The Navajo Nation urged the FCC to withhold a final decision on a Smith Bagley petition regarding the Universal Service Fund. There are additional policy concerns “that the Navajo Nation Telecommunications Regulatory Commission would like to consider,” the tribe said in an ex parte filing. In February, Smith Bagley, doing business as Cellular One, requested a waiver enabling it and other eligible telecom carriers “to obtain uncapped high-cost support to provide or expand telecommunications services to residents of the Eastern Navajo Agency” in New Mexico, the FCC said in a public notice. The tribe would like to obtain more information from the parties involved and allow the NNTRC to provide the FCC with the tribe’s official policy, the Navajo Nation said.

FCC Commissioner Robert McDowell, who was recently in New York to meet with analysts and investors, said the message emanating from Wall Street was clear: Chairman Julius Genachowski’s “third way” broadband reclassification proposal is already having a chilling effect on investment. A divided commission is to take up the Genachowski proposal Thursday. McDowell also said in an interview Wednesday that the FCC should complete action on the stalled white spaces proceeding quickly, so devices can be on store shelves in time for the 2011 holiday buying season.

The Rural Utilities Service is anticipating that investment for round two of the Broadband Initiatives Program “is going to be more than double what we invested in the first round,” Administrator Jonathan Adelstein said at the Broadband Breakfast. The agency planned to have three rounds, but “folded the second and third rounds into the second one.” Adjusting the “remote” definition, increasing the grant component and other changes in the eligibility process encouraged more applications, he said. Most of the awards will be announced in July and August, he said.

Some recommendations in the National Broadband Plan “put existing rural broadband networks at risk,” the National Telecommunications Cooperative Association and other associations said in a letter to Agriculture Secretary Tom Vilsack. The proposal creates uncertainty and “jeopardizes infrastructure investment, future debt equity loans for carriers and the repayment of Rural Utilities Service loans,” they said. The letter also was signed by the Western Telecom Alliance and the Organization for the Promotion & Advancement of Small Telecommunications Companies. The overarching problem is the disparity between the goals of achieving download speeds of 100 Mbps for 100 million homes by 2020, and the initial universal target of 4 Mbps, NTCA said. “Urban centers would enjoy the higher level speeds much sooner,” said NTCA Government Affairs Vice President Tom Wacker in an interview. With the extreme costs of deploying broadband in rural areas, “you're not going to reach the high levels of speeds quickly.” The letter also emphasizes the concern about “the ability of our members to pay back existing communications loans” issued by RUS. If the FCC diverts Universal Service Fund support away from certain carriers, “you'll move capital and operating expenses away from those who've shown a commitment to those rural markets,” Wacker said. The 4 Mbps goal is a minimum threshold, Wireline Bureau Chief Sharon Gillett said in an interview. “It’s aggressive relative to other countries,” like the U.K. and Australia. “We're suggesting that when broadband is supported with public funds, it [speed] should be at a minimum level of what is adequate for the rest of the country.” In order to achieve 100 Mbps for 100 million homes, rural households must be included, Gillett said.

Broadband data and the Universal Service Fund are related because “in order to know what the magnitude of the issues is and where the issues are, we need to get better data,” FCC Wireline Bureau Chief Sharon Gillett said at the Broadband Policy Summit, sponsored by Pike & Fischer. Universal service should be revamped in a way that “reflects what consumers are buying out in the world” and “should encourage and reward efficiency,” said Scott Bergmann, CTIA assistant vice president of regulatory affairs. The mandates and support should match each another, said Windstream Vice President Eric Einhorn. “We are not going to meet a mandate that’s not funded, and likewise we shouldn’t have funding that exceeds a mandate because of the efficiency and fairness principles.” The National Broadband Plan’s target of 4 Mbps service says “we're settling for second-class broadband service,” said Dan Mitchell, legal affairs vice president for the National Telecommunications Cooperative Association. That speed “will be obsolete by the end of this year.” The goal for the nation is 100 Mbps, Gillett said. Because about half the country has 4 Mbps, “it is a target.”

