An FCC report showing that the universal service high- cost fund rose to $4.5 billion in 2008 from $1.3 billion in 1997 highlights the need for change, the House Commerce Committee’s ranking member, Joe Barton of Texas, said Friday. The fund is a “bloated government program in serious need of reform,” Barton and Communications Subcommittee ranking member Cliff Stearns of Florida said in a written statement. The FCC submitted the report in response to an April request from the committee’s Democratic and Republican leaders.

The FCC sought comments on requests for review filed by Verizon and Hospital Networks Management of the universal service rural health care program decisions, the FCC said. The Universal Service Administrative Co. said Health Networks violated the competitive bidding requirements of the universal service rural health care program. USAC also decided to seek recovery from Verizon of universal service rural health care funds relating to services it performed for Health Networks. Comments due July 6, replies July 20.

Nebraska officials plan to seek a declaratory ruling from the FCC on whether the state can require Vonage and other VoIP companies to contribute to Nebraska’s universal service fund, Nebraska Public Utilities Commission chair Ann Boyle said Friday. That day, the 8th U.S. Circuit Court of Appeals refused a Nebraska request that the full court hear the state’s appeal of a lower court’s rebuff of the universal service charge. “We were not surprised by this,” Boyle said. “We always had assumed that we'd go to the FCC, but we didn’t want Vonage saying that we hadn’t exhausted all possible remedies.” The filing could come this week, and will be supported by the state of Kansas, Boyle told us.

The FCC Wireline Bureau sought comment on changes to the Universal Service Fund E-rate program eligible services list proposed by the Universal Service Administrative Co. Changes include listing ethernet as an eligible digital transmission technology, clarifying that text messaging is an eligible telephone service component, adding interconnected VoIP to the telecom and Internet access categories, and making virtualization software eligible for support in the internal connections category. Comments are due June 23, replies June 30.

The FCC Wireline Bureau sought comment on changes to the Universal Service Fund E-rate program eligible services list proposed by the Universal Service Administrative Co. Changes include listing ethernet as an eligible digital transmission technology, clarifying that text messaging is an eligible telephone service component, adding interconnected VoIP to the telecom and Internet access categories, and making virtualization software eligible for support in the internal connections category. Comments are due June 23, replies June 30.

The FCC denied a request by Virgin Islands Telephone seeking an emergency waiver of accounting rules that could reduce the company’s high-cost loop support under the Universal Service Fund. The carrier asked for relief due to recent network infrastructure damage in the Virgin Islands inflicted by Hurricane Omar (CD Dec 9 p6). But the FCC said the company, Vitelco, didn’t show it needs high-cost support “beyond what it and other similarly-situated companies are entitled to receive” under USF high-cost rules. “The relief Vitelco is seeking … is unrelated to its financial troubles caused by Hurricane Omar, Vitelco’s parent company’s bankruptcy, and general past mismanagement,” the FCC said. “The reduction in Vitelco’s high-cost loop support is due to the fact that Vitelco’s C&WF plant is fully depreciated and Vitelco has failed to invest in new facilities.” The company will be eligible for more support after investing in its plant, it said.

An FCC report on rural broadband prescribes government intervention to spur availability and demand. The report, released publicly on Wednesday, was required by Congress in the 2008 Farm Bill and did not require sign off by all commissioners. Instead, writing in the first-person, acting Chairman Michael Copps highlighted common problems affecting rural broadband, including technological challenges, lack of data and high network costs. Copps also urged a revamp of the Universal Service Fund, new rules on network openness and an audit of all spectrum that the FCC has licensed, with an eye on where it is being used effectively or should be subject to more use on a secondary basis.

USTelecom joined Verizon Wireless and Sprint Nextel in asking the FCC to reject a Corr Wireless petition that seeks to have universal service monies that used to flow to Verizon Wireless and Sprint Nextel redirected into a pool shared by all competitive eligible telecommunications carriers. The wireline association called Corr arguments “nonsensical.”

An FCC report on rural broadband prescribes government intervention to spur availability and demand. The report, released publicly on Wednesday, was required by Congress in the 2008 Farm Bill and did not require sign off by all commissioners.

A former senior legal advisor to FCC Commissioner Jonathan Adelstein will be chief of staff at the Rural Utilities Service, several sources told Communications Daily. Lisa Zaina, currently assistant vice president of regulatory affairs at CTIA, will rejoin Adelstein, who was picked to head the Agriculture Department’s RUS earlier this year. Zaina was an advisor to Adelstein at the FCC from 2002 to 2004. As chief of staff Zaina would help oversee RUS’ doling out of $2.5 billion in federal funds to expand the reach of broadband.