The Universal Service Fund grew to $7 billion in 2008, said the Federal-State Joint Board on Universal Service in its annual monitoring report. High-cost support grew $200 million year-over-year to $4.5 billion, with competitive eligible telecommunications carriers (CETC) responsible for the increase. CETCs received $1.4 billion in high-cost support in 2008, up from $1.2 billion the year before. An interim cap on CETC support took effect in August 2008. Rural health care support also expanded year-over-year to $49 million in 2008. E-rate held steady at about $1.8 billion, while low-income support fell to $819 million in 2008 from $823 million the year before. The telecom industry saw $235 billion in 2008 revenue from end users. Fixed local service provider revenue increased $3 billion year-over-year to $78 billion, while wireless revenue jumped $2 billion to $118 billion. Toll service revenue fell $10 billion to $39 billion. The price index of overall telephone rates jumped 2.9 percent in 2008, compared to a general inflation rate of 0.1 percent for all goods and services. Interstate toll usage for incumbent local exchange carrier customers dropped 33 billion minutes year-over-year to 316 billion in 2008.

SouthernLINC Wireless asked the FCC to grant the Georgia Public Service Commission a waiver after the state agency failed to list four carriers receiving universal support when it sought Universal Service Fund certification from the FCC and the Universal Service Administrative Co. in October. The PSC realized it had made a mistake and sought a waiver. “This mistake was neither the result of a failure by any of the affected carriers to comply with GPSC or Commission rules nor was it the result of any finding by the GPSC that the affected carriers had violated the requirement that USF support be used ‘only for the provision, maintenance, and upgrading of facilities and services for which the support is intended,'” SouthernLINC said. It said omission of the competitive eligible telecommunications carriers was “a simple administrative oversight” for which the ETCs shouldn’t be penalized.

State commissions urged the FCC to ignore Vonage threats that the company would go to court if the regulator modifies without a rulemaking proceeding a 2004 declaratory ruling preempting state regulation of interconnected VoIP. In a letter Wednesday to the FCC, the Nebraska Public Service Commission and Kansas Corporation Commission said no administrative law bars the FCC from immediately issuing a fresh declaratory ruling saying VoIP must pay state Universal Service Fund fees. “The prospect of judicial review should not prevent the FCC from reaching the right decision, which is to act expeditiously to protect universal service and fair competition (currently nomadic VoIP is the only category of provider not paying state USF assessments) by issuing a second declaratory ruling supplementing, clarifying (or if necessary modifying) the first declaratory ruling issued in 2004,” they said. The Kansas and Nebraska regulators also rejected arguments by the VON Coalition that state USF assessments are “economic and entry regulation” preempted by the 2004 decision (WID Dec 14 p7). State USF assessments create no conflict between federal and state policies that would necessitate preemption, the states said. “Both the FCC and the State Petitioners share the common policy that nomadic VoIP providers, like all their competitors, must do their part to support the paramount statutory mandate of ensuring universal telephone service throughout the Nation."

State commissions urged the FCC to ignore Vonage threats that the company would go to court if the regulator modifies without a rulemaking proceeding a 2004 declaratory ruling preempting state regulation of interconnected VoIP. In a letter Wednesday to the FCC, the Nebraska Public Service Commission and Kansas Corporation Commission said no administrative law bars the FCC from immediately issuing a fresh declaratory ruling saying VoIP must pay state Universal Service Fund fees. “The prospect of judicial review should not prevent the FCC from reaching the right decision, which is to act expeditiously to protect universal service and fair competition (currently nomadic VoIP is the only category of provider not paying state USF assessments) by issuing a second declaratory ruling supplementing, clarifying (or if necessary modifying) the first declaratory ruling issued in 2004,” they said. The Kansas and Nebraska regulators also rejected arguments by the VON Coalition that state USF assessments are “economic and entry regulation” preempted by the 2004 decision (CD Dec 14 p12). State USF assessments create no conflict between federal and state policies that would necessitate preemption, the states said. “Both the FCC and the State Petitioners share the common policy that nomadic VoIP providers, like all their competitors, must do their part to support the paramount statutory mandate of ensuring universal telephone service throughout the Nation.”

An independent auditing firm hired by the FCC has identified more than 1,000 telephone companies that may not have filed FCC Form 499-A, as required by commission rules, the FCC Office of Inspector General said in its semi-annual report to Congress. The information supplied on that form is used to calculate contributions to the Universal Service Fund, the telecommunications relay services support mechanism, the cost recovery mechanism for numbering administration and the cost recovery mechanism for shared costs of long-term number portability.

Comprehensive FCC action by July on jurisdictional separations may be a long shot, given a short time frame and ongoing work on the National Broadband Plan, said officials for state commissions and state consumer advocates. The FCC may again extend the nearly nine-year-old freeze on separations, which expires June 30, they said. “Another freeze is certainly a possibility,” said Commissioner John Burke of the Vermont Public Service Board. If the FCC chooses to go in that direction, state regulators believe “interim changes to key factors are an absolute pre-requisite to extending final comprehensive review beyond June of this year,” he said.

Comments on the FCC’s rulemaking on the Universal Service Fund high-cost support mechanism for non-rural carriers like Qwest will be due Jan. 28, according to Tuesday’s Federal Register. Replies are due Feb. 12. Earlier this month, the FCC issued a further notice of proposed rulemaking that tentatively concluded the agency could not comprehensively revamp the mechanism by April 16, the date by which it committed to answer a remand by the 10th U.S. Circuit Court of Appeals in Denver.

Spectrum audit legislation will be a high priority for the House and Senate Commerce Committees when Congress reconvenes next year, industry and Hill sources said. Work likely will start in the House Communications Subcommittee with markup of two bills that address the scope of a spectrum inventory (HR-3125), and strategy for relocating holders of federal agency spectrum, freeing it for commercial use (HR- 3019). The Senate Communications Subcommittee also has an audit bill (S-649). Negotiations are ongoing among congressional staff and the administration on a comprehensive approach, industry sources said. There’s strong bipartisan support for an inventory bill.

AT&T asked the FCC to set a deadline to move telecom from circuit-switched to IP-based networks. The request came in comments this week on an FCC National Broadband Plan public notice that proposed the release of a notice of inquiry (NOI) on the transition. Small rural carriers cautioned the commission not to move too fast. Meanwhile, competitive carriers fought with Verizon over whether interconnection and traffic exchange requirements under Sections 251 and 252 of the Communications Act apply to IP networks. Wireless carriers said the rules should ensure regulatory parity.

AT&T asked the FCC to set a deadline to move telecom from circuit-switched to IP-based networks. The request came in comments this week on an FCC National Broadband Plan public notice that proposed the release of a notice of inquiry (NOI) on the transition. Small rural carriers cautioned the commission not to move too fast. Meanwhile, competitive carriers fought with Verizon over whether interconnection and traffic exchange requirements under Sections 251 and 252 of the Communications Act apply to IP networks. Wireless carriers said the rules should ensure regulatory parity.