Enough telecom industry representatives voted for a proposed intercarrier compensation plan to move it forward, NARUC’s Intercarrier Compensation Task Force said late Fri., which was the vote deadline (CD April 21 p1). NARUC said the task force now can review the plan. Meantime, the proposal may continue to go through “negotiations and refinement,” NARUC said.

A federal grand jury in Columbia, S.C. returned a 12- count indictment against a former school district official for a scheme to defraud the E-rate program. Cynthia Ayer, former technology dir. of Bamberg County School District One, Bamberg, S.C., was charged with making fraudulent applications for E-rate funding. The indictment, returned April 19, said she submitted $3.5 million in fraudulent applications for E-rate funding after awarding contracts to her own company, Go Between Communications, without competitive bidding. DoJ said Ayer has received $468,000 in payments from the Universal Service Administrative Co.

The Cal. PUC started a rulemaking to study whether to change existing universal service programs in light of technological advances and major changes to the telecom industry and regulatory regimes. The rulemaking will open with workshop sessions Apr. 25 and 28. The PUC said the 3 major state universal service programs reflect law and policy enacted the past 2 decades, but the system faces challenges from new technologies that have created new types of services and providers. A PUC staff report said universal service challenges include ensuring that all eligible for programs do participate, the role of newer technologies like VoIP and wireless in providing universal service, costs and benefits of including advanced services in programs and how to treat bundled services in universal service programs. On the funding side, the staff report suggested reviewing funding mechanisms to see if they ensure long-term support of programs, and considering what improvements are needed.

The FCC fined Northbrook, Ill.-based Globcom $715,000 for not paying into the Universal Service Fund or Telecom Relay Service Fund and not filing accurate revenue information on which payments are assessed. The FCC in late 2003 warned Globcom, a reseller of long distance telecom service, that it owed more than $681,000. The FCC said Globcom responded that it owed about that because its revenue filings were overstated through negligence. Communication between the FCC and Globcom continued since then. The FCC sought more information, for example on whether enough of Globcom’s revenue is international to reduce its payments into the funds. Globcom, meanwhile, missed filing deadlines. “Despite Globcom’s admission that it owes at least some portion of the invoiced amounts to the USF, and despite [a commitment] to make such payments to the universal service and TRS funds, Globcom has paid nothing to either fund since February 2003,” the FCC said. “In addition… the company has failed to file a single timely report” since the FCC issued the warning notice in 2003.

NextiraOne, about to plead guilty to E-rate fraud, urged the FCC April 14 not to debar it from the program, on grounds it has cooperated with DoJ in tracking the firm’s bad actors, an assertion DoJ seconded in a letter to the FCC also sent April 14. DoJ said NextiraOne will plead guilty tomorrow (Fri.) to one criminal count, with the parties filing a civil settlement agreement the same day, in connection with E-rate projects at the Pine Ridge Reservation schools in S.D. In the pact, DoJ agreed to document NextiraOne cooperation to the FCC. DoJ said the company was unusually cooperative in supplying information, including “extensive production of internal e-mails,” and in encouraging employees to “come forward and make themselves available for interviews,” DoJ told the FCC. “More important, NextiraOne has accepted full responsibility for the wrongdoing carried out by certain former employees,” DoJ said. The company fired individuals involved with the E-rate program, made restitution to the Pine Ridge Schools and reimbursed the Universal Service Fund, DoJ said. DoJ said it was able to trace the fraud to a business unit in NextiraOne “that pressured network technicians and administrative staff, who were, for the most part not familiar with the program’s rules and requirements, to go along with the fraudulent acts.” NextiraOne, in a petition to the FCC for waiver of E-rate suspension and debarment, said such waivers can be granted if “extraordinary circumstances” exist and that’s the case here. “Because NextiraOne already has taken extraordinary measures to protect the integrity of the E-rate program, debarment would unnecessarily punish the company and fail to promote important government objectives,” the company told the FCC. NextiraOne said it “has taken full responsibility for the actions of its former employees, including actions that occurred prior to formation of the company.” NextiraOne was formed in April, 2001, when Platinum Equity acquired 2 existing firms, Williams Communications Solutions and Milgo Solutions. Williams, already in the E-rate business at the time of the acquisition, formed the basis for the new company’s E-rate unit in late 2001. NextiraOne learned in late 2002 that a grand jury was investigating its involvement in the E-rate program, it said. The company was accused of seeking and obtaining E-rate funding for ineligible products and services.

