With universal service fund (USF) charges soaring for wireline and wireless carriers alike, the Bells, long- distance providers, rural phone companies, mobile carriers and cable TV operators are pressing for changes in the funding formula. But that’s where agreement ends.

When the USF was new, Franklin Roosevelt wasn’t halfway through his first term. Even so, the venerable program still has a startling capacity to make news.

The House Appropriations Committee Tues. reported out a multiagency FY06 funding bill that includes $290 million for the FCC. The measure, which authorizes funding for science, state, justice, commerce and related agencies, is expected to reach the House floor next week. The bill attracted amendments, including a controversial provision by Rep. Northup (R-Ky) and opposed by House leadership, the House Ways and Means Committee and Justice Dept. that would pave the way for drug reimportation. The committee said in its report it was “disappointed” with the FCC’s budget request and directed the agency to submit a spending plan within 30 days of the bill’s enactment. The agency needs to show greater detail in its FY07 request about its “reprogramming notifications” in a manner “that promotes competition, innovation and deregulation in the communications industry.” The FCC made progress addressing concerns the committee had raised about FCC employees’ acceptance of travel payments from sources with business interests before the agency, the report said. But it added that the FCC should extend its ban on nongovt.-sponsored travel to all FCC employees. The committee also said it is “troubled” by problems uncovered in the universal service fund, and expects the FCC to give “high priority” to fight waste and fraud.

CHICAGO -- FCC Chmn. Martin said Tues. the Commission may hold more hearings like the one it held before voting last month on E-911 capability for VoIP customers. Customers harmed by the inability to reach 911 dispatchers testified at the meeting where the vote was taken. In a Q-&-A session with USTA Pres. Walter McCormick and TIA Pres. Matthew Flanigan at the Supercomm show, Martin also said his top priority is to make sure FCC actions encourage broadband deployment and “create a level playing field for providers who are starting to converge.” Another priority is “identifying spectrum” and making sure it’s provided flexibly, he said. Asked about the policy debate over local franchising of wireline-provided IP video, Martin said he’s “sympathetic with the concerns” about “local franchising requirements becoming a barrier” to new video entrants. “It’s important to recognize the benefits of additional competitors,” he said. Martin also said the FCC has decided the high-cost universal service fund doesn’t violate the Anti-Deficiency Act (ADA), which didn’t get much publicity. Concerns about the ADA’s impact on the E- rate program led late last year to emergency legislation by Congress.

Interplay Entertainment lost $4.73 million (5 cents per share) in its fiscal year ended Dec. 31 vs. a $1.31 million profit (1 cents) a year ago, the videogame publisher revealed in a 10-K SEC filing late last week. The struggling firm again said that it has “no cash reserves” left and is “unable to pay current liabilities.”

The FCC Office of Inspector Gen. (OIG) made “significant progress” in designing and carrying out its Universal Service Fund (USF) oversight program, but “more work remains to be done,” OIG said in a semiannual report to Congress. “The primary obstacle to implementation of effective, independent oversight has been a lack of adequate resources to conduct audits and provide audit support to investigations,” OIG said: “This lack of resources has prevented us from completing the body of work necessary to assess fraud, waste and abuse at the program level.” But progress has been made. OIG added 2 people, bringing to 5 the number of employees dedicated to USF oversight, and expects to get 2 more. OIG said it sought $3.17 million for USF oversight in the FY2006 budget and began to explore alternatives for getting contract audit support. “Through our participation in the fourth large-scale round of E-rate beneficiary audits with USAC and through audits that we anticipate conducting under our 3-way agreement with USAC we are moving forward to evaluate the state of the program and identify opportunities for programmatic improvements,” OIG said.

Infinium Labs revealed in a 10-QSB SEC filing this week that it lost $50.06 million from inception in late 2002 through March 31. Its loss for the quarter ended March 31 widened to $14.06 million (11 cents per share) from $6.24 million (7 cents) a year ago but its operating loss narrowed to $3.65 million from $6.15 million. It reported an operating loss to date of $33.95 million.

No other carrier group has offered a solution better than the Intercarrier Compensation Forum’s (ICF’s) to unify the telecom industry’s outdated, confusing array of intercarrier compensation schemes, ICF told the FCC in comments filed late Mon. The cross-industry group -- which includes AT&T, Global Crossing, Level 3, General Communications, Iowa Telecom, MCI, SBC, Valor Telecom and Sprint -- is the most visible of several industry groups that have proposed plans to the FCC.

Rep. Cubin (R-Wyo.) introduced a bill (HR-2533) late Mon. that permanently would exempt the Universal Service Fund (USF) from Antideficiency Act (ADA) accounting standards. The bill is a companion to S-241, introduced by Sens. Snowe (R-Me.) and Rockefeller (D-W.Va.). The ADA bars federal agencies from incurring obligations in advance of appropriations. The FCC last year ruled the ADA applies to the USF, meaning the fund administrator would have to have cash on hand before sending commitment letters to fund recipients. The immediate impact was on the E-rate program, but rural ILECs fear their payments also could be affected. Congress in Dec. passed a bill exempting the USF from the ADA through 2005.

After emotional testimony from victims of VoIP- related 911 glitches, the FCC Thurs. ordered VoIP providers to give customers full E-911 service within 120 days. E-911, or enhanced 911, means a 911 caller’s location is transmitted and can be viewed by emergency dispatchers on a screen.