Industry sources said the Wed. summit on the Universal Service Fund could lead Senate Communications Subcommittee Chmn. Burns (R-Mont.) to introduce USF legislation shortly. Burns and Sen. Dorgan (D-N.D.) will host the summit of “stakeholders” in the USF debate. The meeting is scheduled to examine contribution methods, with Mont. PSC Chmn. Bob Rowe as moderator. It also will include analysis of what contribution methods are most feasible to adopt and which are the most troublesome. Sources said depending on the tone of the summit, Burns could file USF legislation this week. A source said he was likely to want USF legislation in the public record before a potential USF hearing later this month. One industry source said a USF bill was likely to be limited in scope and would deal with contribution methods. A source said Burns might push for including intrastate calls in addition to interstate calls as a contribution source. Another source said Sen. Stevens (R-Alaska) would push for including facility-based broadband, such as cable modem, as a USF contributors. The meeting isn’t open to the public, but is scheduled for this morning in Rm. 192, Dirksen Bldg.

The Kan. Corporation Commission (KCC) ruled that paging companies must begin contributing to the state universal service fund. They previously had been exempt. The KCC in a docket opened in May (Case 03-GIMT-932-GIT) addressed universal service concerns raised by its staff and the Citizens Utility Board. The KCC also ruled that, starting Nov. 1, all carriers must report their retail revenues from the intrastate portion of fixed-rate calling plans, with the intrastate usage allocation determined on the basis of annual studies. The KCC deferred to a future docket a Verizon Wireless suggestion that Internet-based telecom providers also should pay universal service assessments. In another matter, the KCC granted an SBC motion to require that CLECs must provide the commission and SBC certain specific information about their own win-back and customer retention programs. SBC made that motion in the KCC investigation into SBC’s win-back efforts. SBC said that while the programs of CLECs were not at issue in the docket, it said the data from the CLECs would support its contention that its practices and promotions were a fair response to competitors’ win-back practices. Hearings in that docket (Case 02-GIMT-678-GIT) are to begin Nov. 3.

State regulators face tough choices in deciding regulatory treatment for Voice-over-IP (VoIP) providers and can’t necessarily forgo action on the ground that VoIP is a nascent technology, NARUC Gen. Counsel Brad Ramsay said on a Cato Institute panel on regulating Internet telephony Tues. The basic question remains whether a VoIP provider such as Vonage is a telecom service, he said. If a state PUC decides Vonage isn’t providing telecom service, “it can’t then go back when the service reaches a 50% market share, if it ever does, and say we made a mistake, we should regulate,” Ramsay said. A regulator can’t “knock himself out of the game” like that, he said. Whether VoIP providers like it or not, if they are providing telephony service they have obligations under the law to provide such things as 911 capability, universal service funding, network reliability and access to law enforcement agencies, Ramsay said. A decision last month by the Minn. PUC subjecting Vonage to wireline regulation (CD Sept 9 p5) was “the tip of the iceberg” on the issue of state regulation, said Scott Marcus, the FCC’s senior adviser for Internet technology, also a panelist at the forum. “It would be nice if someone at the FCC spoke up and preempted the states,” said Internet consultant Jeff Pulver, also a panelist. Regulators should reform “outdated carrier compensation and universal service regulations” before applying them to VoIP, AT&T Internet & E-Commerce Dir. Marilyn Cade said. “Regulators need to be aware that if they do something to Voice-over-IP they might impede the development of other applications,” she said. Verizon Internet specialist Link Hoewing said the problem was that when regulators in Minn. looked at Vonage it looked like a telephony service, “with dial tone, all the features of a regular phone service.” Marcus noted, however, that applying tariff and certification requirements on Vonage, which would require it to incur the cost of retaining lawyers for a very small customer base in Minn., “might result in Vonage withdrawing from the state.” Hoewing said he didn’t advocate economic price regulation of VoIP providers but as the technology matures, states should address those issues. He said an AT&T petition asking the FCC to free its phone-to- phone IP services from the access charges regime was different: “AT&T’s petition is an end run around access charges.” Ramsay said he agreed: “There is no reason not to call what AT&T is doing telecommunications.”

To receive universal service support funding in certain high-cost areas served by ILECs, Sprint has filed separate applications at the FCC in the last week for designation as an eligible telecom carrier (ETC) in N.Y., Tenn. and Va. In the Tenn. filing Wed., Sprint said it was applying for ETC designation in parts of its licensed service area in the state served by BellSouth “for purposes of receiving federal universal service support.” It said it would use universal service support funding only to support the provision, upgrading and maintenance of its digital wireless network in Tenn., enabling it to speed the rollout of advanced wireless facilities that supported both basic wireless services and higher bandwidth. Sprint said it also would offer a reduced rate universal service package to subscribers eligible for Lifeline support. Sprint said its service offerings competed with those of BellSouth. It said the Tenn. Regulatory Authority had declared it didn’t have jurisdiction over ETC applications by CMRS carriers, dismissing a filing by Advantage Cellular Systems in April. In N.Y., Sprint said it was petitioning for ETC designation in the parts of its licensed service area served by Verizon and Frontier. In the case of Tenn., Sprint proposed ETC designation for a service area consisting of each of the BellSouth wire centers in the state in which PCS service was available over the Sprint network. “To the extent Sprint serves only a portion of the wire center, Sprint requests ETC designation only in that portion of the wire center where it provides service,” it said. In N.Y., Sprint proposed a service area covering each of the nonrural ILEC wire centers in which it offered PCS service over its network. In each case, Sprint told the FCC that granting its ETC request would serve the public interest by promoting additional deployment of wireless services to high-cost areas served by nonrural ILECs and ushering in additional competitive universal service offerings. Verizon last month told the Federal-State Joint Board on Universal Service the FCC shouldn’t act on pending ETC petitions until it addressed the growth in those applications and the resulting threat to the CALLS plan in nonrural areas.

