Net neutrality rules proposed at the FCC probably wouldn’t affect the financial outlook of communications companies through next year, Fitch Ratings said in a report. The FCC is expected to act on the proposal shortly after it completes the National Broadband Plan in February. “While there are a large number of regulatory issues that need to be addressed in the telecommunications and cable industry, led by universal service funding and intercarrier compensation, these issues will be complicated and take a long time to resolve,” said the report. “Instead, it appears that in 2010 the Federal Communications Commission will focus on their involvement in the broadband development allocation of the American Recovery and Reinvestment Act and net neutrality. Neither of these issues is likely to have a material impact on financials or prospects for the industry in 2010.”

The FCC late Wednesday released a list of services eligible for funding under the Universal Service Fund’s E- rate program for funding year 2010. The FCC, as expected, concluded that interconnected VoIP service and text messaging are eligible for E-rate support. “We agree with commenters that the permanent inclusion of interconnected VoIP service increases the options available to schools and libraries to encourage meaningful communications among parents, teachers, and school and library administrators,” the FCC said. “Because interconnected VoIP is increasingly used to replace analog voice service, funding interconnected VoIP service is consistent with the concept of competitive neutrality.” On text messaging, the FCC found that it’s “similar to other E- rate-eligible services used by applicants to communicate, such as e-mail and paging services. … We note that we include text messaging as an eligible service irrespective of whether text message is ultimately categorized as a telecommunications service or an information service.” Among other policy calls, the FCC determined that video on-demand servers, Ethernet, web hosting and wireless local area network controllers should be eligible for funding. The FCC asked for comment on additional changes to the list.

The National Emergency Numbers Association urged the FCC to establish a subsidy mechanism for public safety that follows the model of the Universal Service Fund E-rate program. In comments on a National Broadband Plan public notice on public safety broadband issues, NENA and other public safety groups said adequate broadband service isn’t available in rural and tribal areas. Meanwhile, disabilities-rights advocates backed upgrades to the 911 system to support relay services for the deaf.

The FCC late Wednesday released its list of services eligible for funding under the Universal Service Fund’s E- rate program for funding year 2010. The FCC, as expected, concluded that interconnected VoIP service and text messaging are eligible for E-rate support. “We agree with commenters that the permanent inclusion of interconnected VoIP service increases the options available to schools and libraries to encourage meaningful communications among parents, teachers, and school and library administrators,” the FCC said. “Because interconnected VoIP is increasingly used to replace analog voice service, funding interconnected VoIP service is consistent with the concept of competitive neutrality.” On text messaging, the FCC found that it’s “similar to other E- rate-eligible services used by applicants to communicate, such as e-mail and paging services. … We note that we include text messaging as an eligible service irrespective of whether text message is ultimately categorized as a telecommunications service or an information service.” Among other policy calls, the FCC determined that video on-demand servers, Ethernet, web hosting and wireless local area network controllers should be eligible for funding. The FCC asked for comment on additional changes to the list.

Committing nearly $3.4 million in grants to bolster Internet connections for libraries in five states, the Bill & Melinda Gates Foundation also announced Tuesday that it will partner with 14 more states to help public libraries compete for federal broadband stimulus funds. “Nationally, libraries report that patron demand for high-speed Internet access is growing faster than their ability to provide increased bandwidth,” the foundation said. It cited a recent report by the American Library Association that 60 percent of all libraries say their current Internet speed is insufficient. Grants went to state libraries in Arkansas ($735,207), Kansas ($363,099), Massachusetts ($367,789), New York ($947,517) and Virginia ($977,468). The funds will help underwrite enhancements and maintenance of Internet connections in local libraries. Alaska, Arizona, Colorado, Delaware, Idaho, Kentucky, Montana, North Carolina, Nebraska, New Jersey, Oklahoma, Utah, Vermont, and Washington will participate in the foundation’s new Opportunity Online broadband grant program, which will help libraries develop proposals for broadband stimulus funding from NTIA. “Federal, state, and local government investments in connecting libraries to broadband are important steps toward realizing the vision of universal broadband access,” said Jill Nishi, deputy director of the foundation’s U.S. libraries program. “With support from the foundation, nearly all of Massachusetts’ public libraries will be able to provide high-quality broadband service for their communities and give patrons the online opportunities they need to improve their lives, especially during these strained economic times,” said Robert Maier, director of the Massachusetts Board of Library Commissioners. “This means more of our residents will be able to get online at their library and successfully look for a job, find e- government information and services, improve their workforce skills, and continue their education.”