Cable investors are concerned about the prospect of Title II reclassification for broadband services, Wachovia analyst Marci Ryvicker wrote after meeting with about 50 representatives of hedge funds and institutional investors. “Investors view [FCC Chairman Julius] Genachowski’s Title 2 ‘light’ as a slippery slope that will eventually lead to significant government oversight of cable’s ‘bread and butter,'” its broadband business, she said. The main concern is that future regulators could scale back the forbearance from most of the common carrier rules that Genachowski proposes, she said. Even if the FCC adopts the reclassification proposal, which Ryvicker doubts, it would be at least 2016 before the forbearance provisions could be eliminated, she said. Genachowski’s term doesn’t end until 2014 and any move to impose more rules would be fought by the network operators for at least a couple of years, she said. “While we understand the overhang that is typically created by regulatory uncertainty, we think the heightened fear will eventually die down as Title 2 ‘light’ just becomes a ‘another’ regulatory risk facing the cable MSOs.” Ryvicker said other investor concerns about the cable industry include: The fear that online video will ruin conventional pay-TV operators’ business; uncertainty about who will win the battle between programmers and distributors over content license fees; concern that Comcast will have to give up assets to get federal approval of its NBC Universal takeover; and uncertainty about the pace and timing of future large cable mergers. Beyond cable, media investors worry that they have missed the rally in CBS shares, DirecTV will soon start losing subscribers and TiVo’s court fight with Dish will continue to cloud the future for investors in the satellite-TV company, she said.

Broadband data and the Universal Service Fund are related because “in order to know what the magnitude of the issues is and where the issues are, we need to get better data,” FCC Wireline Bureau Chief Sharon Gillett said at the Broadband Policy Summit, sponsored by Pike & Fischer. Universal service should be revamped in a way that “reflects what consumers are buying out in the world” and “should encourage and reward efficiency,” said Scott Bergmann, CTIA assistant vice president of regulatory affairs. The mandates and support should match each another, said Windstream Vice President Eric Einhorn. “We are not going to meet a mandate that’s not funded, and likewise we shouldn’t have funding that exceeds a mandate because of the efficiency and fairness principles.” The National Broadband Plan’s target of 4 Mbps service says “we're settling for second-class broadband service,” said Dan Mitchell, legal affairs vice president for the National Telecommunications Cooperative Association. That speed “will be obsolete by the end of this year.” The goal for the nation is 100 Mbps, Gillett said. Because about half the country has 4 Mbps, “it is a target.”

The ongoing fight over whether broadband should be reclassified as a more heavily regulated “telecom” service has resulted in chaos for the broadband industry, FCC Commissioner Meredith Baker said Thursday at the annual Broadband Policy Summit, sponsored by Pike & Fischer. Baker also said work on the “third way” reclassification plan by FCC Chairman Julius Genachowski has distracted attention from the National Broadband Plan. Another danger is that increased FCC regulation of the Internet could lead to more government control of the Internet in other nations, she warned.

The most significant National Broadband Plan recommendation is the overhaul of the Universal Service Fund “to expand support to explicitly fund broadband,” FCC Commissioner Mignon Clyburn said at the Mid-America Regulatory Commissioners Conference of state officials in Kansas City, Mo. She said “up to 24 million Americans may not have access to broadband at home.” Although USF “provides some support of broadband networks indirectly, it does not do so in the most efficient manner,” Clyburn said. In the overhaul’s first phase, a Connect America Fund will be established to “specifically target support to extend broadband to unserved areas” and provide support in areas “where there’s no private sector business case to offer affordable broadband service without government support,” she said. Some claim that the new fund “will perpetuate a digital divide between urban and rural areas because it will only support broadband networks offering download speeds of 4 Mbps and upload speeds of 1 Mbps,” Clyburn said. The fund is for “providing to all Americans, no matter where they live, what most Americans already have available to them,” she said. The FCC recognizes that “there will be geographic areas where broadband has been built and that to continue to serve those areas, support will be required.” If broadband availability “decreases as a result of Universal Service Fund reform, then we will fail in our goal to reach all Americans.” Clyburn sought help from state regulators: “We are anxious to have your input on the proposed reform, carrier of last resort obligations and the current status of state high cost funds."

Fresh from defending against a motion to halt its operations, LimeWire found itself facing a new crisis Monday as the RIAA filed a new action seeking to freeze all assets of the company. “The evidence in the record overwhelmingly demonstrates Gorton’s clear intent to abscond with funds to frustrate Plaintiff’s efforts to collect a legal judgment in this case, and is more than sufficient to warrant a preliminary injunction freezing [LimeWire] assets,” RIAA alleged in court documents filed with U.S. District Court Judge Kimba Wood, New York.