The Rural Utilities Service said eight telcos will share nearly $40 million in broadband loans. The companies and loan amounts are: Pembroke Telephone of Georgia for $11,954,000; three Illinois companies -- Alhambra-Grantfork Telephone for nearly $8.8 million, Woodhull Telephone for more than $3.4 million and Oneida Telephone for more than $2.6 million; Minburn Telephone of Iowa for more than $2.9 million; Zenda Telephone of Kansas for $2.95 million; Reservation Telephone of North Dakota and Montana for more than $2.29 million; and Medicine Park Telephone of Oklahoma for more than $4.2 million. The RUS said it was reviving its broadband loan program earlier this year but there had been some concerns about taking out the loans because of uncertainty over the FCC’s proposed Universal Service Fund and intercarrier compensation regime changes (CD March 25 p5).

The FCC should give Alaska a separate “transition path” for Universal Service Fund reform, General Communication said in comments posted to dockets 10-90, 09-51, 07-135, 05-337, 01-92, 96-45 and 03-109. “Alaska’s telecommunications networks are like none other in the country, and face challenges of distance, climate and supporting infrastructure unlike anywhere else in the United States,” General Communication said. Despite the company’s “substantial rural wireless deployments in 2009 and 2010, much of rural Alaska is still waiting to receive the 2G mobile voice services that the rest of the country has enjoyed for over a decade,” General Communication said. The National Broadband Plan recommended that the commission focus on broadband speed of 4 Mbps down and 1 Mbps up, but “those objectives will never be achieved in Alaska without hundreds of millions of dollars in capital investment,” General Communication said. Only “a fraction of Alaska has access to broadband with maximum advertised speeds of 3-6 Mbps for downloads and .786-1.5 Mbps for uploads,” the company said. “At a time when all indications show that achieving the Commission’s broadband objectives in Alaska will require several hundred million dollars in support just for capital investments, let alone operating costs, the interim proposals for both ILEC and CETC support would slash support for Alaskan telecommunications and broadband deployment,” General Communication said. If the FCC adopts all of the proposals for USF reform in its rulemaking notice, Alaska would lose about 75 percent of its universal service support by 2016, General Communication said. “Meanwhile, because of the way that the proposed interim Connect America Fund and Mobility Fund would be structured, virtually no funds from those new mechanisms can be expected to support Alaska telecommunications and broadband deployment services,” General Communication said. “Rural Alaska will never win a nationwide reverse auction pegged at supporting the lowest dollar per user deployments because Rural Alaska is both high cost to serve especially to connect over the middle mile and has extremely small population centers.” The better course is to preserve “existing support” for all eligible telecommunications carriers and high-cost programs on Tribal Lands “during the interim, and then move directly to a long term (not first phase) reformed Connect America Fund ('CAF'), as long as it can be tailored to Alaska’s unique challenges,” General Communication said.

Public safety spending on 700 MHz D-block lobbying more than quadrupled in Q1 2011 compared to the same quarter last year, according to Q1 lobbying reports. The Association of Public-Safety Communications Officials spent $80,563, 303 percent more than what the group spent in Q1 2010 and 66 percent more than Q4 2010. Meanwhile, the National Telecommunications Cooperative Association spent nearly five times what it did last year, and NTCA CEO Shirley Bloomfield said she expects the association of small rural telcos to continue spending at that level.

Excluding satellite broadband from the Connect America Fund would inflate the fund by as much as $21 billion, said ViaSat and its subsidiary WildBlue in a filing at the FCC. The filing was on the universal service fund proceeding in docket 10-90 and is separate from comments the companies filed with other satellite broadband providers in the docket (CD April 20 p5). The ViaSat filing includes a study that says exclusion of satellite broadband providers from bidding on serving regions would eliminate competitive pressures and deny “the economies of scale needed for satellite providers to extend coverage” to the highest cost areas, “ultimately forcing the Commission to subsidize much more expensive terrestrial providers in those areas. The FCC “should correct course to ensure that it can leverage all the substantial benefits that next-generation satellite broadband can deliver,” the filing said.

