. The development is part of Sprint’s agreement with the FCC to reduce the amount of Universal Service Fund support it receives. NPCR intends to continue to offer service as a non-ETC in the states.

The FCC should follow the industry, state government and public interest commenters that reject the universal service fund reform plans brokered by incumbent local exchange carriers, which represent the “parochial interests of a very narrow industry segment,” said satellite broadband providers in joint comments (http://xrl.us/bmcq7u). The providers, which include Spacenet, ViaSat and ViaSat’s subsidiary WildBlue, Dish Network, its sister company EchoStar, and EchoStar subsidiary Hughes, filed reply comments in docket 10-90 on USF proposals. (See separate story this issue). Suggestions that satellite broadband is inferior to terrestrial are based on satellite offerings that are congested due to oversubscription, they said. Coming ViaSat and Hughes high-throughput satellites will add speed, quality and capacity, they said. Satellite broadband will meet the requirements of the program and has been recognized by the agency as qualified for universal service support, they said.

Wireless carriers other than AT&T and Verizon Wireless, which signed the ABC Plan for Universal Service Fund and intercarrier compensation reform, hope to win concessions as proposed changes to the program move forward at the FCC. With the wireless industry presenting a divided front, it’s unclear how much leverage smaller wireless carriers will have and what changes they will be able to push through at the commission.