Correction: The Coalition to Keep America Connected wants a temporary cap, not a permanent one (CD Aug 14 p12), on Universal Service Fund payments to competitive eligible communications carriers.

Sprint was right to fight a Kansas Corporation Commission ruling that carriers have to apply Lifeline discounts to any calling packages they offer, not merely the least costly one, Alltel told the FCC. Lifeline discounts, which the Universal Service Fund underwrites, reduce the cost of phone service for low-income residents. FCC rules clearly say carriers should apply Lifeline discounts to the “lowest tariffed (or otherwise generally available) residential rate,” Alltel said in Aug. 9 comments. Competitive carriers have no tariffs, so “the only proper application” of the language is application of the Lifeline discount to the “lowest otherwise generally available rate,” Alltel said. The Kansas commission “attempts to apply the Lifeline discount to all of the generally available rates of non- tariffed carriers,” which is “contrary to federal law and the FCC rules,” Alltel said. But the Kansas body told the FCC that by its reading of the same language discounts can be applied to any “generally available” rate. “The FCC has allowed carriers to apply the Lifeline discount to plans other than their lowest-cost plan,” said the Kansas regulators, and has “refused to adopt rules that would prohibit carriers from offering vertical services such as Call Waiting and Caller ID.” Sprint raised the issue with the FCC out of fear that the Universal Service Fund for Lifeline would not reimburse it for discounts applied to calling plans other than the lowest-cost one. However, the Kansas Corporation Commission said it checked with the Universal Service Administrative Company and was told USAC never has taken the position that the discount can be applied only to the lowest-cost rate. The California Public Utilities Commission backed the Kansans, saying it has a similar rule. It said it shared Kansas regulators’ concern that it might be discriminatory to limit Lifeline customers to one plan.

Twenty-four bills on broadband are pending in Congress, according to a Congressional Research Service report released Monday. The measures deal mainly with extending broadband access into rural areas, a hot topic for lawmakers up for reelection who have to answer to constituents without access to high-speed service. The bills suggest a variety of options, but many deal with using Universal Service Fund money to subsidize broadband buildout.

Three lawmakers urged FCC Chairman Kevin Martin to adopt a temporary cap on universal service subsidies to competitive eligible communications carriers, a move proposed by the Joint Universal Service Board. The Monday letters reflect a dogged campaign by the Coalition to Keep America Connected, lobbying for 4 rural telecom trade groups and about 800 small to mid-size communications companies. Since May, when the Joint Board backed the cap, coalition representatives have been meeting steadily with members of Congress (CD May 2 p1). The coalition hopes to get Congress to pressure the FCC to adopt a permanent cap, which wireless carriers oppose. The letters to Martin from Sen. Tom Coburn, R-Okla., and Reps. Lloyd Doggett, D-Texas, and Collin Peterson, D-Minn., said “virtually all of the growth in the USF is occurring in the competitive eligible telecommunication carrier (CETC) portion of the fund.” Earlier, 18 lawmakers urged the FCC to keep the cap, but no date is set for a decision. “I support the temporary cap if that will lead to reforms that will fix the broken subsidy structure,” Sen. Coburn said.

Twenty-four bills on broadband are pending in Congress, according to a Congressional Research Service report released Monday. The measures deal mainly with extending broadband access into rural areas, a hot topic for lawmakers up for reelection who have to answer to constituents without access to high-speed service. The bills suggest a variety of options, but many deal with using Universal Service Fund money to subsidize broadband buildout.

The Kansas Corporation Commission called for comment by Sept. 21 on whether it should require recipients of state universal service subsidies to formally certify they've used the state’s subsidies appropriately. Currently, carriers’ reports on how they use universal service subsidies lump federal and state funds together. The staff (Case 08-GIMT-154-GIT) suggested the idea that carriers itemize and certify their use of state support separately from their federal support. The commission asked parties to comment on whether the commission can impose a separate state subsidy certification requirement, what information carriers need to supply for state certification, potential for effects on federal universal service programs, and penalties for carriers that fail to use the state subsidies appropriately.

Hearings and letters to the FCC and NTIA on DTV consumer education will multiply in September, when Congress returns, Hill aides said in interviews this week. Senate Commerce Committee Chairman Daniel Inouye, D- Hawaii, told reporters he will convene a fall hearing on the DTV transition, saying a July 26 session convinced him “more needs to be done.” House Telecom Subcommittee Chairman Ed Markey, D-Mass., also will scrutinize consumer education efforts, an aide told us.

Windstream wants to convert from rate-of-return to price-cap regulation to improve its efficiency, it told the FCC in a petition seeking waivers needed to complete the change. About 60% of its 3.2 million lines are rate- of-return regulated and the rest price cap, the company said. Converting the rate-of-return properties would benefit the company in several ways, it said. It would be more efficient to have only one regulatory model, and the price cap rate structure is more suitable to a competitive company like Windstream, it told the FCC. The company operates in rural markets that “often are subject to fierce competition,” so it focuses on efficient operations rather than “maximizing universal service and regulated access revenues,” it said. Conversion also would benefit consumers and the industry as a whole because it would produce less drain on the Universal Service Fund and stable or reduced access rates, Windstream said. FCC rules allow rural carriers to move to price cap regulation but don’t provide a “pathway,” Windstream said. The company said it has proposed a “reasonable approach” that relies on the CALLS access charge reform order issued in 2000 but requires waivers of the universal service support mechanisms and one of the CALLS price cap rules. “The proposed waivers would provide interim relief” until the FCC “clarifies in a rulemaking how a rural ROR carrier can convert to price cap regulation,” Windstream’s petition said. Windstream said it wanted to do the conversion no later than July 1, 2008. The company was formed last year by a merger of Valor’s wireline assets with Alltel’s spun- off wireline business.

Most national, state and local governments have an online presence, and some sell online ads to help fund it, Brown University said. Governments are getting more information to more people more easily, but often sacrifice data privacy and security to do so, Brown’s study found.

The FCC will levy regulatory fees on VoIP providers starting this year, it said in an order issued Monday. The FCC said earlier this year it was inclined to seek fees from VoIP companies. Now that they have to pay into the Universal Service Fund, paying regulatory fees was a natural extension, the commission said. The FCC said Section 9 of the Communications Act gives the commission authority to impose regulatory fees on VoIP providers. The commission disagreed with the VON Coalition’s argument that the FCC can impose regulatory fees only “on entities subject to licensing or certification requirements.” To the contrary, “to construe section 9 as narrowly as the VON Coalition proposes would prohibit the Commission from recovering costs from providers that impose costs on the Commission,” said the order. FCC Commissioner Michael Copps said in a concurring statement he thinks a broad rulemaking should be opened to address possible adjustments in the way regulatory fees are collected. “In a rapidly-evolving communications marketplace, we need to look for ways to ensure that our regulatory fee methodologies continue to reflect the industries we regulate,” Copps said.