New Jersey and Pennsylvania saw action on VoIP preemption bills. The New Jersey legislature passed a bill to prohibit the Board of Public Utilities or any other state agency from regulating VoIP or any other IP-enabled telephone service, except in 4 very limited areas. If enacted, HB-4339 would limit state VoIP jurisdiction to 911 fees, telecom relay service fees, universal service fund contributions and intercarrier compensation. The bill makes clear that VoIP preemption wouldn’t affect the state’s authority over cable TV franchises. A similar VoIP preemption bill was introduced in the Pennsylvania Senate. SB-1000 would prohibit the Public Utility Commission or any other state agency from regulating VoIP except with respect to 911 fees, telecom relay service fees, universal service fees and intercarrier compensation. Supporters said VoIP needs a free playing field to encourage investment and promote growth. The FCC preempted state regulation of VoIP-to-VoIP calls but hasn’t yet ruled on VoIP-to-wireline calls.

Arguments against capping universal service subsidies to competitive carriers are based on “short-term self interest rather than long-term public interest,” OPASTCO told the FCC. “Excessive growth in the High-Cost program that is threatening its sustainability is attributable solely to competitive ETCs,” said OPASTCO in reply comments on the cap proposal. On the other hand, extending the interim cap to all rural telecom companies would “seriously threaten” wireline rural carriers, OPASTCO said. “At greatest risk would be continued service to subscribers in the most remote and highest-cost regions that may not have other reliable service options,” said the group, which represents wireline LECs.

The FCC wants comments on Oblio Telecom’s request for a ruling that it is “unreasonable” for a wholesale carrier to refuse to honor a reseller’s “proof of exemption from Universal Service Fund pass-through charges.” Oblio told the FCC that “a wholesaler’s selective honoring of valid USF pass-through exemption requests from some reseller customers, but not other similarly-situated customers, and to selectively refund collected USF charges to some, but not others, constitute unjust and unreasonable discriminatory practices.” The FCC set July 19 for comments, August 3 for replies.

The Pennsylvania Public Utility Commission (PUC) voted against making Verizon let Lifeline customers buy telecom service bundles, citing procedural grounds. State Consumer Advocate Irwin Popowsky sought to amend a pending Verizon request for release from a requirement that it offer customers its least costly basic service option before trying to sell them a pricier option. Popowski said the telecom marketplace has swung strongly toward bundled services to save consumers money, a option Lifeline households should have. Verizon opposed the amendment, saying providing service bundles to Lifeline customers will further strain the universal service fund and contravene state legislature intent that Lifeline be a very basic service. Popowski said Pennsylvania consistently gets less than its fair share of universal service subsidies, and that Lifeline bundling wouldn’t cause Verizon any loss. The PUC voted 3-1 against amending the Verizon petition. The majority said Lifeline bundling has but a tenuous tie to the marketing restriction case and is a complex issue demanding separate litigation. Vice Chairman James Cawley, who cast the dissenting vote, said the majority’s decision for a separate Lifeline bundling case badly served low-income customers and said it would be a “waste of resources” to force Popowski to start over again with a new case.

The Washington Court of Appeals ruled a consumer’s billing suit against AT&T Wireless qualified as a certified class action. The ruling was on a consumer suit alleging AT&T from 1998 to 2003 unlawfully billed a “universal connectivity charge” as a government-mandated tax when it actually was recovering an overhead cost of AT&T’s assessment to support the federal universal service fund. The suit (Case No. 57523-6-I) alleged AT&T violated state consumer protection laws by misleading consumers into thinking the fee was a tax and violated contracts by increasing the fee without notice. Litigation so far was about whether the case should be tried as a class action. A state trial court had rejected class action status, saying plaintiffs failed to demonstrate a likelihood that all or most AT&T subscribers were deceived, and that class action status would provide a windfall to customers who had paid the fee without complaint. The appeals court, however, said deceptions in trade are unlawful in all transactions, regardless of whether an individual customer notices, so it’s enough for class-action status to show some customers were deceived into thinking the fee was a tax. The court remanded the case to the lower court for trial as a class action.

