FCC Chmn. Powell gave early indications of his thinking about a regulatory regime for Voice-over-Internet Protocol (VoIP) Mon., saying he saw consensus that the service might be deemed “interstate” in nature and that concerns about VoIP were focused on 4 or 5 discrete issues. His comments to reporters came after an FCC forum on VoIP that featured industry leaders, state public utility commissioners and others.

Legislation to modify the universal service fund (USF) received Native American endorsements. The National Indian Telecom Institute (NITI) and the National Congress of American Indians (NCAI), expressed support for S-1380 in separate letters to Senate Commerce Committee Chmn. McCain (R-Ariz.). S-1380, introduced by Sen. Smith (R-Ore.), would adjust distribution of USF payments to Bells and other large ILECs for rural services. The pot of about $230 million, called the “non-rural” fund because it goes to bigger carriers, is calculated statewide and goes mostly to Ala., Miss. and W. Va. “The FCC’s statewide averaging approach excludes more than 40 states and most tribal lands from eligibility for high-cost support,” NITI said. S-1380, and its House counterpart (HR-1582) from Rep. Terry (R-Neb.), would calculate based on the wire center. “This represents a more equitable approach given that one wire center typically covers a more homogeneous service area and reflects service costs more accurately,” the NITI letter said. NCAI said the legislation was needed, as many Native American communities don’t even have basic telecom services. “In recent years, numerous experts have reported that Native Americans face an urgent situation in which their telecommunications infrastructure is falling far behind the rest of the Unites States,” NCAI said. The bill has 22 co-sponsors, including McCain, but hasn’t been scheduled for hearing or markup. While urging its passage, NITI said it had concerns: (1) A cap on funding to any one state could result in “truly needy wire centers” from receiving funding. (2) The value of phone exchanges could rise as a result of USF funding changes, making it more difficult for tribes to purchase the exchanges in their areas. “This possible side effect does not outweigh the arguments in favor of the bill, as most tribes will be better served by greater service investments by incumbents than by attempting to take over service themselves,” the NITI letter said. “However, for tribes that have determined that purchase of the local exchange is the only way to ensure adequate service to its people, this effect must be considered.”

Rep. Terry (R-Neb.) endorsed FCC rules to improve a universal service fund (USF) program for rural health care providers (CD Nov 14 p7). The program provides discounted telecom services at rates equal to those in urban areas. “This will go a long way to provide quality health care to those who may not have direct access to it,” said Terry, who has introduced legislation (HR-1582) that would reform USF to allow more large ILECs to receive USF funding in Western states.

The FCC adopted new rules to improve the universal service program for rural health care providers and increase participation in it, at its meeting Thurs. The order follows FCC Chmn. Powell’s visit to the U. of Va. Office of Telemedicine (CD Nov 10 p3), where he pushed for greater participation in the program to ensure that “the quality of health care available to Americans is not dependent upon their geographic location.” He expressed concern that while the Commission set aside $400 million annually, in the first 5 years of the 6-year-old program barely $30 million was disbursed to rural facilities. In 2000 and 2001, demand for the program averaged $14 million per year -- only 3.5% of available discounts.

The emergence of Voice-over-IP (VoIP) services may force regulators to find new ways to handle social obligations such as universal service, E911 and CALEA, experts said in an audio conference Thurs. sponsored by Warren Communications News. Rather than limiting debate to 2 alternatives -- subjecting VoIP providers to traditional telephony regulations vs. seeing social programs such as those decline because funding was required in those regulations -- there’s a 3rd alternative: Looking for new ways to fund such programs, panelists said.

Telecom manufacturers have interests in seeing some telecom regulations changed, but aren’t likely to fully support USTA’s efforts to make wholesale changes to telecom regulation (CD Nov 3 p1), TIA Pres. Matthew Flanigan said. While there are some areas where TIA will continue to work with ILECs, the specific proposals advanced in an Oct. 20 meeting were too ILEC-oriented to get the support of manufacturers, he said. “We'd be happy to stand arm-in-arm if all carriers are arm-in-arm,” said Flanigan, who said CLECs, cable, wireless and long distance providers are also important customers to TIA members. “But that’s not the case here. This is an ILEC-directed attack.”

