A private ALTS document prepared for a meeting of the association’s board mistakenly landed on the FCC’s website as an ex parte filing Sept. 27, making public ALTS’ assessment of FCC commissioners’ attitudes toward CLECs, the association’s revenue and dues structure and its lobbying strategy. The document was taken off the website a day later -- but not before a number of corporate attorneys throughout the Washington communications community had seen it. A Bell official said the item “circulated relatively widely” because most corporate regulatory attorneys “do a sweep” of the ex parte filings every day. The mistake happened because a Swidler Berlin Shereff & Friedman lawyer, working for small CLEC Alpheus, filed the ALTS document instead of an Alpheus ex parte in the FCC’s TRO proceeding. An Alpheus official was among those invited to ALTS’ Sept. 28-29 board meeting in Washington. “It’s a warning for all attorneys in town,” said the Bell official. The profiles of FCC commissioners appeared to be the most talked about feature. Among assessments: (1) Comr. Martin “now that he lost the fight on UNE-P, appears to be fighting less hard for CLECs.” (2) Comr. Copps’ “unwillingness to compromise could be problematic,” although he’s a “strong CLEC advocate.” (3) Comr. Adelstein “generally follows Copps’ lead.” (4) Chmn. Powell is likely to support President Bush’s broadband agenda “before the election.” (5) Comr. Abernathy “will follow the lead of the chairman.” Asked about the assessments, an aide to one commissioner said: “No comment. They made a mistake. We're not commenting.” In addition, members of Congress were listed as “positive” or “negative” on CLEC issues. For example, House Commerce Committee Chmn. Barton (R-Tex.) was listed as negative, Sen. Stevens (R-Alaska) as positive. Reflecting the technology bust that started several years ago, the document shows ALTS membership is down to about 1/4 of 1998 levels, and revenue is just slightly above $1 million, compared with about $2.5 million in 2000. Among strategies contemplated by the document, written by ALTS Pres. John Windhausen: (1) Developing an alliance with ISPs by endorsing VoIP deregulation in return for intercarrier compensation support. (2) Seeking an alliance with equipment manufacturers by offering CLEC build-out guarantees in return for support for a stronger UNE policy. (3) “If the debate turns against us” ALTS might consider taking a stronger step by suggesting “an end to UNEs at a specific date in return for strengthening UNE provisioning today.” (4) Another step to consider if ALTS begins losing the debate is opposition to “allowing wireless companies to become ETCs,” a move that might “strengthen an alliance with the rural ILECs in return for their opposition to RBOC legislation.” The paper says that last strategy might “split USTA.” A USTA spokeswoman said this “divide and conquer” strategy is “nothing more than wishful thinking.” USTA’s members are “extremely unified and are focused on working together to help stabilize the Universal Service Fund and bring market- based competition to the telecom industry.” Windhausen said the document was a discussion draft designed to “tee up issues for discussion,” not something approved or reviewed by members. He said he had apologized to officials mentioned in the draft. He said he regretted the “overly simplistic” characterization of officials. “It’s sort of unfair to pigeonhole them,” even in a discussion draft, he said.

The Kan. Corporation Commission (KCC) closed its generic docket relating to state universal service funding for incumbent telcos under rate-of-return regulation. The KCC opened the docket (Case 04-GIMT-1080-GIT) earlier this year after its staff recommended the agency study whether incumbents under rate-of-return should be allowed rate adjustments between general rate cases if their contribution to or draw from the state universal service fund changed as a result of a fund audit. The staff had proposed allowing up to a 3% increase or decrease in the intrastate revenue requirement between rate cases. But the telcos opposed the staff plan and said the KCC should continue its traditional policy of addressing universal service contributions during rate case hearings. The telcos said the staff’s plan might not be lawful under current statutes, and would create uncertainties regarding reasonableness of rates every time the state fund is audited. The KCC said situations in which a particular telco had a disproportionate fund contribution or fund draw could be dealt with on a case-by-case basis.

The Ill. Supreme Court ruled that the state universal fund can’t restrict high-cost support to a single line for each residence or business. The court affirmed lower court decisions that reversed an Ill. Commerce Commission to limit state support to the primary line serving customer premises. The court (Case 97172) said the ICC acted out of an incorrect belief that the FCC intended for federal universal service support to be limited to one line: “We do not find the federal government’s lists of services eligible for support to be so restrictive.” The court disregarded the ICC argument that the legislation establishing a state universal service fund left it to the agency to decide the number of lines to be supported. In another court case, the Ill. Court of Appeals said the ICC violated SBC’s due process rights in 1999 when it ordered SBC to invest $600 million annually in its network indefinitely. The ICC imposed the requirement as a condition for approving SBC’s acquisition of Ameritech. The court said that while the ICC could impose network investment requirements as a merger condition, it erred by not holding specific hearings to determine the appropriate spending amount. Since the merger, SBC has invested $3.7 billion in its Ill. network.

