Microsoft could be inadvertently funding the Russian mafia and Chinese gangs through poor vetting and takedown of search advertisements for prescription drugs, a pharmacy- verification service said in a report. LegitScript, which last year debuted its service to identify online pharmacies who meet “basic requirements of law and safety” (WID May 23/08 p6), said Microsoft had been given “ample, repeated notice” by LegitScript and others of such ads’ existence and which Microsoft policies enabled them. Those warnings predate by a year the launch of Microsoft’s re-branded search engine Bing, LegitScript President John Horton told us.

At an Aug. 17 meeting, Utah’s Public Service Commission will consider a petition by All West Communications for a rate increase and an increase in state Universal Service Fund payments. If granted, the combination would erase a deficit of nearly $766,000, the company said. The telco wants to raise its basic residential service rate from $13.50 to $16.50 per month, and its basic business rate from $23 to $26 per month. Those increases would neutralize $216,000 of the deficit, it said. The remainder would be addressed by approving an additional $549,390 in annual state USF funds for the company, All West said.

Senate Judiciary Committee leaders plan to mark up a performance rights bill, S-379, in the fall with the goal of achieving parity in royalty payments across all platforms, they said at a hearing on Tuesday. “It appears some significant progress has been made,” said Sen. Dianne Feinstein, D-Calif., who chaired Tuesday’s hearing. She was alluding to an agreement almost a month ago between the recording industry and webcasters on royalty payments. “That is terrific and mildly surprising,” Feinstein said. SoundExchange reached terms with what are called pureplay webcasters on rates to replace those set by the Copyright Royalty Board two years ago.

Senate Judiciary Committee leaders plan to mark up a performance rights bill, S-379, in the fall with the goal of achieving parity in royalty payments across all platforms, they said at a hearing on Tuesday. “It appears some significant progress has been made,” said Sen. Dianne Feinstein, D-Calif., who chaired Tuesday’s hearing. She was alluding to an agreement almost a month ago between the recording industry and webcasters on royalty payments. “That is terrific and mildly surprising,” Feinstein said. SoundExchange reached terms with what are called pureplay webcasters on rates to replace those set by the Copyright Royalty Board two years ago (WID July 8 p2).

FCC Chairman Julius Genachowski plans to put substantial emphasis on process, ensuring that the commission’s work is done through the its bureaus and offices, staffed by longtime experts. That emphasis, industry and commission officials said, marks a major change from the Kevin Martin FCC, in which power was concentrated in the chairman’s office. An immediate result, commission officials acknowledged, is that the FCC probably won’t make major policy calls in August.

The FCC Wireline Bureau carried forward $900 million in unused E-rate money to increase payouts to schools and libraries for funding year 2009, the bureau said last week. The Universal Service Administrative Co. had projected $1 billion in unused money. But, the bureau said, it reserved $100 million for use in 2010. “Absent a rollover of E-rate funds from prior funding years, the annual cap will preclude USAC from fully funding Priority Two requests in funding year 2009 at even the highest discount level, 90 percent.” A similar deficit probably will be booked in 2010, it said.

The FCC Wireline Bureau carried forward $900 million in unused E-rate money to increase payouts to schools and libraries for funding year 2009, the bureau said last week. The Universal Service Administrative Co. had projected $1 billion in unused money. But, the bureau said, it reserved $100 million for use in 2010. “Absent a rollover of E-rate funds from prior funding years, the annual cap will preclude USAC from fully funding Priority Two requests in funding year 2009 at even the highest discount level, 90 percent.” A similar deficit probably will be booked in 2010, it said.

The continuation of the FCC’s eight-year-old proceeding to revamp intercarrier compensation has resulted in “a substantial, growing and unnecessary layer of regulatory uncertainty and unpredictability overhanging important revenue flows, interfering with broadband planning and investment,” USTelecom said. In a letter Wednesday to Chairman Julius Genachowski, the association asked that the commission “publish a draft reform proposal for comment this fall with the goal of putting a comprehensive reform plan in place by the end of this year.” Nearly everyone agrees that the current system is broken, and there’s “broad consensus on at least the first steps to fixing this system,” it said. Most agree the FCC should move intrastate access rates to interstate rates, provide a revenue recovery mechanism and begin “modernizing” the Universal Service Fund, USTelecom said. “The Commission should draw on this common ground to create a managed transition to a modernized system of unified, cost-based rates and explicit support targeted to where it is most needed.”

The FCC must overhaul Universal Service Fund distribution, not contribution, to respond effectively to this quarter’s record-high contribution factor, said the National Association of State Utility Consumer Advocates. In a letter Wednesday to commissioners, the association asked the commission to reject an “emergency” petition by AT&T calling for basing contributions on a carrier’s phone-number count (CD July 29 p8), in place of interstate revenue. The carrier blamed shrinking revenue from access lines for the factor’s rise. But NASUCA said carriers’ interstate revenue has been stable the past seven years. “The adjusted revenues have fluctuated around a mean of $16.08 billion, with the maximum being $0.8 billion above the mean and the minimum being the current $1.32 billion below the mean,” it said. “This is hardly the ‘death spiral’ that AT&T and others have continually predicted.”

A proposed government initiative to widely deploy HD voice technology would be a boon to device manufacturers, said analysts and industry executives in interviews. But while Web-based VoIP providers and big network operators are eying HD voice, some smaller service providers doubt the unproven technology is worth the effort. And Washington may have other priorities.