CHARLOTTESVILLE, Va. -- FCC Chmn. Powell Fri. pushed for greater participation in the Commission’s universal service rural health care program to ensure that “the quality of health care available to Americans is not dependent upon their geographic location.” In a visit to the U. of Va. Office of Telemedicine (UVT), he said the Commission was expected to vote on at its agenda meeting Nov. 13 on an order designed to attract more applicants for the available funds by “unlock[ing] the potential” of the program: “The item… will encourage the development of public [and] private partnerships and other creative solutions to meet the needs of rural communities and increase participation in the rural health care program.”

Sen. Smith (R-Ore.) wrote to FCC Chmn. Powell to clarify comments he made in an Oct. 30 Senate Commerce Committee hearing on the universal service fund (USF). In the hearing, Smith asked Powell several questions about his USF bill (S- 1380) that would redirect some of the high-cost, nonrural fund, which mainly goes to Bells and large ILECs that serve rural areas (CD Oct 31 p1). That bill, along with a similar one in the House by Rep. Terry (R-Neb.), are commonly known as the “Qwest bills” since more of the funding would go to that carrier’s 14 Western states. Smith had said he believed the program was “unfair” since most funding went to 3 states, Miss., Ala., and W.Va. But Powell raised several doubts about the need for the legislation and pointed out that it was only a small part of the total USF fund ($234 million of an approximate $3 billion fund.) In the letter, Smith said that fund, while small, actually would serve at least 70% of all rural customers. “In most states, these customers -- the majority of rural Americans -- see no benefit from this program,” Smith said. In response to Powell’s comments that many carriers sold rural exchanges, Smith said the bill would focus exclusively on high-cost wire centers. “If a carrier sold its high-cost exchanges, it would not be eligible for funding for those exchanges,” he said. “This approach is simple and fair. The FCC’s current methodology is neither.” Smith also said the bill did include a cap on the overall size of the fund, a provision that Powell said would have to be in the bill or it would create very large increases in the fund.

BOSTON -- The handwriting has been on the wall: “We can now say the U.S. ILECs are in mortal peril,” conference co- chmn. John McQuillan said in closing comments at the Next Generation Networks (NGN) show here Fri. ILECs have built an ultra reliable public switched telephone network (PSTN), which does only one thing -- carry voice, he said.

Sens. Rockefeller (D-W. Va.) and Snowe (R-Me.) disputed statements about the E-Rate program in a Senate Commerce Committee hearing Thurs. on the universal service fund (CD Oct 31 p1). The senators, who are members of the Committee but didn’t attend the hearing, said the E-Rate had not run its course and said support for the program that funded Internet and IT services for schools and libraries should continue. Senate Appropriations Chmn. Stevens (R-Alaska) and Senate Communications Subcommittee Chmn. Burns (R-Mont.) questioned FCC Chmn. Powell on whether the E-Rate was close to having served its purpose since 92% of classrooms and 65% of libraries now had Internet connections and whether it still was appropriate to fund the E-Rate through a fee on telecom services. “The increasing demands on the high-cost component of the fund coupled with a declining base of support are threatening the future of the Universal Service Fund, not the E-Rate program,” the senators said, noting that E-Rate was capped at $2.25 billion. They also said the E- Rate would be needed in the future for schools and libraries: “Schools and libraries continually need to be in the forefront, not left behind. E-Rate funding will be just as crucial to schools and libraries in the future as it is now. We have made great strides in connecting classrooms and libraries. But the connections of today will not be adequate for the students of 2010, and we will need to retain E-Rate support for services and connections or our schools will be left out in the future.”