USTelecom President Walter McCormick sharply criticized the FCC Tuesday for proposing net neutrality rules that could potentially keep carriers from passing the cost of broadband to anyone but subscribers. McCormick, who keynoted at the NextGenWeb conference in Washington, also warned that driving down prices won’t be enough on its own to lead to universal adoption, and expressed deep concern about the broadband reclassification inquiry the commission launched last week.

How universal service fits into Congress’ planned rewrite of the Telecom Act is expected to come up at a Senate Commerce Committee hearing Thursday on the Universal Service Fund, industry lobbyists said Monday. The Senate hearing opens a new avenue of Hill dialog on USF, an issue that lately has been mainly the domain of the House. House and Senate Commerce Committee staff meetings on the telecom law revamp start Friday (CD June 21 p8).

"We don’t have the statutory authority to do what we're doing” on reclassifying broadband, FCC Commissioner Robert McDowell said in an interview for C-SPAN’s The Communicators. The commission’s notice of inquiry toward reclassifying broadband transport service is “the FCC trying to legislate.” McDowell said he disagrees strongly with Chairman Julius Genachowski’s statement that the Comcast v. FCC decision “created uncertainty in an area that had been widely regarded as settled.” What has created uncertainty is “discussion of trying to regulate the Internet under common carrier rules,” McDowell said. The issue has been settled for years as it was handled by the Clinton and Bush administrations, he said: “In the course of that, broadband has proliferated.” The proposal especially threatens innovation at the core of the network, he said. It creates “an asymmetry in the market,” and “it puts the thumb of government on the core of the Internet and says we can have unfettered innovation at the edge, but on the core the government’s going to have a ‘mother-may-I’ approach.” Despite the Comcast case, the commission still has the authority to reform the Universal Service Fund “based on the explicit authority we have under Section 254” of the Communications Act. Even if the FCC didn’t have such authority, there is a work-around, he said. “If you're a traditional phone company that receives subsidies … for traditional voice services, we can tie that subsidy to your performance in the broadband market.” McDowell said the National Broadband Plan’s major components of reforming universal service and bringing more spectrum to the market aren’t impacted by the case: “There’s no way you can argue the Comcast decision affects our ability to do that.” As new technologies “are ahead of the law” and have “erased the lines between these silos the government created a long time ago … we probably do need to look at it,” McDowell said in response to a possible update of the Communications Act.

Rural Cellular Association President Steve Berry and others from the group met with FCC Wireless Bureau officials Wednesday to discuss handset exclusivity, roaming, and Universal Service Fund issues, said an ex parte filing by the group. “During the meeting, RCA representatives commended the Commission for eliminating the home roaming exception and asked the FCC to follow that path and mandate automatic data roaming similar to voice,” RCA said. “Data roaming is the fundamental building block to bringing ubiquitous broadband to rural America. RCA members explained how they have limited options to obtain nationwide mobile devices, but their customers still expect nationwide coverage and comparable services to their urban counterparts.”

Labor, civil rights and environmental groups want “narrowly targeted” legislation clarifying the FCC’s broadband authority, said the Communications Workers of America, National Urban League, Sierra Club and five other groups. In a letter Friday to Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., and House counterpart Rep. Henry Waxman, D-Calif., the groups said legislation would prevent “further delays” to deploying broadband nationwide. Legislation should clarify that the Universal Service Fund can support broadband, codify the FCC’s existing four Internet principles, require transparency about ISP services, stop “unreasonable discrimination” by ISPs “against any lawful Internet content, application, or service that harms competition or consumers” and ensure minorities have “meaningful opportunities to participate” in broadband build out, they said. Other “important long-range issues” should be included in a later, “more comprehensive update of the Communications Act,” they said. Rockefeller and Waxman along with their Communications Subcommittee Chairmen Sen. John Kerry, D-Mass., and Rep. Rick Boucher, D-Va., have promised a comprehensive update of the Communications Act. Boucher simultaneously has called for narrow, consensus-based net neutrality legislation.

