Communications Services Integrated (CSI) agreed to pay $250,000 to the U.S. Treasury to settle an FCC enforcement proceeding against the company for failing to make contributions to the Universal Service Fund. The payment is less than the $462,638 that the FCC originally planned to fine the telecom provider. The FCC said CSI justified a request for a “downward adjustment.” In addition, the company has submitted all “worksheets” required of USF contributors and has paid past due debts, the FCC said.
The FCC is working with OMB on a written interpretation of rules that would exempt the Universal Service Fund (USF) from Anti-Deficiency Act accounting rules, Senate sources said. ADA rules require funding to be in place before expenditures are made, which is difficult in a program like USF. Sen. Rockefeller (D-W.Va.) asked FCC Chmn. Martin about the status of negotiations with OMB at Martin’s renomination hearing last week. Martin told Rockefeller that he could provide details on the talks “soon.” Sources said the FCC had OMB’s oral assurance it would exempt USF from the accounting rules when the nomination of FCC Comr. McDowell up for Senate consideration. That was to be followed up with a written agreement later, making unnecessary legislation backed by Rockefeller and other senators to make the exemption permanent, Senate sources said.
The FCC levied a $237,992 fine against Telecom Management Inc. (TMI) for not contributing to the Universal Service Fund or paying regulatory fees. The Me.-based company offers long distance plans, toll-free numbers and phone cards by reselling Global Crossing services. The FCC said TMI didn’t contribute to the USF “despite having collected several hundred thousand dollars in USF fees from its customers.”
The FCC fined OCMC Inc. $1.13 million for not paying into the Universal Service Fund (USF). Seeking a reduced penalty, the operator services provider and telecom reseller called the sanction “inequitable” given its financial straits. The FCC rejected that claim, saying USF worksheets from OCMC show “its gross revenues are in the tens of millions of dollars and have been for several years.” OCMC “willfully and repeatedly violated our rules,” the FCC said. Last year, when issued a notice of apparent liability (NAL), the company owed more than $2 million to USF, the FCC said. OCMC made no USF payments in 2 of the 12 months since the NAL and only partial payments in 7 of those 12 months, the FCC said.
The FCC Wireline Bureau granted 128 appeals in cases in which the Universal Service Administrative Co. (USAC) denied or reduced E-rate funding because applicants didn’t file Form 486 on time. The bureau action gives USAC 90 days to either approve or deny the applications for funding. Under E-rate rules, once applicants get a funding commitment letter from USAC they must file Form 486 to tell USAC service has begun. USAC should clarify its rules and develop methods to “better inform applicants of approaching FCC Form 486 filing deadlines,” the FCC said Many applicants call the process “complicated and time-consuming,” the FCC order said.
The FCC Wireline Bureau granted 128 appeals in cases in which the Universal Service Administrative Co. (USAC) denied or reduced E-rate funding because applicants didn’t file Form 486 on time. The bureau action gives USAC 90 days to either approve or deny the applications for funding. Under E-rate rules, once applicants get a funding commitment letter from USAC they must file Form 486 to tell USAC service has begun. USAC should clarify its rules and develop methods to “better inform applicants of approaching FCC Form 486 filing deadlines,” the FCC said Many applicants call the process “complicated and time-consuming,” the FCC order said.
The FCC is still on target to act on the proposed AT&T- BellSouth merger by mid- or late Oct., FCC Chmn. Martin said in a UBS conference call Thurs. That’s when the agency’s self-imposed 180-day clock for action on the merger runs out, he said. Asked if the federal court review of the SBC-AT&T and Verizon-MCI mergers could delay FCC action on BellSouth, Martin said the Tunney Act review is mainly directed at DoJ’s merger review, so he doesn’t think it will affect the FCC’s timing. On another issue, he said the agency is sensitive to the effect on rural telephone companies of any changes in intercarrier compensation or universal service. Rural carriers rely on these programs financially so changes have to be made in a way “that respects rural carriers'” dilemma, Martin said. The arrival of competitors also eligible for universal service subsidies has placed a big strain on the program, he said. A solution may be to institute reverse auctions for universal service funding, he said. Another may be to base universal service payments to competitors on their actual costs of providing service, he said. Competitors now receive payments based on the incumbent telecom company’s costs, which usually are higher because of infrastructure investments, he said. Asked about net neutrality, Martin said the FCC believes in a “balance” in which network providers “can’t block access to websites, but can manage their networks” by charging different prices.
FCC Chmn. Martin tried to reassure dubious Senate Democrats during his renomination hearing Tues. that the agency will take a fresh approach to its media ownership rulemaking. He won points for scheduling the first of 6 planned field hearings in Cal. -- a nod to Senate Commerce Committee member Boxer (D-Cal.) who has been critical of the agency’s pace in taking up the proceeding (CD Sept 12 p4).
The Kan. Corporation Commission (KCC) decided to switch the basis for state universal service fund assessments on wireless carriers to customers’ place of primary use (PPU) instead of to their billing addresses. The commission was responding to pleas from the state’s major wireless carriers to change the assessment basis to bring it into line with a billing policy adopted at the federal level and by most states for assessing many types of wireless taxes and regulatory fees. The wireless carriers had argued that use of billing address might subject customers with multiple phones to universal service assessments in multiple states, and impair the operating efficiency of centralized billing systems built around use of PPU. The commission staff backed the assessment change. In a related action, the KCC decided to keep a policy of excluding revenue from non-voice services such as ring tones and media downloads from retail wireless gross receipts for regulatory assessment purposes. The KCC agreed such services are data, not telecom, and generally interstate in nature. In another universal service matter, the KCC said it plans to open a docket soon to decide state universal service fund obligations of VoIP providers. The KCC said it’s had inquiries from several VoIP providers regarding whether they must contribute to the state fund and file reports.
Cal. Gov. Arnold Schwarzenegger (R) signed 2 telecom bills. The first gives the PUC the option to use e-mail and Web site postings to inform parties of orders and notices. Previously, the PUC had to use the U.S. mail to send orders and notices, even for noncontroversial matters. Under AB- 2390, the issue date for court appeal purposes will be the date of the e-mail or Web site posting. The 2nd (AB-326) gives the PUC unrestricted authority to develop, implement and maintain universal service programs. The act’s intent is to put the legislature on record as being aware that raiding the state universal service fund to cover general state expenses would compromise public health and safety.