A revamped Universal Service Fund should prioritize areas “without any broadband or where no provider offers service at a baseline level of transmission speed” determined by the FCC, said Senate Communications Subcommittee Chairman John Kerry, D-Mass., and Sen. Mark Warner, D-Va. In a Tuesday letter to FCC Chairman Julius Genachowski, the senators also urged that USF support broadband on a technology-neutral basis and include strong accountability and oversight. The fund should support “areas that are least likely to be built out over the next three-to-five years because their geographic and/or demographic profile make them insufficiently profitable based on commercial business models,” Kerry and Warner wrote. The FCC should annually update what constitutes a baseline level of service and “set goals for minimum target speeds for broadband that would be required to qualify for funding,” they said. To better target broadband funding, the FCC should require states to disaggregate study areas, the senators said. And the agency should cap spending “to provide an incentive for service providers to devise lower cost solutions that meet nationwide needs for both fixed and mobile broadband,” they said. “Funding should require a match from service providers and should be conditioned on reasonable access and interconnection requirements.

The Arizona Corporation Commission signed off on AT&T’s buy of T-Mobile, without a hearing. The deal is pending before state regulators in California, Hawaii, Louisiana and West Virginia. Meanwhile, both AT&T and merger opponent Sprint Nextel were at the FCC last week, for a series of high-profile meetings on the $39 billion transaction.

Large and mid-size telcos have moved closer together on Universal Service Fund and intercarrier compensation regime reforms, but several questions remain -- as does the gulf between small rural carriers and the rest of industry, the public record shows and FCC officials told us. Executives from USTelecom, Windstream, CenturyLink, AT&T and Frontier met with wireline advisers to three commissioners last week, USTelecom Vice President Jonathan Banks said in an ex parte notice filed late Friday. The executives were invited in by the staffers, two FCC officials said. The executives said they have agreed in principle to reforms that roll out in stages over several years, the officials said.

The FCC’s pending cramming notice of proposed rulemaking is couched as a wireline order, but also has a major focus on wireless, said agency officials who have seen the item and industry officials who have been told some of the details. Some proponents of bill shock rules worry that the wireless parts of the cramming order could be the replacement for proposed bill shock rules. When Chairman Julius Genachowski said he'd circulate a cramming NPRM last month (CD June 21 p6), he also indicated that final bill shock rules were on their way.

Rural telco associations are urging their members to swarm the FCC and Capitol Hill as part of an all-out effort to help shape the pending Universal Service Fund and intercarrier compensation regime reforms. “All three associations are working to get as many member companies to Washington, D.C., as possible over the next two or three months to pull out all the stops in conveying to policy-makers both their general concerns about reform as well as details on the specific impacts of the FCC’s reform proposals,” NTCA, OPASTCO and the Western Telecom Alliance told members in an email blast late last month.

The FCC should set up a separate broadband fund for native tribes or at least “provide a waiver” to telcos in Alaska and Hawaii when the Universal Service Fund is overhauled, advocates for natives said in a meeting with a dozen Wireline Bureau staffers. The advocates were Steve Marrieam of Arctic Slope Telephone Association Cooperative; Dave Dengel of Copper Valley Telephone Cooperative; Brenda Shepherd of Interior Telephone Company and Mukluk Telephone Company; Alan Pedersen of Waimana Enterprises and Jeffry Smith of GVNW Consulting, according to an ex parte notice released Tuesday on docket 01-92.

Payphone operators made another pitch for emergency Lifeline support from the FCC, an ex parte notice posted Monday said. “In light of the financial plight of [payphone service providers], there is a need for prompt Commission action before there is a further erosion in the base of installed payphones,” American Public Communications Council lawyer Al Kramer said during a meeting with Zac Katz, an adviser to FCC Chairman Julius Genachowski, and other officials. In the last two quarters, “another 50,000 payphones have been removed,” Kramer said, largely due to the expansion of wireless service under the Lifeline program. Although payphone operators “do not object to Lifeline support for mobile services, in many situations payphones can more efficiently and at a lower cost deliver services to a larger number of users than mobile services,” he wrote. Kramer told us staff “listened” to his appeal and seemed willing to “rethink Lifeline in a community context,” as his client is arguing. “But everybody emphasized that the Universal Service Fund is being rethought in a fundamental way and the emphasis is on broadband,” he said. Kramer also asked about longstanding petitions from payphone operators “regarding refunds of overcharges imposed … by the Bell Operating Companies,” said the filing in docket 96-128.

Northwest Open Access Network said its stimulus-funded broadband expansion project is expected to bring high-speed service to nearly every unserved community in Washington state. The $140 million broadband infrastructure would reach more than 170 communities and 2,000 schools, hospitals, emergency responders, libraries, colleges and universities.

A handful of rural rate-of-return telco executives took aim at the USTelecom-led efforts to create cost models for Universal Service Fund and intercarrier compensation regime reforms, an ex parte notice released Monday showed. USTelecom had brought in analyst CostQuest to create cost models as it continues to lead industry-wide talks on wholesale reform. CostQuest executives have been sitting in on ex parte meetings since at least May to discuss some of their findings (CD May 24 p14).

The FCC designated Standing Rock Telecom, a tribally owned wireless carrier, as an eligible telecom carrier (ETC), effective immediately. As a result, Standing Rock will be eligible to receive federal Universal Service Fund money to bring wireless service to the sparsely populated Standing Rock Sioux Tribe Reservation, which straddles the border of South and North Dakota. Additionally, the FCC held that redefinition of a rural telephone company service area is unnecessary when the ETC is designated throughout the rural service areas within the FCC’s jurisdictional authority (i.e. those rural telephone company service areas within Reservation boundaries). Therefore, unlike in the earlier Wireline Bureau ETC Designation Order, no state commission consent is needed before Standing Rock’s ETC designation takes effect, the FCC said.