Many of the proposals for a Connect America Fund (CAF) rulemaking notice on universal service and intercarrier compensation are not competitively neutral, U.S. Cellular said in comments posted by the FCC Wednesday. “While the Commission makes a general assertion in the Notice that its proposal to support broadband is competitively neutral, many of its key proposals conflict with the Commission’s longstanding commitment to establish and manage universal service support mechanisms in a competitively neutral manner,” the carrier said. U.S. Cellular urged the FCC to look closely at a proposal the company has put in the record. “Adopting U.S. Cellular’s proposal would further President [Barack] Obama’s goal to invest in the next generation of high-speed wireless coverage for 98 percent of Americans, and would also ensure that CAF funding mechanisms are competitively neutral,” U.S. Cellular said. U.S. Cellular had particular concerns about a reverse auction proposal in the rulemaking. “The Commission lacks statutory authority to adopt a single-winner reverse auction mechanism because such a mechanism would not comport with the mandate of the Telecommunications Act of 1996 to promote local competition, it would require extensive regulation (contrary to the Commission’s claims), and it would not be consistent with principles established in Section 254(b) of the Act,” the carrier said. T-Mobile also weighed in, commenting on the potential effect for wireless. “Advancing the deployment of mobile voice and broadband networks should be a specific priority, and competitive and technological neutrality should be guiding principles of reform. Further, there should be uniform requirements for federal support recipients, and vague and varying state carrier of last resort requirements should not be imported into them,” T-Mobile said.

FCC Chairman Julius Genachowski reiterated the importance of holding voluntary, incentive auctions as an available tool to free up more spectrum, during a Q-and-A with David Rubenstein, co-founder of the Carlyle Group, at the Washington Economics Club Wednesday. The FCC is focused on tackling two big spectrum issues: How to free up more spectrum and how to reduce barriers to deploy infrastructure, Genachowski said.

The FCC’s proposal to revamp the Universal Service Fund and intercarrier compensation apparently could benefit some states while hurting others, according to comments in the proceeding. But states in general supported retaining and enhancing a state role in any rewrite. The FCC is expected to complete some of the USF overhaul by late summer (see separate report in this issue).

The FCC is on track to complete part of Universal Service Fund overhaul by late summer, FCC Commissioner Mignon Clyburn said Tuesday during a taping of C-SPAN’s The Communicators, scheduled to air over the weekend. Clyburn also said she has not prejudged AT&T’s proposed acquisition of T-Mobile, a deal on which the companies are expected to formally seek commission approval in filings Thursday.

With less than four months to go before an FCC-promised deadline for Universal Service Fund and intercarrier compensation regime reforms, industry appears to be divided on how to fix the system. The American Cable Association, for instance, said its “diverse and interested membership” meant the association “has had to navigate and balance strongly competing interests, while ensuring any policy proposals are in the public interest.” The FCC’s proposed rewrites at least “provide a good starting point to bring broadband to unserved areas, and, through refinements and targeted rebalancing, there is the potential to adopt reforms this year to reorient the High-Cost fund to improve efficiency and achieve universal broadband service,” ACA said in its comments. All comments were posted to dockets 10-90, 09-51, 07-135, 05-337, 01-92, 96-45 and 03-109.

The FCC should “immediately” tackle phantom traffic and traffic pumping but should provide “careful transitions” as it reforms the Universal Service Fund and intercarrier compensation regimes with “great care,” USTelecom said in comments posted to dockets 10-90, 09-51, 07-135, 05-337, 01-92, 96-45 and 03-109. “Until targeted universal service support provides sufficient explicit funding for networks in high-cost areas, any mandated rate reductions must be coupled with a reasonable opportunity for providers to replace the revenues lost … through a combination of increased retail rate flexibility and a supplement fund,” USTelecom said. USTelecom is leading talks to try to come up with an industry-wide reform. But the commission has made clear that it wants to move to orders on USF and intercarrier comp distribution by the end of the summer. “Intercarrier compensation reform must be accomplished by providing opportunities for carriers to replace lost revenues in order to allow the continuation of support for networks, particularly those in high-cost rural areas,” USTelecom said in Monday’s comments.