A draft House bill on broadband stimulus spending would take away NTIA’s discretion to decide when to take back grants provided under the American Recovery and Reinvestment Act. The draft bill by Communications Subcommittee Chairman Greg Walden, R-Ore., also would speed delivery of reclaimed funds to the U.S. Treasury. But committee Democrats asked in a Democratic Commerce Committee staff memo circulated Wednesday among lobbyists why the bill is necessary.

CTIA marked the 15th anniversary of the Telecommunications Act on Tuesday by noting the huge job facing policymakers to keep up with growing demand for spectrum. The 1996 act was less important to the growth of wireless than were a succession of budget bills that led to major spectrum allocations and commercial auctions, said Jot Carpenter, vice president of government affairs, on CTIA’s blog. Policymakers need to concentrate on finding more spectrum for wireless broadband, he wrote. “Cell-splitting and efficiency gains are important, but insufficient to meet the explosive demand for ubiquitous access to high-speed mobile Internet connections,” Carpenter said. “Three recent mobile traffic studies (from Cisco, Coda and the Yankee Group) suggest that mobile data traffic will increase from 2009 levels by a factor of five by the end of this year, more than 20 times by 2013 and by 35 times by 2014.” AT&T Senior Vice President Bob Quinn observed how much the world has changed since 1996. “Your phone was only slightly smaller than your shoe,” he said in a separate blog post. “You watched movies on your VHS recorder, which had finally won the technology battle with Sony’s Betamax, although there was a new DVD technology just coming on the market. You may have finally purchased a car with a CD player but you probably still ran with a Walkman.” Quinn said the FCC’s approval of a proceeding that should reshape the Universal Service Fund is an encouraging development. “It truly is time to re-examine our communications priorities,” he said. “At AT&T, we think we should have a clear vision of where we are going. … The PSTN will ultimately go the way of the Betamax, the VHS player and the Walkman and we will understand that that is a good thing.”

The U.S. Chamber of Commerce is willing to explore how to make more spectrum available and reform the Universal Service Fund, President Thomas Donohue told FCC Chairman Julius Genachowski and his top two aides, said a filing posted Monday to docket 09-51. The Chamber said it agrees with the agency “about the importance of spurring the build out of broadband infrastructure across the” U.S.

The FCC took its first steps toward remaking the Universal Service Fund and the intercarrier compensation system Tuesday with a 5-0 vote in favor of a broadly worded rulemaking notice. The commission also voted to adopt a notice for a separate rulemaking that commission officials said will “streamline its data collection program” and eliminate “unneeded data collections that impose unnecessary burdens on filers.”

Ex-FCC official Blair Levin is singling out Commissioner Robert McDowell in Levin’s efforts to push the Universal Service Fund away from its traditional support for rural, wireline operators. “In his Wall Street Journal editorials and his Commission statements, [McDowell] has stated his fervent commitment to capitalism and free markets,” Levin said on the Innovation Policy Blog. “I was hoping he would take the same analytic view of universal service. After all, our current system of rate of return regulation -- a system born more than a century ago designed to serve a completely different market -- involves using the government’s power to assess consumers to subsidize private companies and insure their permanent profitability, no matter what changes in technology or consumer preferences there are in the market.” It’s hard to know how to characterize the current system, Levin said: “But you can’t call it capitalism or the free market at work.” Levin told us, “Rob McDowell goes into The Wall Street Journal and talks about free markets, free markets, free markets. He has watched millions of dollars be spent and not said anything.” The FCC has to say at some point, “Here’s what the end point looks like,” Levin said. The McDowell office declined to comment Monday since a USF overhaul proposal is on the sunshine agenda for Tuesday’s open meeting.

Congress is unlikely to move quickly on a Universal Service Fund overhaul, industry and FCC officials said. The commission is scheduled to take up Tuesday a broadly worded rulemaking notice on the high-cost fund and the intercarrier compensation system. Chairman Julius Genachowski and his staff made clear Monday that the commission is taking a long view of the revamp, with a senior FCC official calling it “a multiyear project.”

The FCC’s year ahead “looks far more encouraging,” with the commission taking on Universal Service Fund and spectrum policy overhauls, Commissioner Meredith Baker said Friday at the Free State Foundation conference. But there’s a risk that the net neutrality argument will continue to be a millstone around commission Chairman Julius Genachowski’s neck, she said. “I share the Chairman’s desire to get beyond net neutrality and focus on our collective priorities, but I fear that the decision in December was only a first step,” Baker said. “Parties are pushing to expand the scope of that decision into new markets and to erode the roadblocks built into the chairman’s approach for wireless, prioritization and managed services.” The FCC must take a “disciplined” approach to a spectrum revamp, she said. “If all we do is reallocate the easiest 500 megahertz to shift towards broadband, we have done future generations a disservice,” Baker said. “Unquestionably, we need more spectrum, but I want us to focus on getting the right spectrum, the right way, and not merely the easiest way.”

Nevada Attorney General Catherine Cortez Masto is looking into allegations that Verizon improperly obtained high-cost Universal Service Fund support, a spokeswoman for Cortez Masto told us. The attorney general’s office has received a petition by staff at the Nevada Public Utilities Commission urging the FCC to revoke Verizon’s Eligible Telecom Carrier status. The petition accused Verizon of using Alltel’s ETC designation to gain funding for non-legacy Alltel lines. Similar complaints from Verizon rivals were filed in other states like Wisconsin. Verizon dismissed the allegations as “unwarranted,” in an ex parte filing with the FCC, saying it filed “pro forma amendments” that “were fully contemplated by the commission’s orders.”

Universal Service Fund high-cost support is critical to wireless buildout in America’s rural areas, U.S. Cellular representatives said in a presentation to Wireline and Wireless bureau officials. “U.S. Cellular combines support with its own capital budget to build new cell sites in many areas that would not otherwise receive service,” the carrier said. “Access to high-cost support will be critical to U.S. Cellular’s ability to roll out 4G infrastructure in rural areas.” Reductions in intercarrier compensation rates, meanwhile, “have generally resulted in wireless carriers reducing prices to consumers or increasing the quantity of service offered,” the company said.

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