NextiraOne, about to plead guilty to E-rate fraud, urged the FCC April 14 not to debar it from the program, on grounds it has cooperated with DoJ in tracking the firm’s bad actors, an assertion DoJ seconded in a letter to the FCC also sent April 14. DoJ said NextiraOne will plead guilty tomorrow (April 21) to one criminal count, with the parties filing a civil settlement agreement the same day, in connection with E-rate projects at the Pine Ridge Reservation schools in S.D. In the pact, DoJ agreed to document NextiraOne cooperation to the FCC. DoJ said the company was unusually cooperative in supplying information, including “extensive production of internal e-mails,” and in encouraging employees to “come forward and make themselves available for interviews,” DoJ told the FCC. “More important, NextiraOne has accepted full responsibility for the wrongdoing carried out by certain former employees,” DoJ said. The company fired individuals involved with the E-rate program, made restitution to the Pine Ridge Schools and reimbursed the Universal Service Fund, DoJ said. DoJ said it was able to trace the fraud to a business unit in NextiraOne “that pressured network technicians and administrative staff, who were, for the most part not familiar with the program’s rules and requirements, to go along with the fraudulent acts.” NextiraOne, in a petition to the FCC for waiver of E-rate suspension and debarment, said such waivers can be granted if “extraordinary circumstances” exist and that’s the case here. “Because NextiraOne already has taken extraordinary measures to protect the integrity of the E-rate program, debarment would unnecessarily punish the company and fail to promote important government objectives,” the company told the FCC. NextiraOne said it “has taken full responsibility for the actions of its former employees, including actions that occurred prior to formation of the company.” NextiraOne was formed in April, 2001, when Platinum Equity acquired 2 existing firms, Williams Communications Solutions and Milgo Solutions. Williams, already in the E-rate business at the time of the acquisition, formed the basis for the new company’s E-rate unit in late 2001. NextiraOne learned in late 2002 that a grand jury was investigating its involvement in the E-rate program, it said. The company was accused of seeking and obtaining E-rate funding for ineligible products and services.

A comprehensive telecom bill that Sen. Smith (R-Ore.) is working on would revamp franchising, let municipalities build broadband networks and expand universal service fund (USF) contributions, according to a copy we obtained. The bill incorporates 2 measures Smith introduced last year: A video services bill (S-1389) revoking the franchise process, and a USF bill (S-1583) expanding contributions to all 2-way voice services (CD Aug 2 p1).

A comprehensive telecom bill that Sen. Smith (R-Ore.) is working on would revamp video franchising, let municipalities build broadband networks and expand universal service fund (USF) contributions, according to a copy we obtained. The bill incorporates 2 measures Smith introduced last year: A video services bill (S-1389) revoking the franchise process, and a USF bill (S-1583) expanding contributions to all 2-way voice services.

Universal service support for rural wireless firms has grown “dramatically” the past year and soon will exceed $1 billion, McLean & Brown consultants said. At the same time, support for incumbent wireline telephone companies has been “essentially constant” since 2002, said the paper, an update of a March 2005 report by the Phoenix-based firm. The paper said incumbents face more than 6 wireless competitors in some rural areas, a further indication today’s fund distribution process for competitive carriers “is still fatally flawed and must be fundamentally reformed.” The paper said 58% of “study areas” set up for Universal Service Fund (USF) funding purposes have 2 or more wireless competitors and 29% have 3 or more. The report was financed internally, not commissioned by clients, said consultant Glenn Brown. It was praised by the Coalition to Keep America Connected, made up of incumbent telecom companies. “The paper notes that without fundamental reform of the portion of the program that subsidizes wireless [carriers], the entire fund is at risk,” the coalition said in a release. The paper said the FCC could ease the situation by: (1) Fixing the USF collection mechanism. (2) Limiting some rural areas to “just one carrier of last resort” eligible for USF support. “Not all areas can sustain multiple carriers without massively inefficient support,” the paper said. (3) Establishing separate funding mechanisms for wireline and wireless carriers. For most consumers, they are complementary products. (4) Reforming intercarrier compensation.

Mercedes-Benz USA weighed in on the debate over reform of the universal service fund contributions process, urging the FCC to exempt “core telematics” from any numbers-based system. Mercedes said core telematics is a vehicle-based public safety service relying on phone numbers and network airtime mobile carriers provide. Mercedes Tele Aid service, which links occupants of Mercedes vehicles to an emergency call center, is offered free for the first year, then costs $240 yearly, the car firm said. If the FCC wanted to levy USF contributions on telecom providers involved in core telematics transmission it could assess them under today’s revenue-based system, Mercedes said: “Although Tele Aid relies on phone numbers and CMRS airtime to enable customer vehicles to communicate with… call centers, Tele Aid does not provide the ability to call, or be called from, any other locations. Tele Aid is a public safety ‘information’ service, not telecommunications.”