Adopting a Universal Service Fund revamp proposal by Embarq would best satisfy requirements of a 2005 remand by the 10th U.S. Circuit Court of Appeals, Embarq told the FCC Wireline Bureau in a meeting Thursday. The court directed the commission to revamp its USF high-cost support rules for so-called “non-rural” carriers like Qwest that serve high-cost areas but have too many lines to be considered “rural” by the statutory definition. Comments are due May 8 on how the FCC should respond. Embarq said its plan “would stimulate substantial new broadband deployment, stabilize support for carrier-of-last-resort (CoLR) universal service, and create a more-stable foundation for further” USF reform “without increasing overall support levels.” The proposal is one of four plans under consideration by the FCC (CD April 9 p4).

Vonage and other traditional VoIP providers don’t have to pay into the Nebraska Universal Service Fund, the 8th U.S. Circuit Court of Appeals said Friday. The St. Louis-based court was upholding a district court decision that Nebraska officials had appealed. As the lower court had, the appeals court accepted Vonage’s claim to be an information service rather than a telecom service (CD Sept 15 p8).

Vonage and other traditional VoIP providers don’t have to pay into the Nebraska Universal Service Fund, the 8th U.S. Circuit Court of Appeals said Friday. The St. Louis-based court was upholding a district court decision that Nebraska officials had appealed. As the lower court had, the appeals court accepted Vonage’s claim to be an information service rather than a telecom service. The appeals court decision bodes ill for state universal service funds beset by shrinking bases, Medley Global Partners wrote Friday in a note. “This decision is a major victory for the entire VoIP industry who have long fought the states and the FCC on this issue,” Medley said. Another casualty is the FCC, whose efforts at reforming the federal USF and access schemes Medley said will be tangled by the appeals court decision. That ruling “throws a monkey wrench into the FCC’s ongoing process on what kind of access charge regime should apply to VoIP traffic,” Medley said. The state had been joined in its appeal by the National Association of Regulatory Utility Commissioners and the FCC, filing as friends of the court. Vonage was joined in amicus briefs by the Computer & Communications Industry Association, TIA, Information Technology Industry Council, Information Technology Association of America, Fiber-To-The-Home Council, Verizon and the Voice on the Net Coalition.

The Universal Service Fund “must not be restricted by a statutory cap on the high-cost program” if broadband is to be covered in the future, the Organization for the Promotion and Advancement of Small Telecommunications Companies told House Communications Subcommittee Chairman Rick Boucher of Virginia. The group said in a Thursday letter that those receiving high-cost funds “should be required to meet the universal service obligations established by policy makers.” New legislation ought to focus on expanding the base of contributors so industries are treated fairly, OPASTCO said.

A bill to permanently exempt the universal service program from Antideficiency Act rules was introduced this week by Rep. Dennis Rehberg, R-Mont., and co-sponsored by Rep. Betsy Markey, D-Colo. The rules, imposed in 2003, apply only to the E-Rate program and are thought to be a reason that the program has run into funding problems (CD April 28 p1). But officials involved with the program fear the rules could also be applied to the high-cost and low-income funds. A permanent exemption makes sense, said Tom Wacker, National Telecommunications Cooperative Association vice president of government affairs. An exception could prevent contributions from “soaring, potentially resulting in higher monthly telephone bills for rural consumers,” he said. The NTCA supports a similar bill, S 348, introduced by Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va.

The FCC lacks performance goals for the universal service program’s E-Rate program, and its performance measures are “inadequate,” the Government Accountability Office said in a report released Monday. A “significant amount” of the $2 billion in annual funding isn’t disbursed, the GAO said, putting the figure at about 25 percent of the money for 1998 to 2006. Though the FCC has made improvements recently, they aren’t enough, GAO said. It asked the commission to send Congress a report with “strategic vision” for the program that would identify whether legislative or regulatory changes are needed.

States asked the FCC to promptly adopt a three-year Lifeline and Link-Up pilot program for broadband. In a letter Friday to the FCC commissioners, the National Association of Regulatory Utility Commissioners said the new Universal Service Fund program should be open to all broadband providers. Participating carriers shouldn’t automatically be designated eligible for other USF programs, but the FCC should require any provider receiving USF from another program to participate and contribute to the pilot program, NARUC said. The Federal-State Joint Board on Universal Service should study how the program is carried out and decide whether to expand the pilot into a national program. States should handle the eligibility and verification for low-income participants, it said.

The FCC lacks performance goals for the universal service program’s E-Rate program, and its performance measures are “inadequate,” the Government Accountability Office said in a report released Monday. A “significant amount” of the $2 billion in annual funding isn’t disbursed, the GAO said, putting the figure at about 25 percent of the money for 1998 to 2006. Though the FCC has made improvements recently, they aren’t enough, GAO said. It asked the commission to send Congress a report with “strategic vision” for the program that would identify whether legislative or regulatory changes are needed.

The FCC must overhaul jurisdictional separations before revamping the Universal Service Fund and intercarrier compensation, said the National Association of State Utility Consumer Advocates. In reply comments on whether the FCC should extend the eight-year-old freeze on separations (CD April 21 p3), NASUCA rejected arguments by associations of rural incumbent local exchange carriers. They said separations reform should come last. Compensation and USF levels “are dependent on proper separations between jurisdictions, not the other way around,” it said. The Independent Telephone & Telecommunications Alliance, which didn’t file initial comments, sided with other rural associations. The separations freeze should continue until at least one year following USF and ICC reform, it said. “This approach will ensure that future modification of any separations requirements will be to complement, rather than complicate, the Commission’s ongoing efforts to ensure that regulatory frameworks reflect current competitive market conditions.”

Use the universal service Lifeline and Link Up to spur broadband adoption among low-income Americans, the wireless industry and Alliance for Public Technology urged FCC acting Chairman Michael Copps in a letter last week. All broadband providers should be eligible for program funds, regardless of technology, they said. The letter was signed by several major wireless associations and companies, including the CTIA, the Rural Cellular Association, the Rural Telecommunications Group, AT&T, T-Mobile and Qualcomm. The low-income programs have made local phone service “widely available at an affordable rate,” and now should be applied to broadband, they said. “In stark contrast to other proposals to increase U.S. broadband subscription, these targeted dollars will put low-income Americans on equal footing when choosing a broadband provider.”