Prospects of a slimmer Universal Service Fund (USF) with potentially higher charges for rural carriers is discouraging investment in the industry, panelists said Fri. at a Rural Telephone Finance Coop (RTFC)panel. “Any change in the regulatory environment gives us concern,” said Robin Reed, RTFC vp-portfolio management.

The Me. House passed a bill (HB-470) expanding the state Telecom Education Access Fund’s broadband scope to cover public health clinics as well as K-12 schools and public libraries. The fund subsidizes equipment and broadband facilities for qualifying entities. Funds for health clinics would be used to support telemedicine and electronic health records in rural or “medically underserved” areas. The bill goes to the Senate. The Me. House also saw introduction of a broadband development bill (HB-1471) that would create an Advanced Technology Investment Authority to identify unserved and underserved areas, and to find funding for wireless and wireline broadband deployment in those areas. The panel would include the PUC chairman, state CTO and 3 other appointed members. The bill would allow the new agency to draw on any surplus in the state universal service fund for its programs, and to authorize reimbursement of sales taxes paid on broadband infrastructure equipment in qualifying needy areas.

The Me. House passed a bill (HB-470) expanding the state Telecom Education Access Fund’s broadband scope to cover public health clinics as well as K-12 schools and public libraries. The fund subsidizes equipment and broadband facilities for qualifying entities. Funds for health clinics would be used to support telemedicine and electronic health records in rural or “medically underserved” areas. The bill goes to the Senate. The Me. House also saw introduction of a broadband development bill (HB-1471) that would create an Advanced Technology Investment Authority to identify unserved and underserved areas, and to find funding for wireless and wireline broadband deployment in those areas. The panel would include the PUC chairman, state CTO and 3 other appointed members. The bill would allow the new agency to draw on any surplus in the state universal service fund for its programs, and to authorize reimbursement of sales taxes paid on broadband infrastructure equipment in qualifying needy areas.

SAN DIEGO -- With net neutrality the burning issue at CompTel’s spring conference, FCC Chmn. Martin diplomatically said he'd with neither Bells nor CLECs. The jury remains out on points each side claims to know everything about, he said. And Martin warned against the Commission’s adopting rules preemptively. He briefly defended his Verizon forbearance decision, an anathema to the CompTel crowd. Competitive carriers voiced displeasure with the ruling and with what they call a trend toward a reconstituted AT&T monopoly, this one without the safeguards of regulation.

The Senate telecom bill will be an omnibus package including titles addressing franchising, Universal Service Fund (USF), net neutrality and broadband deployment, Senate Commerce Committee Chmn. Stevens said late Mon. at the Comptel conference. A final draft is expected to be marked up after the Easter recess, Stevens said. The most divisive legislative issue is net neutrality, Stevens said, with some lawmakers arguing for no regulation while others -- particularly the younger, new committee members -- want assurance that content and service providers have nondiscriminatory service and access to the Internet. On the other hand, there’s strong “support and great unanimity” in including provisions to speed broadband deployment, Stevens said. “The largest barrier to broadband entry is the current franchising structure,” he said. Stevens predicted the committee would agree on franchising terms such as percentage of revenue available to localities, whether there should be a uniform standard for the number of PEG channels and how to address public rights-of-way.

The Office of Communications (Ofcom) plans changes to U.K. universal service obligations (USO), it said Tues. The regulator has been reviewing USO to ensure it meets consumer needs amid changing demand and technology, balances needs of vulnerable users against commercial conditions and allows benefits to reach those who need them. Britain has 2 USO providers -- British Telecom (BT) for most of the country, Kingston for the Hull area, both required to provide public call boxes. Ofcom decided to allow district, metropolitan or equivalent councils to veto telcos’ decisions to remove an area’s last phone box, and extended a consultation period for proposed removals from 42 to 90 days. It will issue consultation guidance and a leaflet on the rules for phone box removals. To aid customers with disabilities, Ofcom said, it will create a stakeholder advisory panel on text relay. It intends to propose changing providers’ mandates for services to disabled customers. Ofcom left untouched provisions letting BT charge consumers for the excess cost of installing Internet connections and setting the minimum speed at 28.8 kbps. BT and Kingston USO funding will remain the same, but Ofcom will do a cost-benefit analysis on USO next year and could alter funding if USO provision becomes an unfair burden, it said. European Commission review of its e- communications regulatory framework, including the Universal Service Directive, “will be significant for the future evolution of the USO,” the regulator said.

Six major wireless carriers asked the Kan. Corporation Commission to alter the method used to determine the intrastate revenue base on which wireless carriers are assessed contributions to the state universal service fund. They said Kan. is different from other states in using customers’ billing addresses rather than place of primary use (PPU) as the basis for state universal service assessments. The carriers said PPU is the sourcing basis for taxes and fees throughout their service areas, and is used as the basis for state universal service assessments in most other states they operate in. The carriers said use of billing address in Kan. could put a Kan. wireless customer having multiple phones in a position of paying universal service fees in 2 or more states. The carriers said they incur significant expense in having to make Kan.-specific billing adjustments, and said basing future assessments on PPU rather than billing address would have a negligible effect on fund contributions.

The Kan. Corporation Commission settled questions over its service quality authority by ruling it can set different service quality standards for incumbent, competitive and rural local exchange providers, and that it has authority to impose service quality standards on wireless carriers getting state universal service subsidies. The questions arose in the KCC’s review of current service quality standards. The KCC (Case 05-GIMT-187-GIT) rejected AT&T contentions it couldn’t modify service quality standards for a particular class of carrier except to fix problems. AT&T also said increased standards for incumbents would be bad policy. But the KCC said AT&T’s argument for a one-size-fits-all service quality standard would lead to absurd results in a competitive market. The KCC on wireless services said if a wireless carrier elects to get state universal service funds, it elects to come under state service quality regulation. Despite these conclusions, the KCC said it need not change its service quality rules and standards now, since existing market competition is providing consumers with good-quality service. Petitions for reconsideration must be filed by Mar. 22.

The universal service fund (USF) has hidden costs well beyond what subscribers pay into the program, since taxes usually reduce use of services, Jerry Ellig, senior research fellow at George Mason U.’s Mercatus Center, said Thurs. during a USF discussion at the Digital Age Communications Act conference. A new study puts those hidden costs at $2 billion a year, about 1/2 what the program brings in, Ellig said.

House and Senate lawmakers agree on a narrow telecom bill that includes a federal franchising framework and Universal Service Fund provisions, numerous Hill and lobbyist sources said. The House Commerce Committee is moving more quickly on its bill and could release a draft as early as Fri., Chmn. Barton (R-Tex.) told reporters. Senate Commerce Committee Chmn. Stevens (R-Alaska) vowed to complete his telecom reform hearings, but said staff is proceeding with draft legislation he hopes to have ready by mid-April.