As Congress returns from its Aug. recess, it brings with it the question whether the focus on media ownership has lost any momentum. Controversy over the FCC’s rules was mounting, and the Senate when it left a month ago was prepared to vote to overturn all of the FCC’s new ownership rules. The Senate Appropriations Committee is likely to act on the 35% broadcast ownership cap by including it in its Commerce Justice State (CJS) spending measure. Such a rider would accompany a similar measure that passed the House.

NTCA premiered its documentary on rural telecom issues Wed. to several dozen congressional staffers and industry representatives on Capitol Hill. The movie, Connecting Rural America: Community-Based Telecom Providers Answer the Call, gave a brief history of rural telephony and lightly delved into several rural telecom issues. The 30-minute film, produced by NTCA’s Foundation for Rural Service, highlighted cases in which local telecom providers had met the needs of their rural customer base. The film recounted the work of Venture Communications Cooperative, in Highmore, S.D., which provided communications for Vice President Cheney at his “undisclosed location.” Venture employees said they were able to install 25 phone lines, several ISDN video lines and other telecom equipment at a S.D. hunting lodge where Cheney stayed in the immediate aftermath of the Sept. 11 attacks. The company said the network was installed “in a matter of days.” Also highlighted was the work of the Penasco Valley Telecom cooperative in southern N.M., which used unlicensed spectrum to provide broadband service to a rural cattle farm. The service was used primarily to home school a teenager unable to travel to the nearest school an hour away. The film ended by saying that the FCC and Congress must protect the universal service fund if rural service was to continue.

The Iowa Utilities Board (IUB) opened a proceeding to consider rules for wireless universal service carriers involving service area and service quality. The new docket (Case RMU-03013) applies to any wireless carrier that is or wants to be an eligible telecom carrier (ETC) for federal universal service funding. The IUB proposed a rule that would define a wireless carrier’s universal service area as the area licensed by the FCC, regardless of landline exchange boundaries. The IUB also proposed applying its basic service quality rules to wireless services supported by universal service funds. Hearings are to begin Dec. 10.

The Ore. PUC ruled that extended area service (EAS) wasn’t entitled to support from the state universal service fund. The agency was ruling on a petition by rural Monroe Telephone (Case AR 467) seeking inclusion of EAS in the definition of basic services comprising the universal service entitlement. The change would have given Monroe more support from the fund. Monroe argued that excluding extended local calling from universal service subsidies would discriminate against rural customers by making them pay higher rates than urban customers for comparable service. But the PUC said its previous reviews of the universal service entitlement had concluded that EAS was an interexchange service, not local, and the entitlement extended only to supporting access to interexchange service but not to subsidizing the actual service itself. The PUC also said it didn’t want to be making piecemeal revisions in the universal service entitlement but preferred to address the issue in a comprehensive review of all the services comprising the entitlement. The PUC staff had said it intended to seek such a review by 2005. Meanwhile, the PUC approved updated access charge rates proposed by the Ore. Exchange Carrier Assn., that would increase common line, switching and transport rate elements by an average of 35%.

NTCA said it hosted 5 FCC and congressional staffers for a tour of rural telecom providers in Ore. The 2-day tour began Aug. 17 and was part of NTCA’s Foundation for Rural Services (FRS). The tour included: (1) A visit to Helix Telephone Co., which uses solar and wind-powered devices to provide service in areas where traditional power sources aren’t available. Helix’s service includes DSL. (2) A meeting with several telecom managers on rural telecom issues. (3) A tour of the Pioneer Telephone Coop in Philomath, which serves both mountainous and coastal regions. “This visit comes at a critical time as the FCC prepares to rule on several key issues for rural telcos, most importantly [universal service fund] portability,” said FRS Pres. Bruce Bohnsack. The participants included: Scott Bergman, aide to FCC Comr. Adelstein; Peter Filon, minority counsel-House Commerce Committee; Diane Hsu, deputy chief-FCC Telecom Access Policy Div.; Melissa Shannon, policy adviser to House Minority Leader Pelosi (D-Cal.); David Sohn, commerce counsel for Sen. Wyden (D-Ore.).

The House Energy & Commerce Committee said last week’s electricity blackouts wouldn’t affect its telecom agenda once Congress returned in Sept. The Committee already has announced one hearing to examine the cause of the blackouts and some industry officials worried that the issue could monopolize legislator and committee time and divert them from telecom and Internet issues.