The telecom and high-tech industries support a four-year extension of the Internet tax moratorium offered in a bill (HR-3678) by House Judiciary Committee Chairman John Conyers, D-Mich. “While we prefer a permanent extension, we believe that HR-3678 is a step forward and thus a bill we can support,” said a letter to Conyers’ office from Don’t Tax Our Web coalition leader Broderick Johnson. A permanent extension would be the first choice, but given the political situation the industry prefers an extension to nothing being done, industry and Hill sources said.

The telecom and high-tech industry supports a four-year extension of the Internet tax moratorium offered in a bill (HR-3678) by House Judiciary Committee Chairman John Conyers, D-Mich. “While we prefer a permanent extension, we believe that HR-3678 is a step forward and thus a bill we can support,” said a letter to Conyers’ office from Don’t Tax Our Web coalition leader Broderick Johnson. A permanent extension would be the first choice, but given the political situation the industry prefers an extension to nothing being done, industry and Hill sources said.

GENEVA -- Social networking, mashups and other emerging Internet tools that raise privacy and cross-jurisdictional questions will loom larger than ever before at the upcoming OECD Ministerial Conference on the future of the Internet economy, officials told us. International debate over privacy, network neutrality and the intersection of national legal systems in the virtual world is rising, officials said Wednesday during the OECD-Canada Forum on the Participative Web (WID Aug 28 p1, Aug 27 p1).

Audits of the Universal Service Fund show a high “erroneous payment rate,” though the fund’s operation generally complies with FCC rules, the agency’s inspector general reported Wednesday. “Erroneous payments” can be high or low, said the inspector general’s office. Some error reports resulted from the way auditors traditionally account for lack of information, Inspector General Kent Nilsson said in the report. When an agency can’t determine whether a payment is proper because it doesn’t have enough information, the Improper Payments Information Act requires that the payment be considered in error, said the inspector general. Even so, the erroneous payment rates were 16.6 percent for the High Cost Program, 12.9 percent for the Schools and Libraries Program, 9.5 percent for the Low Income Program and 20.6 percent for the Rural Health Care Program. Where auditors could give an opinion, frequent causes of noncompliance included inadequate documentation, inadequate internal auditing processes and lack of proper data collection, reporting and monitoring.

Rural consumers should decide what kind of telecom service they want, rather than others “jamming one technology down their throats,” a CTIA spokesman said Tuesday in response to a plan to cap Universal Service Fund subsidies for wireless providers (CD Oct 2 p3). “Rural consumers have every right to get the same communications abilities as New York and Houston” and that includes wireless service, he said. Wireline providers are trying to limit choices for rural consumers by limiting the amount of subsidies wireless carriers can get to serve those customers, he said. The Keep America Connected Coalition, the sponsor of Monday’s conference, appears to “start from the assumption that rural telephone companies are delivering… real value today under the ‘high cost’ portion of the USF,” said Cap the Fund, a consumer group that supports reducing the Universal Service Fund. Consumers pay “a heavy toll… for outlandish USF tax subsidies going into the pockets of both wireless companies and wireline rural telephone companies,” the group said.

The telecom industry argued vehemently against modifying special access rules in a House Telecom Subcommittee hearing Tuesday, as Democratic leaders pushed for new pricing policies. Democratic leaders also condemned the FCC’s forbearance petition policies as lacking transparency, preventing Congress from exercising “appropriate” oversight. “Unacceptable,” House Commerce Chairman John Dingell, D- Mich., said in a back-and-forth discussion with Verizon Executive Vice President Tom Tauke.

The National Telecommunications Cooperative Association has a five-point plan to revamp the universal service program that includes eliminating the so-called “identical support rule” basing wireless provider subsidies on costs incurred running wireline telcos. The NTCA told the Federal-State Joint Board on Universal Service that the plan “addresses the major problems with the current universal service program while controlling the size of the fund.” Other parts of the plan outlined in a letter sent Monday to the joint board: (1) The “portability of access cost recovery support to wireless carriers” should end. Access cost recovery support is part of the traditional universal service subsidy program for rural wireline carriers. (2) A commission proceeding should decide how to replace the identical support rule with “actual cost-based support” for competitive rural carriers such as wireless providers. (3) The joint board and the FCC should open a separate “universal service redefinition proceeding” to decide whether to include broadband in the definition of universal service and how to do so. (4) In the redefinition proceeding, the joint board should recommend that the FCC consider “a small broadband [universal service] pilot grant program available to small, medium and large landline and wireless non-rate-of-return carriers.” The program should be small so the high-cost fund doesn’t “increase dramatically” before the FCC can finish looking at longer term universal service and intercarrier compensation issues.

An FCC vote on whether to cap universal service subsidies to competitive rural telecom companies “hopefully” will occur in the “very, very near future,” FCC Commissioner Deborah Tate said Monday at a conference on Universal Service Fund reform. Asked to specify the timing, Tate said only FCC Chairman Kevin Martin can answer more definitively. She co- chairs the Federal-State Joint Board on Universal Service, which earlier this year recommended the interim cap to the FCC. Tate said she’s still pushing for a Nov. 1 deadline for the Joint Board to make another recommendation to the FCC on longer-term changes in the USF.

Telus Communications will pay the U.S. Treasury $450,000 to settle an FCC investigation into its failure to register as a common carrier or make regulatory payments. Last year, after the FCC contacted Telus, the Canadian company registered and made required payments into the Universal Service Fund, Telecommunications Relay Fund and North American Numbering Plan. It also paid annual regulatory fees.

Carriers of various sizes told the FCC they back a bid by Windstream to convert to price cap regulation (CD Aug 8 p9) -- but for different reasons. Big companies like Verizon saw Windstream’s regulatory shift as raising a prospect of savings in access charges and Universal Service Fund contributions. Midsized rural companies saw a chance to follow Windstream’s lead and gain flexibility themselves.