The communications industry is the 4th biggest contributor to congressional political campaigns, behind labor, financial services and health care, according to federal election reports and an analysis by PoliticalMoneyline. The industry’s political action committees (PACs) have given nearly $17.3 million this election cycle, compared with $18 million in 2003-2004 and $15.7 million in 2001-2002. Republicans got $11.1 million and Democrats $6.2 million during the 2005-2006 cycle, a split similar to the previous campaign’s.

Interconnected VoIP service will be eligible for universal service money under the E-rate program in the 2007 funding year, the FCC said. It was added to the Eligible Services List maintained by the Universal Service Administrative Co.

Reverse auctions might rein in burgeoning universal service costs, but there are pitfalls, panelists warned Thurs. in a program sponsored by the D.C. Bar. It’s an “interesting idea” but shouldn’t be the sole solution, said Eric Einhorn, AT&T exec. dir.-federal regulatory. Done right, it could be a “market-oriented” way to downsize the Universal Service Fund (USF) but “the devil is always in the details,” said CTIA Asst. Vp Paul Garnett. It would have to be implemented in a technologically- and competitively- neutral manner, he said.

NTCA has gone “country” in its latest pitch for Universal Service Fund provisions in the Senate telecom bill (HR-5252), which awaits floor action. The group put up a western-themed website featuring a movie with faceless, Lego- like characters clasping cellphones while they ride horses. “Phone, Phone on the Range,” sings a hillbilly voice accompanied by guitar. The song -- to the tune of “Home on the Range” -- laments the “big price to pay for staying connected out here.” NTCA is hoping the video will get on YouTube; it’s part of a viral marketing approach the organization is using to get its message out, a spokeswoman said. An N.D. company produced the clip, she said.

The Fla. Office of Public Counsel and AARP jointly asked the PSC to require that local phone providers automatically enroll in Lifeline programs any household that qualifies for state public assistance from the Fla. Dept. of Children & Families. The OPC and AARP said Fla. falls far below the national average for eligible households actually enrolled in Lifeline and said automatic Lifeline enrollment will do much to correct that. They said automatic Lifeline enrollment would help ease the net universal service deficit for Fla. They said the state pays $386 million in universal service fund contributions but receives only $137 million in support. In a related action, the PSC introduced a new website feature that allows eligible consumers to enroll online for Lifeline and Link-Up programs.

The Ohio Office of Consumer Counsel (OCC) asked the PUC to suspend Buzz Telecom’s right to solicit new customers while it investigates allegations of deceptive sales tactics to trick people into switching to its long distance services. The OCC complaint alleged Buzz salespeople misrepresented the company as a calling plan of the customer’s current carrier and advised customers to say “yes” to all questions asked in the verification process. The OCC also alleged that Buzz charged an untariffed $19.95 termination fee and overcharged customers on universal service fund assessments. Buzz faces charges of deceptive sales or cramming in several other states.

The FCC’s query about using reverse auctions (CD Oct 12 p6) for universal service support ended up drawing more than 50 comments, with a variety of views. NECA warned that “reverse auctions would effectively end rate of return regulation for rural ILECs, a result not contemplated” by the Federal-State Joint Board, where the proposal originated. Alltel said reverse auctions could be used to set the level of support, similar to “a forward-looking cost methodology,” but any carrier able to provide that price should be allowed to offer service. In other words, “auctions should not be used to select one or a limited number of eligible telecommunications carriers.” Verizon, joined by Verizon Wireless, said reverse auctions could be the solution to the over-extended Universal Service Fund (USF): “With the right design, a simple system of reverse auctions for high cost support could provide consumers, carriers and regulators with substantial benefits.” State regulators appeared to have mixed feelings about the reverse auction concept. The Ia. Utilities Board said it likes that auctions would reduce the number of USF-supported carriers but it’s concerned about the viability of incumbent rural carriers: “On the one hand, rural exchanges may represent the type of service territory where it makes the most economic sense to support only one network and an auction may incent carriers to seek operational efficiencies… On the other hand, existing incumbent networks have been constructed… in reliance upon continued receipt of universal service support. If that support were to suddenly be redirected to another network based on competitive bids, the existing universal service ‘investment’ in the incumbent network would be lost.”

Any Universal Service Fund reform should encourage participation by satellite broadband and other new technologies, the Satellite Industry Assn. told the FCC. The Commission fielded comments Wed. on using reverse auctions to improve USF distribution. Reverse auctions could “reveal various providers’ relative cost” of serving rural areas, SIA said, adding that satellite providers can serve rural communities efficiently and cheaply. To ensure satellite providers can participate effectively in reverse auctions, SIA said, the Commission should: (1) Not award set-asides, credits or other favorable treatments to incumbents. (2) Let satellite providers that provide broadband services on a non- common carrier basis keep that status. (3) Avoid restrictions such as service areas that give certain providers an edge over others. SIA also pushed for targeted USF pilot projects to prove satellite providers’ ability to bring telecom service to remote areas. “Reverse auctions could be used to award contracts to provide service to areas or individuals that currently lack access to any communications services,” SIA said. Pilot projects could focus on specific areas -- some tribal lands, for instance -- historically unserved by traditional telephony, SIA said.

Rural carriers are raising red flags about what could happen to some of the smallest carriers if the FCC institutes reverse auctions to make USF distribution more efficient. Comments varied widely on this and other proposals to restructure the distribution side of USF.

The University of Texas at Austin's Lyndon B. Johnson School of Public Affairs has issued a report for the Congressional Research Service which is entitled "Port and Supply-Chain Security Initiatives in the United States and Abroad".