Use of health information technology, such as design and implementation of networks to share patient data, can’t mature without federal funding, speakers said Thursday at the Health Technology Showcase in Washington. The FCC role in expanding use of electronic health data is to push broadband deployment, said Commissioner Deborah Tate, calling an existing agency program for helping rural health care providers cover telecom and Internet costs “greatly underutilized.”

Chances are slim the FCC will act on intercarrier compensation (ICC) reform before 2009, a panel of Washington policy experts said late Wed. at the NXTcomm show in Chicago. Action this year is doubtful because the Commission is focused on more immediate matters, such as the 700 MHz auction, and ICC issues are notoriously difficult, panelists said. And 2008 is an election year, when less gets done in Washington, they said. The agency is likelier to take up only parts of the long-pending reform measure, such as phantom traffic or perhaps access charge pumping, said Verizon Vice President Kathy Grillo. “It’s hard to see the Commission moving the entire framework [of the complex ICC] issue forward,” said David Zesiger, senior vice president of Embarq. “At least, assuming the art of the possible, phantom traffic is possible,” given the fairly good chance the telecom industry could reach accord on it, he said. Asked by analyst Blair Levin if telecom issues might figure in election campaigns, Zesiger said “as a rule they don’t” but this time broadband deployment is a possibility. AT&T Senior Vice President Robert Quinn said he doubts it, since candidates will be running against President Bush’s record and telecom has had little impact on his record. “One potential election issue” is the proposed cap on wireless universal service subsidies, said U.S. Cellular’s Grant Spellmeyer. The cap plan being eyed by the FCC is a “potential homeland security issue,” he said. “I just don’t see shutting down handsets to areas of the country that are begging for them.” Moderator Levin asked what issues will face a new FCC chairman in 2009. “Universal service, intercarrier compensation and remaining parts of the IP enabled services” docket, said Zesiger. “Universal Service, intercarrier compensation and net neutrality,” Spellmeyer offered. The new chairman will face one more thing, said Levin: The February 17, 2009, DTV deadline. On another issue: Action is probable later this year on FCC Chairman Kevin Martin’s proposal to change the way carriers contribute to the Universal Service Fund, Zesiger said. Martin supports changing the contribution base from revenue to telephone numbers.

CHICAGO -- Long-promised innovations like ultra-speedy fiber networks and smart cellphones that replace wallets are here, executives of top communications companies said Wed. at the NXTcomm show. In his speech, Verizon CEO Ivan Seidenberg said his company, now trialing 100 Mbps speed in its FIOS Internet service, this fall will begin using “GPON” technology that boosts speeds four times downstream and eight times upstream.

Alltel said the Florida Public Service Commission did rural customers in the Quincy area of the panhandle region a disservice in deferring action Tuesday on its application for wireless eligible telecom carrier (ETC) status, which would qualify it to receive universal service subsidies. Alltel said the PSC deferral was inappropriate because it hinged on national universal service policy issues rather than the merits of Alltel’s petition. Alltel (Case 06-0582-TP) said the PSC shouldn’t have turned its ETC petition into a platform for debate on national problems arising from the extremely rapid growth of the federal Universal Service Fund. The PSC said it deferred action in the face of conflicting recommendations from its staff. Some staffers recommended granting the application because it met all legal requirements and would give customers more service options. But other staffers urged denial on ground that naming Alltel an ETC would contribute to the explosive growth of the federal Universal Service Fund, leading to higher universal service fees for all Florida phone customers. The PSC members who voted for the deferral said they acted not only because of the Universal Service Fund issues but also to ensure all issues related to the need for Alltel as an additional universal service provider in the Quincy area are addressed.

CHICAGO -- Recent merger activity among wireline phone operators likely will continue, with private equity groups in a limited role despite their larger presence in other sectors, telecom executives said Wednesday on a NXTcomm panel. Along with a “permissive” regulatory environment, the executives cited available capital and a desire among operators to scale up. “Absent a serious change in the capital supply, I think it will continue,” said Michael Prior, CEO of Atlantic Tele-Network.