A federal court Fri. vacated part of an FCC order under which VoIP providers must contribute to the Universal Service Fund (USF). A 3-judge panel of the U.S. Appeals Court, D.C., said it found “the Commission’s explanation wanting as to the pre-approval of traffic studies and the suspension of the carrier’s carrier rule.” Judges Harry Edwards, David Tatel and Merrick Garland heard the case brought by Vonage and CCIA, with Tatel writing the opinion.

The FCC should exempt carriers serving tribal lands from a proposed cap on universal service subsidies to competitive carriers, General Communications Inc. (GCI) said Thurs. in an ex parte letter to the FCC and staff. The alternative is impeded deployment of services to these hard-to-serve areas, the Alaska-based company told the FCC. Under a plan by GCI, the cap exclusion would apply to services on tribal lands and Alaska native regions defined under the Alaska Native Claims Settlement Act. A CETC (competitive eligible telecom carrier) serving a tribal area could avoid a cap only by offering broadband service over its own facilities to 50% or more of tribal area households, “with a commitment to increasing coverage to at least 80% of the households over the next three years,” GCI said. The carrier proposed an initial broadband standard of 400 kbps, rising to 1 Mbps over the 3 years. “Compliance would be verified by certifications and supported by reporting requirements,” GCI said. Uncapped support would be limited to “one payment per each residential account,” so subsidies couldn’t be used to fund multiple lines or handsets in a single household. “A cap exclusion crafted in this way will ensure that a cap will not unintentionally… deepen the divide between today’s communications haves and have-nots,” GCI said. Comments on the proposal by the Federal-State Joint Board on Universal Service to cap CETC subsidies are due June 6 at the FCC.

The FCC should create a pilot program that pays for broadband deployment in rural areas with “a specified amount of funding, such as $1 billion per year,” AT&T recommended Thurs. in comments on a Universal Service Fund (USF) revamp. A 2nd program could provide for money mobile wireless service in those areas, the company said. “Rather than attempting to use the current federal high cost [USF] mechanism to achieve its broadband deployment objectives, the Commission must approach the problem head-on,” AT&T wrote.

Capping universal service support to competitive eligible telecom carriers (CETCs) may be seen now as an interim measure but easily could become the norm, Rep. Allen (D-Me.) told FCC commissioners in a May 22 letter opposing the proposal. “My worry is that this action will act as a pressure valve and decrease the urgency for broader reform,” Allen said. Me. has 2 wireless ETCs “that have productively used universal service funds to expand service to remote areas in our largely rural state,” Allen said: “It is not fair that residents in rural Maine should lose the access to modern telecommunications services under a one-size-fits-all cap.” Comments to the FCC on capping Universal Service Fund (USF) subsidies to CETCs are June 6, replies June 13. The Federal-State Joint Board on Universal Service recommended the cap. The comment deadlines awaited Wed. Federal Register publication of a notice of proposed rulemaking based on the joint board proposal (CD May 15 p9).

N.Y. residents would pay $150 million more into the Universal Service Fund (USF) if the contributions system is changed as proposed, consumer groups said Tues. Contributions are made by telecom providers, which charge consumers for them. Plans to shift from a revenue-based payment to a per-connection charge, such as one based on phone numbers, would boost N.Y.’s share from $407 million to $555 million, said the League of United Latin American Citizens, N.Y. State Alliance for Retired Americans and the Keep Universal Service Fund Fair Coalition. The connections- based proposal would “take a bad situation and make it even worse” because New Yorkers already pay more into the fund than they get back, the groups said in a press teleconference. Accusing “big phone companies” of pushing the connections system, the groups said the FCC shouldn’t move from “a consumer-friendly, pay-for-what-you-use tax on long-distance to a regressive per-connection charge that would be imposed on every phone line whether or not consumers made any long distance calls at all.”

SAN FRANCISCO -- A Cal. broadband-divide fund will “push the envelope” as it attempts to balance advocating regulatory reform in Cal. and at the federal level and keeping its not- for-profit status, the CFO said. The state PUC required AT&T and Verizon to finance the Cal. Emerging Technology Fund (CETF) to get merger approvals, the fund’s CFO, Rich Motta, said Mon. night at a meeting of Women in Telecommunications here. In its work catalyzing broadband’s spread, the Cal. fund has much to learn from success stories in Ida. and especially Ky., Motta said.

Pitching his broadband bill (HR-2054), Rep. Terry (R- Neb.) told FCC Comr. Tate in a recent letter that he agrees with a recent Joint Board decision to put an interim cap on the Competitive Eligible Telecom Carrier fund. The cap is a “good first step in Universal Service Fund reform,” Terry said, adding that other measures, such as those in the bill he co-sponsored with Rep. Boucher (D-Va.), are needed to make the fund “sustainable.”

Pitching his broadband bill (HR-2054), Rep. Terry (R- Neb.) told FCC Comr. Tate in a recent letter that he agrees with a recent Joint Board decision to put an interim cap on the Competitive Eligible Telecom Carrier fund. The cap is a “good first step in Universal Service Fund reform,” Terry said, adding that other measures, such as those in the bill he co-sponsored with Rep. Boucher (D-Va.), are needed to make the fund “sustainable.”

SAN FRANCISCO -- A Cal. broadband-divide fund will “push the envelope” as it attempts to balance advocating regulatory reform in Cal. and at the federal level and keeping its not- for-profit status, the CFO said. The state PUC required AT&T and Verizon to finance the Cal. Emerging Technology Fund (CETF) to get merger approvals, the fund’s CFO, Rich Motta, said Mon. night at a meeting of Women in Telecommunications here. In its work catalyzing broadband’s spread, the Cal. fund has much to learn from success stories in Ida. and especially Ky., Motta said.

The Mont. PSC is eyeing retail or wholesale rate cuts for Qwest to ensure its ratepayers benefit from sharp increases in the company’s federal universal service subsidies the last 10 years. In 2005 the PSC opened an inquiry on Qwest’s use of universal service high-cost support funds (Case D2005.6.105). In the latest docket report, the PSC said Qwest’s annual universal service subsidy jumped from $1.3 million in 1996 to $16 million yearly for 2004-06. Qwest said universal service subsidies go to add, upgrade and maintain network facilities in its high-cost areas; the PSC noted Qwest’s gross network investment statewide fell from $52.6 million in 1996 to $24.6 million in 2005. The PSC said Qwest’s gross construction cost has fallen more than 50% since 1996, as its universal service subsidies “have increased dramatically.” Qwest said universal service support doesn’t offset its rural network construction expenses so its rates should stay the same. But the PSC said that while there’s no evidence Qwest improperly uses universal service subsidies, “it is difficult to pinpoint exactly where the USF money is going,” or verify that Mont. customers get maximum benefit from the subsidies. The PSC said it may order direct ratepayer benefits of $8-$10 million via a cut in basic exchange rates, killing Qwest’s monthly extended area calling surcharge, or implement MCI’s proposal to cut Qwest intrastate access charges. The PSC hired a consultant to study these and other alternatives for using Qwest’s universal service revenue to benefit ratepayers. The consultant’s report is due June 12; Qwest’s response, July 19. Data requests must be completed by Aug. 30, and hearings will open Sept. 26.