An FCC notice of inquiry about universal service high- cost support for non-rural carriers spurred old arguments for a USF overhaul, in comments at the commission last week. But the notice, which asks how the FCC should respond to a 2005 remand by the 10th U.S. Circuit Court of Appeals (CD April 9 p4), may address too narrow an issue to result in comprehensive reform, industry officials said. 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.

The FCC’s national broadband plan should be built around social and economic goals, not tied to the business models of incumbent telecom carriers, said a Free Press study released Monday. The study condemned past FCC leadership for its “contempt for the public interest.” It called for a new vision, to be executed through the national broadband plan. Specifically, the group wants Congress to pass a law giving legislative backing to the FCC’s Internet Policy Statement, which should be codified into permanent rules. Free Press urged the FCC to reclassify broadband as a telecommunications service, to facilitate competition among carriers by allowing the commission to reinstate open access rules “where appropriate.” The universal service program should cover broadband, and the commission should do an “honest assessment” of whether broadband is being deployed to all Americans, it said. The study called for a review of competition and pricing policies in the special access and middle-mile markets. It said Congress and the commission should open more public airwaves to unlicensed use and promote spectrum sharing for low-power urban and high-power rural uses. Congress should instruct the FCC and NTIA to inventory spectrum that could be used, the study said. ----

Correction: The administration’s FY 2010 budget request doesn’t give the FCC authority to transfer Universal Service Fund money to its budget for monitoring waste, fraud and abuse in the program. The FY 2009 budget gave permission for the commission to transfer up to $25.5 million (CD May 8 p7).

NTIA is seeking 70 full-time jobs in its FY 2010 budget request, up from an estimated 30 in FY 2009, to carry out the broadband stimulus program, according to documents released Thursday by the Obama administration. The budget request says the agency will make awards under its $4.7 billion stimulus program “as expeditiously as practicable, with initial awards planned for 2009 and all awards being made not later than the end of 2010,” said the Office of Management and Budget.

Rural America hungers enough for high speed broadband to make deployment economically feasible despite recent polls that say otherwise, said panelists at a Benton Foundation luncheon Thursday. “This is about livelihood,” said Tim Nulty, project director of the East Central Vermont Community Fiber-Optic Network. Nulty, who has overseen fiber network construction in 22 rural Vermont townships, said none of the necessary referenda had less than 98 percent support and eight had unanimous support.

Acting on a suggestion by Qwest, Wyoming’s Public Service Commission plans to amend rules on state universal-service funds, the commission said Tuesday. The rewrite of section 500, in chapter 5 of the commission’s procedural rules and special regulations, would create a way for eligible telecommunications carriers to seek state permission to divert federal Universal Service Fund support to specific building projects or equipment upgrades, the commission said. The same change would permit the state to subsidize authorized projects or upgrades by increasing the state USF assessment. Any diversions would need commission approval. Qwest said the change will encourage efforts to improve service, including its own proposed spending to assess service quality in the Lander-Riverton Wind River Indian Reservation area, the commission said. The proposed change would address a situation apparently particular to Wyoming, said Qwest President for Wyoming Mike Ceballos. In other states federal USF funds cover high-cost construction, but Wyoming requires ETCs like Qwest to use such funds as credits on customer bills, he said. Qwest has as many rural customers as independent phone companies in the state do, but independents can use federal USF funds to cover their costs, he noted. “I believe we are unique in Wyoming in applying federal USF money to bill credits,” Ceballos said. “The rule change would allow the Commission to hear proposals to allocate some of that federal money to construction and upgrades.” At the reservation, on which Qwest is the predominant carrier, the company plans to study how best to invest in high-cost areas. Only Alaska is less dense in population than Wyoming, Ceballos noted. His state averages four customers per square mile compared with Alaska’s 3.7, and some Wyoming locales, like the town of Lusk, have one customer per square mile, he said. The commission plans a public hearing on the proposed amendments (Docket Number 90000-102-XO-08) at 9 a.m. May 27 at its headquarters, 2515 Warren Ave., Suite 300, Cheyenne, Wyo. May 18 is the deadline for written comments -- http://psc.state.wy.us under “Hot Topics.”

Rate-of-return carriers should only need to seek recovery of universal service audit costs from the federal government, said state members of the Joint Board on Jurisdictional Separations. In reply comments Tuesday, they backed a petition by the National Telecommunications Cooperative Association (CD April 22 p4) that would assign all federal Universal Service Fund costs to interstate jurisdiction. “The audit costs involved are incurred to assist in the review of the function of the federal USF program and as such should appropriately be assigned to the interstate jurisdiction,” the state members said: “A significant, if not primary, purpose for the audits is to ensure the reasonableness of federal USF surcharges and to detect waste, fraud, and abuse of federal funding.” They rejected comments by Verizon saying costs should remain divided between intrastate and interstate jurisdictions. States may benefit from federal USF subsidies, but “it does not necessarily follow that States benefit from the federal audits,” they said. The “main beneficiaries” are the FCC, interstate ratepayers and the Universal Service Administrative Co., they said. States “have no control over whether federal audits are conducted, the scope of the audits, the audit costs, the selection of the auditor, or the federal universal service disbursement mechanisms that are being audited.”

Small phone companies went to Capitol Hill Tuesday to make the case for legislation including broadband in the universal-service program. Another priority is having this year’s must-pass satellite measure change retransmission- consent rules to give small phone companies easier access to video programming. But lawmakers warned that communications issues face stiff competition for attention in a Congress focused on the economy, health care, energy and a Supreme Court nominee.

The FCC Wireline Bureau wants comment on a petition by Smith Bagley to increase universal service subsidies for low- income consumers living on tribal lands. If adopted, the proposal would increase Lifeline tier-four funds to $30 per month, from $25 monthly. Comments are due June 3, replies June 18.

The Rural Cellular Association didn’t rejoice on the one-year anniversary of the interim cap for the Universal Service Fund high-cost program. Instead, the association of small wireless carriers Friday sent a scathing white paper to acting FCC Chairman Michael Copps. RCA scolded the agency for delaying removal of the “interim” measure, and for imposing the cap in the first place.