School administrators and others involved with the e- rate Internet funding program told the FCC at a forum Thurs. that it could greatly reduce misuse of program funding by: (1) Simplifying the rules. (2) Educating applicants. (3) Publicizing instances of wrongdoing. The forum, chaired by FCC Comr. Abernathy and attended by all of the commissioners except Martin, is part of the agency’s effort to reduce fraud, waste and abuse in the multibillion-dollar program through possible rule changes. The e-rate provides discounts to schools and libraries for wiring and other Internet access projects.

The Fla. legislature passed a bill (SB-2178) to create a new Digital Divide Trust Fund within the Fla. Office of Technology. The bill sent to Gov. Jeb Bush (R) says money from the fund will be used to support deployment of advanced telecom services statewide. The fund will get its money from appropriations, gifts, other donations and matching contributions from public- and private-sector entities and would terminate in mid-2007. The legislature also killed 3 other telecom bills: (1) HB-415/SB-1250, which would have required porn filters on all public Internet computers in libraries. (2) HB-995, which would have extended the sunset date of the universal service provisions in the state’s telecom statutes. They currently are to sunset July 1, 2004, and the bill would have extended that date by 2 years. The bill died because another telecom reform bill (SB-654), passed by the legislature last week, imposes universal service obligations on telcos through 2009. (3) HB-1211 and SB-438, that would have banned deceptive spam, given ISPs power to stop spam and set civil penalties.

Senate Communications Subcommittee Chmn. Burns (R-Mont.) said Tues. that Congress would further examine the Universal Service Fund (USF) through a “summit.” He said officials of the FCC, the Federal-State Joint Board on USF, industry and members of Congress would meet in an effort to find solutions to problems encroaching on USF. The event hasn’t yet been scheduled. Burns first proposed the idea of a summit at an April Senate Communications Subcommittee hearing (CD April 3 p1).

Cable operators’ assertion that prices are rising because of programming costs was challenged by some senators in a Commerce Committee hearing Tues. on cable rates and media ownership. In particular, Senate Appropriations Chmn. Stevens (R-Alaska) had tough questions for cable operators and said he doubted that programming costs were driving up cable rates. Senate Commerce Committee Chmn. McCain (R- Ariz.) asked why a la carte pricing or tiering of cable channels wasn’t a common option for consumers.

Rural ILECs and their competitors agreed in comments filed Mon. at the FCC that the advent of competition in rural areas was placing a strain on the universal service program but they offered widely divergent ways of fixing the problem. The comments responded to a variety of questions and recommendations by the FCC and the Federal State-Joint Board on Universal Service, generally about the process for designating competitors as eligible telecommunications carriers (ETCs) and the concept of portability.