A new cybersecurity research consortium will focus on solving anticipated problems and transferring the research results into practical applications, participants said. Northrop Grumman announced Tuesday it’s funding the consortium, which will support 10 research projects at three university labs -- Carnegie Mellon’s CyLab, MIT’s Computer Science and Artificial Intelligence Lab, and Purdue University’s Center for Education and Research in Information Assurance and Security. The company is committed to at least a five-year term for the consortium and expects to spend millions, although representatives wouldn’t disclose the exact dollar amount.

The FCC will soon issue a further notice of proposed rulemaking on Universal Service Fund high-cost support for non-rural carriers like Qwest, said two agency officials. The commission committed to release a rulemaking notice by Dec. 15 and a final order by April 16, as it works toward responding to a 2005 remand by the 10th U.S. Circuit Court of Appeals (CD June 11 p7). In 2005, the court called unlawful the FCC’s current non-rural rules, which address carriers like Qwest that serve high-cost areas with too many lines to be considered “rural” by the statutory definition. FCC Chairman Julius Genachowski last week circulated the notice, which contains tentative conclusions, agency officials said. One described the tentative conclusions as very bare with “not a lot of new ideas,” and said the further rulemaking notice seems designed as a “punt.” Commission spokeswoman Jen Howard declined to comment. Meanwhile, industry meetings with the FCC on a comprehensive USF overhaul have been heating up (CD Nov 27 p5). The impetus seems to be the non-rural support item and an expectation among industry that the regulator will tee up reform in the National Broadband Plan due this February, agency officials said. Monday, Windstream phoned an aide to Genachowski about the agency’s rulemaking notice on the 10th Circuit remand, urging the FCC to seek input on how to better target federal universal service support directly to granular high-cost areas, an ex-parte filing said. Windstream said the FCC should stop distinguishing between rural and non-rural carriers, and kill eligibility requirements based on statewide average costs. President John Rose of the Organization for the Promotion & Advancement of Small Telecommunications Companies met separately Monday with aides to Commissioners Michael Copps, Robert McDowell and Meredith Baker, said an ex-parte filing. The meetings focused on USF and intercarrier compensation reform “in the context of” the plan, OPASTCO said.

Committing nearly $3.4 million in grants to bolster Internet connections for libraries in five states, the Bill & Melinda Gates Foundation also announced Tuesday that it will partner with 14 more states to help public libraries compete for federal broadband stimulus funds. “Nationally, libraries report that patron demand for high-speed Internet access is growing faster than their ability to provide increased bandwidth,” the foundation said. It cited a recent report by the American Library Association that 60 percent of all libraries say their current Internet speed is insufficient. Grants went to state libraries in Arkansas ($735,207), Kansas ($363,099), Massachusetts ($367,789), New York ($947,517) and Virginia ($977,468). The funds will help underwrite enhancements and maintenance of Internet connections in local libraries. Alaska, Arizona, Colorado, Delaware, Idaho, Kentucky, Montana, North Carolina, Nebraska, New Jersey, Oklahoma, Utah, Vermont, and Washington will participate in the foundation’s new Opportunity Online broadband grant program, which will help libraries develop proposals for broadband stimulus funding from NTIA. “Federal, state, and local government investments in connecting libraries to broadband are important steps toward realizing the vision of universal broadband access,” said Jill Nishi, deputy director of the foundation’s U.S. libraries program. “With support from the foundation, nearly all of Massachusetts’ public libraries will be able to provide high-quality broadband service for their communities and give patrons the online opportunities they need to improve their lives, especially during these strained economic times,” said Robert Maier, director of the Massachusetts Board of Library Commissioners. “This means more of our residents will be able to get online at their library and successfully look for a job, find e- government information and services, improve their workforce skills, and continue their education.”

Lobbying at the FCC is heating up on overhauls of the Universal Service Fund and intercarrier compensation. The commission is expected to provide direction on the long-pending revamps in its National Broadband Plan. According to ex-parte filings, AT&T, Qwest, the National Telecommunications Cooperative Association and two competitive local exchange carriers visited the FCC within a week of each other. On Thursday, Qwest met with all five commissioners and the Wireline Bureau, while NTCA visited Commissioner Meredith Baker, aides to Commissioners Robert McDowell and Mignon Clyburn, and the Office of Strategic Planning. Monday, AT&T met with the broadband team. Tuesday, Cavalier Telephone and XO Communications met with aides to Commissioners Michael Copps, McDowell and Baker. Discussions followed the groups’ historic arguments on the issues.

CTIA weighed in for the first time on Local Switching Support. The association called for comprehensive changes in the Universal Service Fund and opposed what it called a “backward-looking petition” by the Coalition for Equity in Switching Support. FCC Chairman Julius Genachowski circulated a draft notice of proposed rulemaking that tentatively concluded incumbent local exchange carriers should get additional universal service support under the LSS mechanism if they lose a significant number of access line customers (CD Oct 13 p8). But the commission asked for more data before it makes a final decision.