The FCC should adopt reverse auctions to “reduce the amount of money wasted” on the universal service fund, the Seniors Coalition said. The Seniors also urged the Commission to “curb abuses” under the “identical support rule” that bases USF subsidies on the cost of running incumbent telecom companies. “When a wireless carrier that has made little or no investment in infrastructure is allowed to get the same subsidy in this fashion, the result is a gold-plated waste of taxpayer dollars.”

The universal service high-cost fund will “spiral completely out of control” if the FCC grants a Hawaiian Telecom waiver petition, the National Telecommunications Cooperative Association said in reply comments. The carrier disagreed, saying “special circumstances” justify its exemption from usual measurement methods used to set a non- rural local incumbent carrier’s USF support. Even if USF measurement methods need an overhaul, opponents said, it should come in three proposed rulemakings now before the FCC.

Comments are due April 3 on the three universal service fund rulemaking notices released in late January (CD Jan 31 p1). Reply comments are due May 5. The FCC ran summaries of the notices in Tuesday’s Federal Register. They address the “identical support rule,” reverse auctions and reforms urged by the Federal-State Joint Board on Universal Service.

FCC Chairman Kevin Martin said he didn’t delay FCC action on a Universal Service Fund cap or broader USF reform. Martin said a proposed cap is before commissioners but “I haven’t gotten signals from the commissioners that they're willing to end up moving forward.” For a second month, Martin detailed in a meeting with reporters all items on which he seeks votes (CD March 4 p1) at the next monthly meeting, more advance notice than has been agency practice.

A federal court declared it “unlawful” for Nebraska to force Vonage to pay into a state universal service fund. The U.S. District Court for Nebraska slammed the Nebraska PSC with a preliminary injunction, saying the PSC’s “authority to regulate the nomadic interconnected VoIP service provided by [Vonage] is preempted by the FCC, and Vonage need not comply with the [Nebraska USF order].” The order applies only to Nebraska, but will “send a signal” to other states, said Stifel Nicolaus analyst David Kaut.

Demand for school and library universal service support this year is estimated at 16.75 percent higher than last year, but duplication and errors probably inflated that figure, the Universal Service Administrative Co. (USAC) told the FCC Friday. USAC estimated that in funding year 2008 schools and libraries will need $4.3 billion. For funding year 2007, it estimated $3.69 billion. Estimated demand for telecom service and Internet access funding rose 9.1 percent year-over-year to $1.95 billion; demand for internal connections funding grew 23.7 percent to $2.35 billion. USAC based its estimates on 39,909 funding requests received on or before Feb. 7, it said. But “while USAC has made every effort to eliminate duplicate funding requests from this estimate, inevitably we will discover more duplication as we process these applications.” USAC expects the numbers to shrink once it weeds out requests for ineligible services and entities and adjusts incorrect discount rates, it said.

States are proceeding with broadband bills stipulating extension of broadband service to unserved areas. The bills propose varied approaches to identifying unserved areas and getting service to them.

SAN FRANCISCO -- California agencies are starting to follow up on a state report on extending broadband availability and subscriptions, participants said. The state Department of Transportation plans a workshop, tentatively set March 18, on cooperation between agencies in routinely laying fiber conduit in connection with highway projects, said Robert Wullenjohn, policy branch chief of the Public Utilities Commission’s communications division. The work reflects a recommendation in the final report of the California Broadband Task Force, issued last month. In setting up or changing the state Advanced Services Fund, Teleconnect Fund and High Cost Fund B, the PUC is carrying out other task-force proposals, Wullenjohn said Tuesday night at a program sponsored by Women in Telecommunications and a University of San Francisco program.

European Commission (EC) plans for a new telecom agency and spectrum reform drew fire Wednesday from EU lawmakers and regulators. An e-communications marketing authority would be “fundamentally at odds” with independent oversight, U.K. Office of Communications CEO Ed Richards told a hearing by the European Parliament Industry, Research and Energy Committee on the regulatory reform package. One MEP called the plan “cumbersome.” Separately, European broadcasters panned EC plans for market-based allocation of UHF spectrum freed by the digital TV switchover.

The Kansas Corporation Commission staff said changing the state’s Lifeline program to an equal credit system from the present “hold harmless” approach would have negligible impact on the size of the state universal service fund, now $2.8 million annually, but would greatly reduce administrative burdens on the state program by eliminating the need to perform company-specific Lifeline credit calculations for each eligible telecom carrier. The commission last summer asked whether it should abandon the hold-harmless approach, which pegs Lifeline subsidies to each carrier’s basic rates, or adopt an equal credit system where all eligible telecom carriers get the identical monthly support per Lifeline subscriber (Case 07-GIMT-1353-GIT). The commission staff considered three different formulas for setting a uniform statewide Lifeline subsidy. It found the change would require universal service fund increases of between $40,000 and $152,000 annually, depending on the formula used. The staff said any of the fixed-payment formulas would require only minimal increases to the 4.65 percent annual Lifeline assessment rate, averaging well below a tenth of a percentage point.