EchoStar and SBC Communications announced an agreement Mon. to bundle the former’s Dish Network with SBC’s voice and data services. The new service, SBC Dish Network, will be available in early 2004, the companies said. SBC also said it would help with funding for the co-branded product. Although both companies will benefit from the deal, analysts agreed that the agreement is more significant for SBC. EchoStar CEO Charles Ergen said the deal was the culmination of a partnership that began a year ago with bundling experiments involving certain video and telephone services: “It boils down to a smart business deal for both companies… [and] will focus on the business of offering products across the board.”

SBC and several other Ark. incumbent telcos asked the Ark. PSC to permit revisions in the Rural Saver Optional Calling Plan they are required to offer to customers in rural exchanges under the state’s universal service program. The carriers (Case 03-082-U) said the plan hadn’t been popular with customers, defeating the PSC’s whole purpose in requiring that it be offered. The telcos said the PSC needed to double the monthly intraLATA toll call allowance to 2 hours monthly from one hour while keeping the fee at $2.50 monthly, and expand availability of the plan to include exchanges with 3,000 access lines. It now is limited to those with 2,600 lines. The carriers also wanted the PSC to expand usage data reports for the program and to allow the companies to recover the additional costs of the proposed revisions from the Ark. Calling Plan Fund that supports this subsidized toll offering.

EchoStar and SBC Communications announced an agreement Mon. that would bundle former’s Dish Network with SBC’s voice and data services. New service, SBC Dish Network, will be available in early 2004, companies said. SBC also said it would help with funding for co-branded product. Although both companies will benefit from deal, analysts said that agreement is more significant for SBC. EchoStar CEO Charles Ergen said deal is culmination of a partnership that began a year ago with bundling experiments involving certain video and telephone services: “It boils down to a smart business deal for both companies… [and] will focus on the business of offering products across the board.”

Rural ILECs, not their competitors, are causing the increase in the universal service fund, representatives of Western Wireless told the FCC Office of Strategic Planning & Policy Analysis in an ex parte meeting July 16. According to the ex parte notice, Western Wireless Federal Govt. Affairs Dir. Mark Rubin and outside attorney Michele Farquhar told FCC staffers that competitive ETCs [eligible telecommunications carriers] such as Western Wireless weren’t causing the growth problem: “Excessive funding to rate-of- return ILECs is the problem… It is a painful problem that the FCC has postponed dealing with… but can postpone no longer.” Public data show “a $1.36 billion growth in projected annual high-cost universal service funds to ILECs over the past 7 calendar quarters, as opposed to a $121 million increase in projected annual high-cost funds to competitive ETCs,” Western Wireless said: “The primary drivers of the growth” are “the FCC’s RTF [Rural Task Force] and MAG [Multi-Assn. Group] decisions, both designed to enable rural ILECs to recover their revenue requirements established under the rate-of-return form of regulation.” Western Wireless suggested forming a Competitive Universal Service Task Force to help the Federal-State Joint Board on Universal Service analyze the issues and “work toward building consensus.”

The most important part of the FCC decision issued Mon. on what services are eligible for universal service support (CD July 15 p1) is what the Commission chose not to do, observers said, as did the Commissioners themselves in separate statements issued as part of the order. The FCC voted to defer action on whether “equal access” should be on the list of eligible services. Placing it on the list would have required competitors, such as those that provide wireless service in rural areas, to offer equal access service before they could be eligible for universal service, a move they opposed but rural ILECs supported.

New telecom laws were signed in Conn. and Ill. and a bill was vetoed in Hawaii. Conn. Gov. John Rowland (R) signed 2 telecom tower bills. The first (SB-1098) allows municipalities to assess and tax telecom towers taller than 20’ as real estate. Rowland also signed HB-6428 allowing telecom towers to be erected in agricultural zones as long as they don’t materially decrease arable acreage or farm productivity. Ill. Gov. Rod Blagojevich signed HB-873 that exempts wireless carriers from having to file monthly reports of earnings and expenses. He also signed HB-16 to require telecom and energy utilities and cable companies to disclose location information about subscribers being sought by the state for child support enforcement. Hawaii Gov. Linda Lingle (R) vetoed a bill (SB-1547) that would have appropriated $43,000 from the state universal service fund for a pilot project to provide blind people with toll-free telephone access to content of newspapers, magazines and other time-sensitive information.

The FCC adopted the recommendation of the Federal-State Joint Board on Universal Service to retain the existing list of services supported by federal universal service funds. In an order issued late Mon., the agency made no decision on whether equal access should be added to the list of services. The Joint Board also was unable to reach agreement on the issue, which is very important to rural ILECs. “We agree with the Joint Board that, with the possible exception of equal access,” no new service satisfies the statutory criteria… or should be added to the list of core services,” the FCC said.

The universal service bill (S-1380) by Sen. Smith (R- Ore.) picked up an influential co-sponsor Thurs. evening when Senate Commerce Committee Chmn. McCain (R-Ariz.) signed on. His support increases the bill’s co-sponsors to 11, with Committee members Allen (R-Va.) and Fitzgerald (R-Ill.) also supporting the measure that would change the formula used to distribute universal service funding (USF). It would distribute a $254 million portion of USF funding to RBOCs in more states, including many in Qwest territory (CD July 10 p6), and is similar to HR-1582 by Rep. Terry (R-Neb.). Qwest serves Ariz.

Sen. Smith (R-Ore.) introduced a universal service fund (USF) reform bill similar to one by Rep. Terry (R-Neb.) (HR- 1582). Sources said that Smith’s USF bill, while similar, wasn’t identical to Terry’s, which is designed to spread more evenly USF funding for RBOCs and midsized carriers that serve rural areas (CD April 4 p1). The formula used to distribute the $254 million spreads money to just 7 states, critics said, with more than half going to Miss. A spokesman for Terry said the formula took statewide averages, so states with both urban and rural areas often couldn’t receive USF funding for rural areas. The bill is pushed by Qwest and opposed by both USTA and BellSouth. “Senator Smith’s bill does not address the overarching challenges threatening universal telephone service,” USTA Pres. Walter McCormick said: “This approach picks winners and losers and pits state against state. What is needed is a unifying approach.” BellSouth said the bill didn’t address the crucial question of USF reform: “Where does the money come from? It is the funding side of the universal service equation that is in peril; the distribution side should not be addressed separately.”

Top FCC officials said Wed. at the Wireless Communications Assn. (WCA) show in Washington that they expected decisions by early next year on a series of interlocking spectrum issues, including efforts to solve public safety interference at 800 MHz. The outcome of the 800 MHz proceeding has implications for replacement spectrum that Multipoint Distribution Service (MDS) operators seek in the planned reallocation of some MDS spectrum for advanced wireless services.