The National Broadband Plan poses a threat to “comparable, affordable voice and broadband service in rural areas,” the National Telecommunications Cooperative Association said in an ex parte filing about a meeting with the FCC Wireline Bureau staff. The threat will result from limiting the Universal Service Fund to support 4 Mbps download and 1 Mbps upload broadband speeds in rural areas, “while promoting 100 Mbps download speeds in urban areas.” NTCA also urged the FCC to consider expanding the USF contribution methodology to include all broadband providers, the association said.

"We don’t have the statutory authority to do what we're doing” on reclassifying broadband, FCC Commissioner Robert McDowell said in an interview for C-SPAN’s The Communicators. The commission’s notice of inquiry toward reclassifying broadband transport service is “the FCC trying to legislate.” McDowell said he disagrees strongly with Chairman Julius Genachowski’s statement that the Comcast v. FCC decision “created uncertainty in an area that had been widely regarded as settled.” What has created uncertainty is “discussion of trying to regulate the Internet under common carrier rules,” McDowell said. The issue has been settled for years as it was handled by the Clinton and Bush administrations, he said: “In the course of that, broadband has proliferated.” The proposal especially threatens innovation at the core of the network, he said. It creates “an asymmetry in the market,” and “it puts the thumb of government on the core of the Internet and says we can have unfettered innovation at the edge, but on the core the government’s going to have a ‘mother-may-I’ approach.” Despite the Comcast case, the commission still has the authority to reform the Universal Service Fund “based on the explicit authority we have under Section 254” of the Communications Act. Even if the FCC didn’t have such authority, there is a work-around, he said. “If you're a traditional phone company that receives subsidies … for traditional voice services, we can tie that subsidy to your performance in the broadband market.” McDowell said the National Broadband Plan’s major components of reforming universal service and bringing more spectrum to the market aren’t impacted by the case: “There’s no way you can argue the Comcast decision affects our ability to do that.” As new technologies “are ahead of the law” and have “erased the lines between these silos the government created a long time ago … we probably do need to look at it,” McDowell said in response to a possible update of the Communications Act.

Labor, civil rights and environmental groups want “narrowly targeted” legislation clarifying the FCC’s broadband authority, said the Communications Workers of America, National Urban League, Sierra Club and five other groups. In a letter Friday to Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., and House counterpart Rep. Henry Waxman, D-Calif., the groups said legislation would prevent “further delays” to deploying broadband nationwide. Legislation should clarify that the Universal Service Fund can support broadband, codify the FCC’s existing four Internet principles, require transparency about ISP services, stop “unreasonable discrimination” by ISPs “against any lawful Internet content, application, or service that harms competition or consumers” and ensure minorities have “meaningful opportunities to participate” in broadband build out, they said. Other “important long-range issues” should be included in a later, “more comprehensive update of the Communications Act,” they said. Rockefeller and Waxman along with their Communications Subcommittee Chairmen Sen. John Kerry, D-Mass., and Rep. Rick Boucher, D-Va., have promised a comprehensive update of the Communications Act. Boucher simultaneously has called for narrow, consensus-based net neutrality legislation.

The Senate Commerce Committee plans a hearing June 24 on revamping the Universal Service Fund, the committee said Thursday. The hearing is titled “Transforming the High-Cost Fund for the Broadband Era.” The committee plans to start at 10 a.m. in Room 253 of the Russell Senate Office Building.

House Commerce Committee leaders sought updated information on the Universal Service Fund, in a letter Tuesday to FCC Chairman Julius Genachowski. It was signed by Committee Chairman Henry Waxman, D-Calif., Ranking Member Joe Barton, R-Texas, and Communications Subcommittee Chairman Rick Boucher, D-Va., and Ranking Member Cliff Stearns, R-Fla. The committee leaders issued a similar request to former acting Chairman Michael Copps in April 2009. Among other data sought, the legislators asked for top-10 lists of the companies that receive the most high-cost support, the largest per-line subsidies by study area, and the study areas with the most eligible telecommunications carriers.