A recent audit that criticized the FCC for not following federal guidelines on tracking public spending (CD March 28 p11) “may come up” when Chairman Julius Genachowski testifies before a House appropriations subcommittee, said a spokesman for Rep. Jo Ann Emerson, R-Mo. The chairman of the subcommittee on Financial Services and General Government “is aware of the situation,” her spokesman said. Managers at both the FCC and the Universal Service Administrative Co. were recently ordered to “update and reinforce” rules for entering expenses into the federal accounting system, after outside auditors labeled the commission’s accounting system “a significant deficiency."

Attorneys general in New York and potentially other states will review AT&T’s plan to buy T-Mobile, they said. It’s uncertain if state regulatory commissions, which have limited authority over wireless mergers and played no role in previous wireless deals, would play a part, state officials and analysts said in interviews.

Netflix continues to gobble up bandwidth, but the company’s explosive growth still hasn’t threatened cable, said a study released Tuesday by analyst Bruce Leichtman.

The Rural Cellular Association and the Universal Service for America Coalition appealed the FCC’s Corr Wireless II order, claiming the commission jumped the gun when it determined that surrendered high-cost Universal Service Fund should lower a state’s cap for high-cost support. “USF is a critical issue for RCA members,” association President Steve Berry said in a news release. “It can mean the very survival of many smaller competitive carriers wishing to serve consumers in rural America.” RCA said the Corr order created an illegal “slush-fund.” The Universal Service Coalition, formed in 2008, includes Cellular One and Corr Wireless -- the competitive eligible telecommunications carriers who have been fighting to preserve their high-cost support since at least last year. Cellular One and other CETCs have accused Verizon, for instance, of padding its universal service bills by unlawfully including Alltel lines into its annual line count. Earlier this month, 13 CETCs -- including Cellular One and Corr -- accused the commission of violating the companies’ Fifth Amendment rights against illegal takings by reducing the interim cap (CD March 14 p2). The FCC is in the midst of a USF and intercarrier compensation overhaul. Rural operators have been the most vocal in their complaints about the proposed rewrite, saying that the FCC’s plans will leave them at the mercy of the telco giants. An FCC spokesman said the “reforms the Commission is proposing are long overdue and it is critical that we take action soon to streamline the system and cut wasteful spending. As part of that process, it will be essential for the Commission to appropriately redirect a percentage of the USF funding to broadband services to help modernize the program and better meet consumer demands into the future.” The appeal was filed in the D.C. Circuit, RCA spokeswoman Lucy Tutwiler said. “It’s a suit to ensure the FCC uses the funds that have already been collected for the purposes of which they were collected,” she said.

The Department of Commerce is 11 years late in transitioning Internet Assigned Numbers Authority (IANA) functions to the private sector, ICANN CEO Rod Beckstrom told the department in a letter Friday. ICANN’s contract with NTIA has remained “essentially unchanged” since the 2000 agreement and should be revised to ensure the stability and security of Internet functions, wrote Beckstrom. The letter was written in response to NTIA’s notice of inquiry last month about the renewal of ICANN’s IANA contract, which is to expire Sept. 30 (WID Feb 28 p2). Comments are due by the end of this week.

The Rural Utilities Service (RUS) is trying to drum up interest in its revived rural broadband loan program, but impending Universal Service Fund and intercarrier compensation overhauls are making some rural telcos leery about getting in line, some rural lobbyists said. The RUS expects to have up to $800 million available this year to offer to rural broadband projects. But “this program may be a vestige of an antiquated technology and an antiquated concept,” said Rural Cellular Association President Steve Berry. “It may well be the money can be used for better things.”

Two similar Texas bills would define VoIP and prohibit state regulation for IP-enabled services and VoIP. SB-980 also seeks to exempt telecom companies from reporting requirements. It and SB-985 are sponsored by Republican Sen. John Carona. SB-985 would codify standing state policy by explicitly exempting IP-enabled services and VoIP from state regulation regarding rates, services, terms, conditions or market entry, said Erika Akpan, a policy analyst for Carona. The PUC’s authority isn’t codified regarding VoIP, she said. And the commission has taken limited action in regulating VoIP, she said. It’s likely that as the bill progresses it will be revised to limit the exemption to apply to VoIP only, she noted. SB-985 clarifies that the proposed rules don’t affect payment of right-of-way fees on VoIP, local government codes, obligations for the provision of video service, or require or prohibit assessment of enhanced-911, relay access service or Universal Service Fund fees on VoIP. The version as filed made no distinction between retail and wholesale VoIP, but that may change as a result of ongoing discussions, Akpan said. Carona is confident that there’s significant support “on both sides of the aisle,” she said. Akpan noted a joint sponsor for SB-980, which contains SB-985, is Democratic Sen. Leticia Van de Putte. SB-985 says intercarrier compensation for VoIP, like switched access rates, shall be determined through FCC rules or commercial agreements, Akpan said. The provision is under discussion, she said. SB-980 also requires VoIP or IP-enabled services’ payment of access rates or other intercarrier compensation rates, to be determined through commercial agreements or by the FCC, said Glenn Richards, head of the VON Coalition. The bills wouldn’t conflict with the FCC’s efforts to revamp USF and intercarrier compensation, he said. At least 17 other states have already provided certainty to investors by codifying regulatory “safe harbors” for VoIP or IP-enabled communications, he said. SB-980 also seeks to prohibit state regulators from expanding additional extended area service for local calling, and provides ILECs the option of maintaining or withdrawing tariffs. It seeks to eliminate filing requirements that the sponsor feels are outdated or unnecessary, like customer specific contracts and earnings reports, and updates the statute to reflect competition with modifications to tariffs requirements, extended area services and VoIP services. Adoption of either bill would offer the state an innovation platform for improved broadband, increased competition and infrastructure investment, and accelerated broadband deployment, Richards said. It’s critical that state and local regulation not burden such innovation, he said. The bills recognize and retain federal preemption of state and local regulation, he said.

Two similar Texas bills would define VoIP and prohibit state regulation for IP-enabled services and VoIP. SB-980 also seeks to exempt telecom companies from reporting requirements. It and SB-985 are sponsored by Republican Sen. John Carona.

The FCC should match funds to its “specific broadband objectives” as the commission moves ahead with Universal Service Fund and intercarrier compensation reform, USTelecom and other telcos said in a meeting with commission staff. Windstream’s Michael Rhoda and Eric Einhorn, AT&T’s Joel Lubin, Verizon’s Maggie McCready and USTelecom’s Jonathan Banks met with staff Thursday, according to Banks’ ex parte notice. It was posted Tuesday to docket 10-90. “We discussed the need for a fund designed to support explicitly the delivery of broadband and voice services in high-cost areas as efficiently as possible and stressed the importance of matching funding with the specific broadband objectives that would be contemplated by such a fund,” the filing said. While the lobbyists recognize the need for “careful transitions” to a broadband fund, “relatively rapid movement to reform … would help provide certainty to industry,” it said.

ORLANDO -- FCC Chairman Julius Genachowski offered no comment on AT&T’s proposed acquisition of T-Mobile, made public Sunday afternoon (CD Bulletin March 21), in a keynote speech Tuesday at CTIA’s annual meeting. Instead, he made a major pitch for incentive auctions and explained the importance of the data roaming order teed up for a vote at the April 7 FCC open meeting. “I know everyone here had been talking about the proposed transaction that was just announced,” Genachowski told a standing-room-only crowd. “Of course, you'll understand that I'm not going to comment on it.” He didn’t have time to take questions from reporters, an aide said.