The Neb. PSC said VoIP providers are subject to state universal service fund assessments on the intrastate portion of their services. The PSC said the jurisdictional nature of VoIP calls can be found using their ultimate termination point, even though VoIP providers claimed it’s impossible to know where a VoIP call goes. The PSC (Case NUSF-40/PI-86) said if a VoIP provider can’t set a jurisdictional allocation based on a reasonable sampling of actual call data, the PSC will base the assessment on the FCC’s default safe-harbor allocation of 71.5% intrastate and 28.5% interstate. The PSC said this approach won’t put VoIP providers at an unfair competitive disadvantage but will result in “equitable contributions” toward the state USF. The PSC said the FCC hasn’t explicitly preempted states from requiring VoIP providers to pay into state universal service funds. The PSC disregarded VoIP provider claims that no portion of a VoIP call can be deemed jurisdictionally intrastate, and that VoIP as an information service is totally beyond state jurisdiction. The order will take effect April 1.

The FCC defended its management of the E-rate program as consistent with its historical organizational structure but said it could make changes to the administrative structure in light of the Govt. Accountability Office’s (GAO) critical review. On Wed., the GAO presented the House Commerce Oversight & Investigations Subcommittee its report on the FCC’s management of E-rate, which funds Internet and information technology equipment for schools and libraries. The GAO concluded there were structural flaws in the FCC’s management of E-rate, but the FCC said its use of a private organization to manage the program was similar to its establishment of the National Exchange Carrier Assn., which manages the access charge assessments. “Congress was well aware of that practice when it enacted the Telecommunications Act of 1996,” the FCC said in its written response to the GAO report. The FCC said it believes its current management structure of E-rate -- part of the universal service fund -- was consistent with congressional intent. The FCC also disagreed with GAO’s assessment that the FCC never conducted a comprehensive study of federal policies that would apply to E-rate. The FCC cited several separate reviews of policies relating towards USF and E-rate. The FCC acknowledged the GAO’s conclusion that performance measurements for E-rate weren’t comprehensive. It said the FCC has assigned additional staff to review the performance measurements. The FCC also said it has brought on more staff to catch up on back appeals, another flaw cited in GAO’s review. During the hearing, House Commerce Committee Chmn. Barton (R-Tex.) said E-rate fraud, waste and abuse, which has been investigated for nearly 2 years by the Oversight & Investigation Committee, was out of control and Congress must consider a legislative fix. House Commerce Committee ranking Democrat Dingell (Mich.) also agreed, saying he looked forward to joining with Committee leadership to “enact the reforms that the FCC either cannot, or will not, implement.”

The FCC defended its management of the E-rate program as consistent with its historical organizational structure but said it could make changes to the administrative structure in light of the Govt. Accountability Office’s (GAO) critical review. On Wed., the GAO presented to the House Commerce Oversight & Investigations Subcommittee its report on the FCC’s management of E-rate, which funds Internet and information technology equipment for schools and libraries.

SBC in Okla. defended itself against customer complaints about a new $3.33 fee on their SBC phone bills, saying the charge was approved by the Okla. Corporation Commission. The fee will let SBC recover its mandatory contribution into the state’s rural high-cost fund, part of the universal service program. SBC said the fee is assessed on all long distance providers but said it previously absorbed its assessment even though it doesn’t collect from the fund. It said in a competitive environment it no longer can afford to do so, and it received state regulators’ approval to pass the assessment along to long distance customers.

Wed.’s House Telecom Subcommittee hearing on VoIP focused mostly on how the new telecom service fits with the Universal Service Fund (USF) and intercarrier compensation. House Commerce Committee Vice Chmn. Pickering (R-Miss.) used the hearing to say he would reintroduce VoIP legislation. The bill will resemble legislation he introduced last year to preempt state regulation of VoIP, an issue apparently resolved by the FCC’s ruling in the Vonage petition. But Pickering said it was also “critical” to address intercarrier compensation in VoIP legislation. His bill would set a deadline for the FCC to finish reviewing intercarrier compensation regulations. Pickering suggested a deadline, and all witness at the hearing agreed. But Mark Shlanta, CEO of S.D. Network Communications, said the review period should be 12-18 months instead of the 180 days Pickering proposed. Pickering deemed a compromise of 9 months acceptable. House Commerce Committee Chmn. Barton (R-Tex.) asked the witnesses if they would support reducing or eliminating USF. “Reform it, don’t repeal it,” Carl Grivner, CEO of XO Communications, said of USF. Grivner said it should apply equally to all carriers, including cable VoIP providers. Barton asked if anyone on the panel would vote to repeal USF. When none replied, Barton said: “Now that we've determined that you're for USF, are you willing to pay into it?” Thomas Rutledge, COO of Cablevision Systems and representing NCTA, said cable is willing to support USF. However, he said an updated definition of USF is needed to clarify exactly what services USF funds could underwrite. House Telecom Subcommittee Chmn. Upton (R-Mich.) asked the witnesses if USF should be financed with a flat fee for each phone line. Most said no. Paul Erickson, SunRocket chmn., said assessing USF as a percentage of revenue would be the easiest. CenturyTel Pres. and COO Karen Puckett and Grivner said they would support a revenue percentage formula. Barton said he thought VoIP was a poor acronym for Internet phone service and suggested his own: BITS, for Broadband Internet telephone service. He said it was “food for thought” and he would consider other acronyms.

