Developer MindFuse secured $1 million in convertible note funding from Keiretsu Forum angel investors for the creation of massively multiplayer online games and virtual worlds, MindFuse said Tuesday. The money will be used for working capital, “expanding the core” development team based in Berkeley, Calif., and development of a strong customer service and marketing organization, it said. The company has raised a total of $1.75 million since inception in 2006, it said. MindFuse is out to combine elements of massively multiplayer universes and casual games, said CEO Joseph Walters. He noted MMOs traditionally have been “violent fantasy worlds,” while casual games tend to “feel more like a snack than a feast.” MindFuse’s goal is to “bring the two types of gameplay and players together” to create “simple, compelling games embedded” in a 3-D world, Walters said. The first game developed by MindFuse will be announced “shortly, with a public beta” planned for spring, it said.

ORLANDO -- The telecom industry still is divided on how to revamp intercarrier compensation, indicated speakers at a CompTel panel on the topic. The FCC appears to be teeing up the topic for a Nov. 4 vote. But in a late Monday panel, officials from AT&T, XO Communications the VON Coalition and the National Association of State Utility Consumer Advocates disagreed not only on overhaul proposals, but on whether the current system even needs fixing.

The New Mexico Public Regulation Commission said it’s reviewing its investment program for universal service fund balances in light of the current financial market uncertainty. The PRC told its investment manager, Solix Inc., to meet with the PRC staff and the state Treasurer’s Office to discuss the current strategy of investing fund balances in conservative money market funds that deal in high-quality short-term debt, look at various possible options, and report back by Oct. 10. The fund in recent months has had an invested balance of around $14 million.

ORLANDO -- Rep. Chip Pickering, R-Miss., urged competitive telecom companies to form a Washington alliance to fight large phone company lobbying. In a CompTel keynote, he said the alliance should include Comcast, Sprint Nextel, Clearwire, Google and competitive local exchange carriers. A coalition of that scale could be effective in combating AT&T, Verizon and other large companies’ significant Hill presence, he said. Strategy aside, Pickering predicted sunny days for competitors. Election day and the financial crisis create new opportunities for CLECs to push policy goals, he said.

Broadcasters’ fears of more regulations on how to serve their communities (CD Sept 4 p4) won’t be realized in 2008, if comments by two FCC members -- one supporting new rules, the other opposing -- are a guide. Both Commissioner Michael Copps, long an advocate of localism rules, and Commissioner Robert McDowell, a foe of such rules, said Monday in separate interviews that the FCC is running out of time to address the issue this year. But Copps still wants comprehensive rule reform.

The Wisconsin Public Service Commission seeks comment by Oct. 23 on a staff report on urban telecom competition. The report said AT&T has lost almost 52 percent of its local access lines in the state’s 17 largest cities the last 8 years while increasing its residential basic exchange rate in those cities by 75 percent since urban basic exchange rates were deregulated in 2005 -- to $14.55 from $8.20 monthly. The report (Case 6720-TI-196) said historic wireline competitors had only a 4.3 percent share in the 17 cities, but intermodal competitors (cable, wireless, VoIP) had a 47.6 percent share there. A 2005 rate deregulation and subsequent urban rate increases by AT&T boosted the ceiling rate paid by Lifeline subscribers by 55 percent, it said. The report said if urban rate increases keep to the pace set since 2005, the state will have to raise the cap on Lifeline rates or enlarge the state universal service fund.

HOLLYWOOD -- The music industry should focus on promoting the digital platform and stop wasting time and resources on litigation, Ted Cohen, managing partner of TAG Strategic, said at Digital Music Forum West. The past year’s main success was adoption of the ad-supported model with Imeem and MySpace, he said: “Imeem’s success over the year and a billion streams on MySpace this past week shows that is a business. It’s not about file sharing anymore. It’s about discovery and recommendation.”

HOLLYWOOD -- The music industry should focus on promoting the digital platform and stop wasting time and resources on litigation, Ted Cohen, managing partner of TAG Strategic, said at Digital Music Forum West. The past year’s main success was adoption of the ad-supported model with Imeem and MySpace, he said: “Imeem’s success over the year and a billion streams on MySpace this past week shows that is a business. It’s not about file sharing anymore. It’s about discovery and recommendation.”

The FCC should adopt “competitively neutral” universal service program rules treating rural and urban areas equally, Maine’s Republican senators, Olympia Snowe and Susan Collins, to the agency in a letter. Eliminating the Interstate Access and Common Line Support rules, as proposed, would mean a 46 percent drop in USF support in Maine, they said. “We urge you to reject any proposal that would reduce funding for competitive carriers” because it would harm rural consumers and perhaps public safety, they said, urging that reforms not favor any technology.

USCellular CEO John Rooney Wednesday raised an alert about proposed changes in Universal Service Fund rules, likely teed-up for the FCC’s Nov. 4 agenda meeting. He said the changes could have a devastating effect on wireless carriers seeking money from the USF. Rooney said the proposed rule changes are huge for companies like USCellular, but they're getting limited attention with a little more than a month before the meeting. US Cellular also submitted to the FCC new poll data showing people want USF support for wireless in five states.