The Indiana Utility Regulatory Commission denied Cincinnati Bell a waiver of a universal service rule requiring that its mandatory contributions to the state universal service fund be recovered from its customers by a line-item surcharge on phone bills. That rule was included in a comprehensive state universal service reform compromise reached by all local exchange providers and approved by the commission in 2004. Cincinnati Bell (Case 43476) said only 6,000 of its 500,000 customers are located in Indiana and its contribution to the state fund has been only around $1,000 monthly. It said changing its billing system to accommodate the Indiana passthrough requirement would be inefficient and costly. It sought a waiver allowing it to make its contribution from general revenues without a line-item passthrough. But the commission said the passthrough surcharge was a central issue in the 2004 compromise agreement, which doesn’t provide for waivers of that rule. It said the agreement does allow rural telcos faced with extraordinary circumstances to request a waiver but Cincinnati Bell isn’t a rural telco and even if it was rural it isn’t facing extraordinary circumstances.

The FCC should ignore recent AT&T and Verizon proposals asking it to preempt states on intercarrier compensation, the National Association of Regulatory Utility Commissioners said. The carriers asked the FCC to “reaffirm” that all regulated VoIP services fall under federal jurisdiction. In a Tuesday letter, NARUC said the requests “mischaracterize the current state of both the law and the facts with respect to non-nomadic VoIP traffic.” The FCC never found fixed VoIP subject to federal preemption, and the 8th U.S. Appeals Court in St. Louis has affirmed that, the group said. “Because there is no question it is possible to separate intrastate non-nomadic facilities-based VoIP calls from interstate calls, the FCC has no jurisdiction over such calls.” NARUC also disputed the carriers’ request for a uniform intercarrier compensation regime applicable to all traffic. The FCC has no power to do that “through preemption or without instigating a substantial increase in State or federal universal service funds,” NARUC said. Nor can the FCC use federal funds to reduce intrastate access charges without changing separations rules, it said. “Any such proposed changes must be referred to the Federal-State Joint Board on Separations before any final FCC rules can be adopted.”

All but rural carriers rejected an Embarq plan for an interim revamp to intercarrier compensation (CD Aug 4 p7). In comments to the FCC Tuesday, the Embarq plan got slightly better reviews than an AT&T proposal did last week (CD Aug 25 p4). But most commenters said they would rather the FCC pursue permanent, comprehensive reform, promised by Chairman Kevin Martin for Nov. 5.

Maritime radio service providers must pay into the Universal Service Fund, the FCC said Tuesday. The agency denied a Maritime Communications request that it review a Universal Service Administrative Co. decision denying two other radio providers’ joint request for refund of $1.3 million in USF contributions. Automated maritime telecommunications service is a commercial mobile radio service, and FCC rules say CMRS must contribute to USF, the agency said.

The Colorado Office of Consumer Counsel urged regulators there to curb growth in the state high-cost universal service fund through measures such as limiting support to the first line serving a residence or business. In comments to the Public Utilities Commission on possible reforms to the state universal service fund (Case 05-I-431T), the OCC said “universal service is accomplished when the first line of connectivity is supplied.” But the Colorado Telecom Association said the state fund’s purpose is to make rural phone service comparable in price and kind to service in urban areas. The group also said that if the program were meant to support only a single line to a customer, that would have been written into the program at the outset. The OCC was joined by Qwest in opposing state universal service subsidies for broadband service. They said broadband is an unregulated service and state law may not allow it to be supported. Most parties agreed that all carriers providing intrastate telecom service should contribute to the state fund. Verizon Wireless took exception, saying that it doesn’t use the public switched phone network, and that assessing contributions as a rate element, as state law requires, could put the state in conflict with a federal ban on state wireless rate regulation.

A federal appeals court considering whether the FCC preempted states from compelling VoIP providers to pay into state universal service funds gave Vonage until Sept. 10 to respond to an FCC friend-of-the-court brief in which the FCC said it didn’t preempt states in this area. The 8th U.S. Court of Appeals in St. Louis recently accepted a late-filed FCC brief because it bore directly on the central issue in the case (08-1764). Vonage had challenged the Nebraska Public Service Commission’s right to make it pay into the state universal service fund. The FCC brief said it didn’t preempt such state actions provided were consistent with federal universal service policy.

Sen. Barack Obama, D-Ill., supports a net neutrality law empowering the FCC to pursue discrimination complaints against network operators, Obama technology advisor and ex- FCC Chairman William Kennard told C-Span’s Communicators. Kennard termed recent FCC censure of Comcast for blocking file sharing traffic a “tentative” first step, but said agency jurisdiction is “murky” and could lead to lengthy legal appeals.

A group of wireless carriers withdrew their petition to have the FCC reconsider its interim cap on the Universal Service Fund high-cost program, according to a Friday ex parte. The Rural Cellular Association and a group of small wireless competitive eligible telecom carriers challenged the cap earlier this month (CD Aug 6 p10). The ex parte didn’t explain the withdrawal, but a source with knowledge of the matter told us the group didn’t want to “waste a lot of time” at the FCC, planning instead to take their challenge to court next week. The carriers filed at the FCC first because they expected others to file reconsideration petitions, the source said. If the carriers immediately went to court and others filed challenges at the FCC, the court probably would hold the case in abeyance pending the FCC proceedings. Since no one else has filed reconsideration petitions, the RCA group can go to court, the source said.

Qwest received $28.5 million in assistance from the universal service program’s high-cost fund in 2007, the company told House Oversight Committee Chairman Henry Waxman, D-Calif., in a letter Monday. Waxman had asked Qwest and 23 other carriers to respond by Monday to questions on how they spend USF subsidies as part of an ongoing inquiry (CD July 28 p6). Waxman is concerned that phone customers are paying surcharges of 11 percent or more to support the fund, he said. Several carriers told us Monday they did not want to release their responses to Waxman, although they had completed the letters. Qwest said it received no high-cost assistance in rural states such as Iowa, New Mexico and North Dakota. “Qwest’s region-wide support … equals the amount of support provided to non-rural eligible telecommunications carriers in West Virginia and was just one-seventh of the non-rural high cost support awarded in Mississippi,” said a letter to Waxman from Shirley Bloomfield, Qwest’s senior vice president of federal relations. The carrier told Waxman that high-cost support should be targeted to rural areas served by non-rural ILECs.

A federal appeals court considering whether the FCC preempted states from compelling VoIP providers to pay into state universal service funds gave Vonage until Sept. 10 to respond to an FCC friend-of-the-court brief in which the FCC said it didn’t preempt states in this area. The 8th U.S. Court of Appeals in St. Louis recently accepted a late-filed FCC brief because it bore directly on the central issue in the case (08-1764). Vonage had challenged the Nebraska Public Service Commission’s right to make it pay into the state universal service fund. The FCC brief said it didn’t preempt such state actions provided were consistent with federal universal service policy.