Sen. Burns (R-Mont.) is drafting a bill to revamp the universal service fund (USF), expanding the contribution base and redistributing funding, Senate sources said. Sens. Rockefeller (D-W. Va.) and Snowe (R-Me.) are working with Burns on the bill, expected to be introduced early in Sept., Senate sources said. It’s likely to differ from the Smith-Dorgan bill (CD Aug 2 p1), which would apply USF contributions to all 2-way voice services and establish a separate fund for broadband deployment in rural areas.
The FCC said it plans to fine 2 carriers $1.5 million for not paying Universal Service Fund (USF) contributions and regulatory fees. The agency issued a Notice of Apparent Liability (NAL) proposing a $1.33 million fine against OCMC Inc. for not making USF contributions and a fine of $280,000 against Telecom Management Inc. (TMI) for not paying USF contributions or regulatory fees. The FCC action shows “a no tolerance policy” on carriers that fail to make such payments, the FCC said. OCMC is an operator service provider, interexchange carrier and toll reseller. It told the Commission it hadn’t paid because it was in a billing dispute with the Universal Service Administrative Co., which handles collection of USF contributions. But the FCC said “the existence of this billing dispute does not excuse OCMC’s violations” because carriers can’t “engage in self-help” by not paying fees during a billing dispute. TMI sells long distance, toll-free service and phone cards by reselling service purchased from Global Crossing and hadn’t registered as a reseller. Registration is necessary to be subject to the FCC’s fee programs. The companies have 30 days to pay the fines or file a written statement seeking a reduction or cancellation.
In the young world of university-provided digital media services, details matter to students, as Ruckus Network learned last week. American U. in D.C., which did a trial with Ruckus this spring semester, decided not to renew the contract for the 2005-06 academic year.
The FCC voted at its open meeting Fri. to reduce regulation of wireline broadband service by reclassifying it as an “information service,” in line with the FCC’s treatment of cable modem service. The U.S. Supreme Court in June upheld the agency’s cable modem classification in the Brand X case, triggering action on the wireline companion piece which had been placed on hold during the litigation.
The FCC voted at its open meeting Fri. to reduce regulation of wireline Internet access service by reclassifying it as an “information service,” in line with the FCC’s treatment of cable modem service. The U.S. Supreme Court in June upheld the agency’s cable modem classification in the Brand X case, triggering action on the wireline companion piece which had been placed on hold during the litigation. DSL is the most common wireline Internet access service.
As FCC staff and commissioners continued negotiating over terms of the proposed wireline broadband order Thurs., lobbyists continued blitzing commissioners’ offices to make sure their views were reflected in the talks. At our deadline it still wasn’t known if the agency would get enough agreement on contested issues to place the broadband item on today’s (Fri.’s) agenda. The FCC had delayed its Thurs. meeting until today, reportedly to give it more time to reach consensus. The item would generally lessen regulation of wireline-provided broadband service by reclassifying it as an information service. However, judging from the continual discussions at the agency, there appeared to be many nuances within that general description of the proposed order.
As FCC staff and commissioners continued negotiating over terms of the proposed wireline broadband order Thurs., lobbyists continued blitzing commissioners’ offices to make sure their views were reflected in the talks. At our deadline it still wasn’t known if the agency would get enough agreement on contested issues to place the broadband item on today’s (Fri.’s) agenda. The FCC had delayed its Thurs. meeting until today, reportedly to give it more time to reach consensus. The item would generally lessen regulation of wireline-provided broadband service by reclassifying it as an information service. However, judging from the continual discussions at the agency, there appeared to be many nuances within that general description of the proposed order.
Napster and Tower Records unveiled a joint venture Wed. to launch Napster’s popular digital music service in Japan within a year. The partnership will work at first out of Tower’s Tokyo hq under its own board. The announcement marks Japan as Napster’s next major market after the U.S., U.K., Canada, and soon-to-be-launched Germany, the company said. This is the first time the digital music company has set up a joint venture to launch service in a country. Tower will contribute up to $7 million and undertake additional funding obligations in exchange for about a 70% majority equity stake in Napster Japan. Tower will also provide most of the management team, plus local music content and extensive marketing for the service through its 108 retail stores and its websites. Napster will pitch in up to $3 million, plus its technology platform and music library for a 30% stake in the new venture, the company said. Meanwhile, Napster announced its 5th consecutive quarter of double-digit revenue growth. Revenue from continuing operations for the first quarter of 2006 grew to $21 million, 167% over the prior year quarter and a 21% increase from $17.4 million in the 4th quarter of 2005, the company said. Net loss was $19.9 million for the quarter. For the 3-month period ended June 30, paid subscribers -- excluding university subscribers on summer break -- grew by 13% quarter over quarter and almost 300% from the previous year. Not counting college deals, Napster’s subscribers grew from 356,000 to 402,000 during the quarter. Napster ended the period with $126.6 million cash and $14.2 million worth of Sonic Solutions stock.
Members of the Rural Alliance urged FCC staff to tread carefully in lessening regulation of wireline broadband services so it doesn’t “inadvertently” harm universal service or intercarrier compensation. Among other things, the FCC should “take measures to ensure that the universal service funding mechanism is not… adversely impacted,” the group said in a July 29 ex parte filing describing a meeting with FCC staff the day before. “All services, including broadband services, that utilize the communications infrastructure should continue to pay for the use of that infrastructure,” the alliance said: “Irrespective of the technology used to provide broadband service, and regardless of whether the service is offered as a telecommunications service or an information service, the contribution obligation to universal service should not be affected.”
Universal service fund (USF) contributions would be applied to all 2-way voice services -- including VoIP -- under a bill introduced late Fri., just before the summer congressional recess. Sponsored by Sens. Smith (R-Ore.), Dorgan (D-N.D.) and Pryor (D-Ark.), the bill broadens the base of contributors and establishes a separate fund capped at $500 million a year to encourage broadband deployment in rural, “unserved” U.S. areas.