The House sponsors of last year’s Universal Service Fund overhaul bill support the FCC acting on the industry USF agreement brokered by USTelecom. Rep. Lee Terry, R-Neb., no longer plans to move USF legislation, aide Brad Schweer told us Wednesday. He said that Terry “will now be encouraging the FCC to produce details that reflect suggestions” proposed by the industry group. Terry’s former co-sponsor Rick Boucher agreed that the commission should move forward on its own.

Google wants “rapid and decisive FCC action” to retool the Universal Service Fund for broadband, but has some reservations about “backward-looking incentives” in telco proposals for reform, Google said in an ex parte notice filed on docket 10-90 (http://xrl.us/bk3xx6) and released Tuesday. “We noted the overly-lengthy proposed transition periods to more cost-based traffic termination rates, and the negative impact of recommendations to extend, for the first time, the antiquated carrier access charge regime to voice over Internet protocol applications,” Google said in its ex parte. Google Director Richard Whitt conveyed his message in a phone chat with Zac Katz, FCC Chairman Julius Genachowski’s top wireline adviser, and Michael Steffen, FCC special counsel. The conversation took place on Thursday, one day before six large incumbents filed an agreement on reforms. The system can be overhauled in three years, Google said in its notice.

Nearly all of the telcos that have borrowed from the Rural Utilities Service receive high-cost Universal Service Fund support, RUS said in an analysis (http://xrl.us/bk3xqr). Of the 480 companies that have borrowed for telecom infrastructure, 476, or 99 percent of them, receive interstate universal service cash, the RUS said. More than 70 percent of RUS’ borrowers rely on universal service for more than a quarter of their operating revenue, RUS said. A 5 percent reduction in universal service cash would strand some 98 borrowers, representing nearly $794 million in loans, RUS said. The three largest rural telecom associations, calling themselves the Save Rural Broadband alliance, seized on the RUS filing, saying it was “independent confirmation of a point Save Rural Broadband has long argued -- the FCC’s USF reforms will force many rural broadband providers to either delay their deployment of broadband services or go out of business.” Rural carriers made a separate peace with bigger incumbents last week and filed a “complementary” brief with the USTelecom-brokered industry agreement (CD Aug 1 p1). A spokesman for the three associations said the RUS filing had no bearing on the incumbent compromise.

Google wants “rapid and decisive FCC action” to retool the Universal Service Fund for broadband, but has some reservations about “backward-looking incentives” in telco proposals for reform, Google said in an ex parte notice filed on docket 10-90 (http://xrl.us/bk3xx6) and released Tuesday. “We noted the overly-lengthy proposed transition periods to more cost-based traffic termination rates, and the negative impact of recommendations to extend, for the first time, the antiquated carrier access charge regime to voice over Internet protocol applications,” Google said in its ex parte. Google Director Richard Whitt conveyed his message in a phone chat with Zac Katz, FCC Chairman Julius Genachowski’s top wireline adviser, and Michael Steffen, FCC special counsel. The conversation took place on Thursday, one day before six large incumbents filed an agreement on reforms. The system can be overhauled in three years, Google said in its notice.

The FCC’s E-Rate program needs better rules to define eligibility, improve efficiency and transparency, State E-Rate Coordinators Alliance Chairman Gary Rawson told us. The program is successful, but in a minority of cases, the process is “significantly more complex, frustrating, and ultimately self-defeating,” the group said in an ex parte filing at the FCC.

A House GOP freshman wants to stop giving free cellphones to the poor under the Universal Service Fund Lifeline/Link-Up program. Rep. Blake Farenthold of Texas is introducing legislation to end the subsidy as part of House Republicans’ YouCut campaign, he said on a YouTube video posted last week (http://xrl.us/bk3ufh). “This cellphone program is growing” and GAO has warned of “waste, fraud and abuse,” Farenthold said. The bill hasn’t been introduced, and his office didn’t respond to a request for comment.

Rural Cellular Association President Steve Berry sharply criticized the Universal Service Fund/intercarrier compensation proposal formally filed by a U.S. Telecom-organized group of carriers at the FCC Friday (CD Aug 1 p1). He argued it’s a wireline-centric plan that largely leaves wireless in the cold. Berry called the proposal “a joke.” RCA represents small to mid-sized carriers. Satellite broadband companies, who also were not part of negotiations on the proposal, also criticized it Monday. Consumer groups and states’ rights advocates expressed concerns, while executives representing small and mid-sized cable operators expressed support for elements of the plan.

Incumbent telcos were able to bang out an agreement on the Universal Service Fund and intercarrier compensation regime reforms after months of negotiations. The rest of industry said the real debate has only begun. The USTelecom-brokered agreement won a last-minute okay from the three biggest rural telecom associations Friday. Left out of the discussions, though, were cable, CLECs, states’ rights and consumer advocates, many of whom were already slinging arrows at Friday’s announcement. CompTel, XO Communications, NARUC, NCTA, Sprint Nextel and the Rural Cellular Association all issued statements praising the agreement as a step forward but raising substantive questions about the deal.

The FCC late Wednesday summarily dismissed 50 separate E-rate funding appeals, because they weren’t filed on time at the Universal Service Administrative Co., the commission or both. The losing districts stretched from Leominster School District in Leominster, Mass., to Gallup-McKinley County School in Gallup, N.M.

"The odds favor” the FCC adopting the USTelecom-brokered agreement on the Universal Service Fund and intercarrier compensation regime reforms, MF Global analyst Paul Gallant said Thursday. The so-called framework could be filed as early as Friday (CD July 28 p8). It “would be a neutral-to-positive” for publicly-owned, mid-sized rural carriers such as Frontier, CenturyLink and Windstream, Gallant said. “We also believe the plan would be a boost for AT&T and Verizon by reducing their overall payments into the federal and state subsidy mechanisms.” Despite some opposition, he expects the commission to adopt the USTelecom-brokered deal more or less as-is because FCC Chairman Julius Genachowski has made USF and intercarrier comp reforms “a centerpiece of his National Broadband Plan” and the framework “would redirect federal subsidies from voice to broadband buildout, which is what the Broadband Plan called for.” Also, he said the proposal “has the support of a strong coalition” and Gallant “would not be surprised if it gained additional support” in the next few weeks, and “key legislators have indicated that the FCC is better suited than Congress to reform USF/ICC because of the level of detail required for reform. Congress’s key asks are that rural and urban interests are both clearly recognized, and that the overall USF … not grow larger -- and ideally shrink over time. We think the FCC’s final rules this Fall are likely to satisfy those criteria."