Wed.’s House Telecom Subcommittee hearing on VoIP focused mostly on how the new telecom service fits in with the Universal Service Fund (USF) and intercarrier compensation. House Commerce Committee Vice Chmn. Pickering (R-Miss.) used the hearing to announce he would reintroduce VoIP legislation. The bill will have similarities to the legislation he introduced last year. It was designed to preempt state regulation of VoIP, an issue apparently resolved by the FCC’s ruling in the Vonage petition. But Pickering said that it was also “critical” to address intercarrier compensation in VoIP legislation. His bill would establish a deadline for the FCC to finish its review of intercarrier compensation regulations. Pickering suggested a deadline, and all witness at the hearing agreed. But Mark Shlanta, CEO of S.D. Network Communications, said the review period should be 12-18 months instead of the 180 days Pickering proposed. Pickering said a compromise of 9 months would be acceptable. House Commerce Committee Chmn. Barton (R-Tex.) asked the witnesses if they would support reducing or eliminating USF. “Reform it, don’t repeal it,” Carl Grivner, CEO of XO Communications, said of USF. Grivner said it should be equally applicable to all carriers, including cable VoIP providers. Barton asked if anyone on the panel would vote to repeal USF. When none replied, Barton said: “Now that we've determined that you're for USF, are you willing to pay into it?” Thomas Rutledge, COO of Cablevision Systems and representing NCTA, said cable is willing to support USF. However, he said the definition of USF needed to be updated to clarify exactly what services could be provided with USF funds. House Telecom Subcommittee Chmn. Upton (R-Mich.) asked the witnesses if USF should be financed with a flat fee for each phone line. Most opposed such a system. Paul Erickson, SunRocket chmn., said assessing USF as a percentage of revenue would be the easiest system. CenturyTel Pres. and COO Karen Puckett and Grivner said they also would support a revenue percentage formula. Barton said he thought VoIP was a poor acronym for Internet phone service and suggested his own: BITS, for Broadband Internet telephone service. He said it was “food for thought” and he would consider other acronyms.

The General Accountability Office (GAO) found systemic weaknesses in the FCC’s oversight of the E-rate program. House Commerce Committee Chmn. Barton (R-Tex.) vowed to move legislation that would apply “common sense to the E-rate program.” At a hearing Wed. of the House Commerce Oversight & Investigations Subcommittee, the GAO said the FCC has been slow to respond to audits of E-rate recipients and has not developed useful goals and measurements for assessing the program. The GAO found that the FCC couldn’t evaluate how much E-rate contributed to improved Internet connectivity of public schools because E-rate funding isn’t separated from other state and local funding. FCC oversight of E-rate is flawed, GAO said, because the Commission mainly uses rulemakings, audits and appeals to oversee the program. FCC rulemakings often lack specificity and have resulted in distinctions between FCC’s rules and procedures put in place by the Universal Service Administration Co. GAO also noted there was an extensive backlog of audits. In a written statement, Barton said: “Unscrupulous vendors have fleeced the program while underserved communities and telephone customers are paying the price. The FCC, these merchants and certain schools all must share in the blame for this disgrace. Now, seven years and billions of dollars later, those in charge can’t tell us how rampant the fraud is or how they intend to stop it. Enough is enough.” Barton said E-rate reform could be part of an overall Telecom Act reform bill.

The General Accountability Office (GAO) found systemic weaknesses in the FCC’s oversight of the E-rate program. House Commerce Committee Chmn. Barton (R-Tex.) vowed legislation that would apply “common sense to the E-rate program.” At a hearing Wed. of the House Commerce Oversight & Investigations Subcommittee, the GAO said the FCC has been slow to respond to audits of E-rate recipients and has not developed useful goals and measurements for assessing the program. The GAO found the FCC couldn’t evaluate how much E-rate improved Internet public schools’ connectivity because E-rate funding isn’t separated from other state and local funding. FCC oversight of E-rate is flawed, GAO said, because the Commission mainly uses rulemakings, audits and appeals to oversee the program. FCC rulemakings, often vague, have resulted in distinctions between FCC’s rules and procedures put in place by the Universal Service Administration Co. GAO noted there was an extensive backlog of audits. In a written statement, Barton said: “Unscrupulous vendors have fleeced the program while underserved communities and telephone customers are paying the price. The FCC, these merchants and certain schools all must share in the blame for this disgrace. Now, 7 years and billions of dollars later, those in charge can’t tell us how rampant the fraud is or how they intend to stop it. Enough is enough.” Barton said E-rate reform could be part of an overall Telecom Act reform bill.

Senate Commerce Committee Chmn. Stevens (R-Alaska) laid out new communications-related ideas Wed. at a breakfast forum held by The Hill newspaper. He suggested changing sunshine rules for the FCC and the system for auctioning spectrum. Stevens clarified positions on indecency regulation and said he remained open to ideas for guarding children from raunchy TV. He left open how the proposed telecom mergers might affect universal service fund distribution.

NEW ORLEANS -- Local number portability was singled out as an example of “good regulation” emerging from the Powell FCC at several regulatory panels during the CTIA convention here. “I think local number portability will forever change” the wireless world, FCC Wireless Bureau Chief John Muleta said: “It’s amazing to me that churn went down” after LNP debuted, “because people invested in customer service. I think that was fantastic.” Triton CEO Michael Kilogris called LNP “an example of good regulation because competing forces in the industry weren’t going to voluntarily do that.”