CTIA, NAB and PCIA planned to file an intervenor brief late Wed., siding with the FCC and asking that the U.S. Appeals Court, D.C., deny a challenge by environmental groups to the Commission’s environmental requirements for towers. Earlier this year, the American Bird Conservancy, Forest Conservation Council and Friends of the Earth asked the court to direct the FCC to prevent the building of new towers until it completed a program-wide environmental impact statement on its tower licensing decisions in the Gulf Coast area. The groups also sought a halt in new tower approvals until the Commission implemented requirements for bird protection measures and initiated certain public participation procedures. The groups cited alleged FCC violations of the National Environmental Policy Act (NEPA), the Migratory Bird Treaty Act (MBTA) and the Endangered Species Act (ESA). They charged that towers killed 4-5 million birds annually. CTIA Gen. Counsel Michael Altschul said: “While we dispute the scientific basis for these figures, they mean nothing without some context. A recent University of Wisconsin study found that domestic cats kill between 7.8 and 219 million birds annually just in rural Wisconsin.” The Forest Conservation Council and other groups had petitioned the FCC earlier this year to require environmental assessments under NEPA for 5,797 antenna structures on the Gulf Coast that they said were harming migratory birds. The broadcast, public safety and wireless towers challenged by the groups cover a coastal region that spans 6 states. The NAB, PCIA and CTIA intervenor brief wasn’t available at press time. But CTIA said its filing noted “tower siting decisions are the result of purely private actions, with no federal funding, and minimal oversight, control or participation by the FCC.” CTIA said that when a tower was sited, there was no federal action that fell under the purview of the ESA, which controlled an “agency action;” the MBTA, which oversaw the conduct of hunters or poachers; or NEPA, which regulated a “major federal action.” CTIA said that when a tower was sited, there was no federal action for those statutes to regulate. It also said those laws don’t apply to tower builders, “as they are neither government agencies nor hunters.” The FCC, in a response brief filed late Wed., said because the Commission hadn’t “unreasonably delayed” acting on the 2 migratory bird matters that the groups said were still pending, they aren’t entitled to the extraordinary relief of mandamus to compel agency action. The FCC asked that the court turn down the petition for mandamus. The D.C. Circuit directed the FCC March 31 to respond to the mandamus petition and discuss the factors in a 1984 ruling, Telecommunications Research & Action Center v. FCC, for determining whether an agency’s action had been delayed unreasonably. The Commission told the court that the groups had participated in meetings held by the Fish & Wildlife Service Communications Tower Working Group, which was formed to develop research on the impact that towers might have on birds. They have participated in other proceedings pending before the FCC, the Commission said. In the matters cited in the court challenge, however, the FCC hasn’t acted, or failed to act, in a way that would warrant mandamus, the agency said. In the case of the Gulf Coast petition, which was filed in Aug. 2002, and a Jan. 2002 order by the Wireless Bureau, neither has “been pending for as long as even 18 months,” the FCC said. “That does not constitute an unreasonable delay, especially when, as here, the agency faces no statutory deadline.” The FCC also said the extent of the claimed injury to migratory birds raised in the petition was “speculative and the FCC has more substantial and pressing priorities that require immediate attention.”

The Federal-State Joint Board on Universal Service is likely to consider the FCC’s ability to assess contributions based on intrastate revenue in addition to the interstate, Matthew Brill, senior legal adviser to FCC Comr. Abernathy said at a “Webinar” sponsored by the USTA Wed. “This limited authority of the FCC is one of the reasons why the contribution rate based on interstate revenue is that high” (1.9%.) He said if the contributions were assessed based on total carrier revenue, the rate would be 2.7%, and “obviously, it would spread the burden out and put less hardship on consumers.”

The summer months will feature several hearings on telecom issues, House Commerce Committee Chmn. Tauzin (R-La.) told reporters Wed. following the markup of spectrum legislation (see separate story, this issue.). He said the committee would have to focus on Medicare and other issues in May, but would use June and July to focus on telecom issues, including the DTV transition, E-911, the Universal Service Fund (USF), E-rate and broadband deployment. Tauzin said his committee should be able to tackle several telecom issues in a 7-week span during those months. House Telecom Subcommittee Chmn. Upton (R-Mich.) said he would hold a hearing this spring on spectrum usage and its relation to public safety.

DTS generated $4.4 million net profit last year on revenue of $40.96 million, 78% of which came from technology and film licensing royalties, according to IPO prospectus filed with SEC. But Steven Spielberg’s ownership stake in DTS, long presumed to be significant but always cloaked in official secrecy, remained undisclosed in massive filing, except for obscure references.

The House Commerce Committee issued a subpoena to the Universal Service Administrative Co. (USAC) to obtain nonredacted copies of documents the committee had requested in March. USAC administers the Universal Service Fund (USF) for the FCC, including the E-rate program, which Committee Chmn. Tauzin (R-La.) suspects is riddled with fraud (CD March 14 p6). Committee spokesman Ken Johnson described the subpoena as “friendly” and said USAC had been “fully cooperative” with the committee’s investigation. The committee is seeking information on companies and individuals for potential e-rate fraud, which could include IBM.