The Internet Innovation Alliance (IIA) officially kicked off Mon., as its leaders said “promoting VoIP services” and “educating people” were top goals of the new group. Unlike other VoIP organizations, such as the VON Coalition, the IIA will focus primarily on regulatory and economic rather than social policy VoIP issues, its leaders said.

WilTel petitioned the FCC to reduce or adjust its proposed 8.9% 4th-quarter Universal Service Fund (USF) contribution factor, used by carriers to compute their USF contributions. The factor, routinely set by the Wireline Bureau, will go into effect Sept. 30 unless the Commission steps in. WilTel challenged the “legitimacy” of issuing the factor without doing something to “eliminate discrimination” in the way the contributions are recovered. WilTel took exception to the fact that AT&T hasn’t been making contributions the USF for enhanced prepaid calling cards services while competitors continued to pay. WilTel said it thought the AT&T situation was just part of the problem and “the rest of a large ‘non- contributor iceberg’ lies just below the surface.” The 8.9% factor becomes discriminatory when it’s not being recovered equally from all competitors, the company said.

The Senate Commerce Committee approved legislation Wed. that would reform the “non-rural high cost” portion of the universal service fund, which goes to RBOCs and other large ILECs serving rural areas. The bill, S-1380, which would restructure the formula under which the fund is distributed, passed 13-9. Much of the non-rural fund goes to Miss. and W. Va. but that could change under the restructuring. Bill sponsor Sen. Smith (R-Ore.) said he would try to work with Sen. Lott (R-Miss.) to look for ways to help “specific states like Mississippi.” Lott opposed the bill, saying Miss. would go from receiving $133 million yearly to just $33 million. “It’s particularly punitive to my small rural state,” Lott said. The bill would calculate support based on wire centers, as opposed to calculating a state average, which critics said favored some states and prevented others from receiving any of the $277 million fund. The bill is known by many as the “Qwest bill,” since Qwest would be a major beneficiary of the formula change. Qwest on Wed. said it “applauded” the senators for passing the bill and that it would create investment in rural telecom infrastructure. BellSouth, which receives the funding in Miss., said comprehensive USF reform was needed, not a piecemeal approach. Sen. Dorgan (D-N.D.), an ardent supporter of USF reform, said he would reluctantly vote for the measure but added that comprehensive reform was needed during the next Congress. Rep. Terry (R-Neb.) has similar legislation in the House. “The momentum created by the Senate Commerce Committee will hopefully carry over to the House so we too can see some meaningful movement on this issue. We need to ensure that this money is allocated to the rural areas this fund was designed to help,” Terry said Wed.

The federal E-rate program should be revamped so more of the funding comes from local taxes, House Commerce Committee Chmn. Barton (R-Tex.) said Wed. at the 3rd investigative hearing into the program held by the committee’s Oversight & Investigations Subcommittee (CD July 23 p7). Barton said requiring local govts. to provide more of the money for E-rate projects to provide Internet connections for schools and libraries might mean better accountability. “This program needs wholesale restructuring,” he said.

The Senate Commerce Committee will tackle several issues this week, including the Wireless 411 Privacy Act (S-1963), introduced by Sen. Specter (R-Pa.), which would set restrictions on wireless carriers implementing a wireless telephone directory. Tues, at 2:30 in room 253 Russell Building, the Committee plans a hearing on the bill. The session will feature: Dennis Strigl, Verizon Wireless CEO; Steve Largent, CTIA pres.; Patrick Cox, Qsent CEO; Marc Rotenberg, Electronic Privacy Information Center (EPIC) exec. dir. On Wed., the Committee will mark up S-1963. The Committee will also consider S-1380, from Sen. Smith (R-Ore.), which would redirect portions of the universal service fund’s (USF) “nonrural” fund that goes to RBOCs and large ILECs that serve rural areas. The mark up is 9:30 a.m. in room 253 Russell Bldg.

State commissions in Mich. and Cal. are scheduled to vote this week on SBC requests to nearly double unbundled network element (UNE) rates. But competitor and consumer interests in both states told regulators Fri. that UNE increases will stifle local competition and eventually lead to higher phone bills for consumers.

Many industry and Hill sources said an amendment to the Senate Commerce Justice State (CJS) appropriations bill that would prevent the FCC from adopting a primary line restriction on the Universal Service Fund (USF) (CD Sept 16 p1) is still a long shot. But while they acknowledged Thurs. the bill still had a long road to travel, it was certainly possible it could pass.