Senior telecom officials at Inter-American Telecom Commission (CITEL) assembly meeting in Washington Mon. stressed extent to which investments in advanced networks before current economic downturn haven’t adequately filled in gaps in digital divide in Latin American countries. While opening of telecom markets in individual countries in region has led to greater competition for business customers, in many cases that hasn’t translated down to poorest consumer groups, said Luis di Benedetto, pres. of Hispanoamerican Assn. of Research Centers & Telecom Companies (AHCIET). To expand universal service among such customer groups, stepped- up regulation will be needed, he said: “Market action as a driver is not enough to close the gap.” One key focus of week-long CITEL assembly meeting is fine-tuning of draft action plan for “Connectivity in the Americas” that would lay out regional blueprint for how countries could expand telecom and Internet services cooperatively. First day’s discussion turned, in part, to how more ubiquitous access to information technology should take into account wider availability of locally developed content and access for poor and rural areas that often still are bypassed by telephone connections. Several panelists pointed to increased challenges in those areas in current market downturns.

FCC denied petition by 2 groups of local telcos that sought additional regulation of Western Wireless service in Kan. State Independent Alliance and Independent Telecom Group asked FCC in Nov. 2000 for declaratory ruling that Western Wireless’ Basic Universal Service (BUS) wasn’t commercial mobile radio service (CMRS). Such ruling would have meant Kan. Corp. Commission (KCC) wasn’t precluded by federal law from applying wireline LEC regulations to BUS. FCC, with Comr. Martin dissenting, concluded BUS was CMRS offering, so KCC couldn’t regulate BUS entry or rates and couldn’t require it to provide equal access for telephone toll services. Mark Rubin, Western Wireless federal govt. affairs dir., said company was “grateful that the FCC saw the petition for what it was -- a bold end-around the Communications Act’s prohibition against state or local governments’ regulating the entry of or the rates charged by a CMRS provider.” Issue is part of continual debate in states over how to classify Western Wireless’ wireless local loop service. Martin said he found it “difficult to believe this… offering, which is designed specifically to qualify for universal service subsidies, should be deemed exempt from regulations and universal service fund requirements applicable to wireline local exchange carriers providing essentially the same service.”

Speakers at NARUC panel on telecom bankruptcy warned state regulators to make sure bankruptcy judges understood state interest in any bankruptcy case involving regulated carrier and to make advance contingency plans for handling carrier bankruptcy’s possible impact on customers. Ore. Asst. Attorney Gen. Dan Rosenhouse said that even when carrier entered bankruptcy, state regulators still had right and obligation to protect public interest. He said judges tended to be sympathetic to regulators and commissions should provide bankruptcy judge with brief on state laws and regulations that governed company. But Rosenhouse cautioned that if states involved themselves as party in carrier’s federal bankruptcy proceeding, they could lose their 11th Amendment sovereign immunity. He said that as long as carrier was in Chapter 11 reorganization, it would have interest in keeping business operational. But if reorganization failed and carrier’s assets were sold off in bankruptcy liquidation, he said states needed to have policies and processes in place for reassigning customers to other providers if their service was terminated. Bob Burns, NRRI senior legal research analyst, said states needed to move quickly to make their interests known, explain regulatory scheme and statutory obligations governing carrier and commission’s “comfort zone” involving increases in revenue requirements that might be needed in carrier reorganization. He said states should make clear their intent to hold carrier to its regulatory obligations. Both speakers warned that filing of bankruptcy meant any past debts, such as past-due universal service fund assessments or past-due penalties, might not be paid but bankrupt carrier was legally responsible for any future assessments or penalties. Burns suggested states characterize universal service assessments as tax in order to get higher priority on list of debt claims for payment. He said status of state enforcement proceedings in progress at time of bankruptcy filing was tricky and there was no assurance bankruptcy judge would approve payment of any penalties subsequently assessed. He advised state commissions to close any service quality or other enforcement proceedings that were open when company filed for bankruptcy and start new cases.

PORTLAND, Ore. -- Three FCC commissioners at NARUC panel on competitive policy issues here said federal-state cooperation would be important element in development of sound and effective regulatory approaches to telecom competition. NARUC Telecom Committee devoted entire afternoon session Mon. to panel.

Continuity of service and future of telecom industry will be examined in Senate Commerce Committee hearing today on financial turmoil in telecom market. Committee Chmn. Hollings (D-S.C.) will preside over hearing featuring testimony from FCC Chmn. Powell, who will address continuity of service before discussing future of telecom industry in general, FCC spokesman told us. WorldCom CEO John Sidgmore, Global Crossing CEO John Legre and Qwest Pres. Afshin Mohebbi also will testify.

Draft of Rep. Terry (R-Neb.) bill to create Rural Issues Advisory Board in FCC circulated Thurs., although Hill and industry sources said legislation wasn’t likely to be introduced until after Aug. recess. Both Terry and Sen. Harkin (D-Ia.) have proposed legislation to create rural advocacy within FCC. OPASTCO said it liked parts of proposal, although its board hadn’t officially considered measure. OPASTCO Legislative Dir. Don Erickson said Terry’s proposal was “commonsense” approach to problem perceived by rural interests that FCC didn’t take cost-benefit analysis into account when considering rules that affected rural carriers. Erickson said Commission wasn’t following Regulatory Flexibility Act, which requires agency to take cost-benefit into account when issuing rules. He said many regulations weren’t designed to cope with nature of small carriers.

WorldCom made largest Chapter 11 filing in U.S. history late Sun., leading FCC Chmn. Powell to issue statement providing reassurances that his agency didn’t believe action would “lead to an immediate disruption of service to consumers or threaten the operation of WorldCom’s Internet backbone facilities.” FCC Deputy Gen. Counsel John Rogovin filed appearance Mon. at U.S. Bankruptcy Court, N.Y., action characterized by spokeswoman as assuring that Commission was official party in proceeding. She said Rogovin’s role would be to make judge aware, during bankruptcy proceeding, of importance of continued service to customers, including federal govt., and need to protect universal service funding, wireless licenses and Internet. Justice Dept. (DoJ) also took action, filing motion requesting independent examiner be appointed to investigate company’s financial affairs.

FCC launched national campaign to educate low-income consumers on obtaining affordable telephone service. Campaign called “Get Connected: Afford-A-Phone” is based on 2 Universal Service Fund programs, Lifeline and Link-Up, FCC said. Lifeline allows qualified low-income persons to obtain monthly discounts on cost of receiving telephone service, Commission said, while Link-Up “offsets half of the initial hookup fee,” of up to $30 and provides deferred payment plan. Eligible residents of Native American and Alaskan Native tribal lands can obtain $25 additional monthly Lifeline support, Commission said, and up to $70 expanded Link-Up support.

Md. PSC ruled state didn’t need its own universal service fund. Because of that determination, it ordered Verizon to reduce its intrastate access charges $13.6 million by lowering local switching rate and residual interconnection charges. PSC said local service wasn’t being subsidized so there was no need to maintain access charges above cost. PSC (Case 8745) also ordered amendments in other tariffs to CLECs and retail customers to alter rates and rate components that had been approved to cover potential costs of any state USF. Agency ordered interexchange carriers to pass along their access savings through lower rates. It also ordered Verizon to set aside $5 million for refunds to toll customers for fees they had been paying toward state USF. Method of refund will be determined later. Verizon has until Aug. 16 to file tariff changes. It condemned access cut decision, saying any rate break for long distance customers would be short-lived. Carrier also said that, given investors’ current distaste for telecom industry, access charge cut would hamper its ability to raise network investment capital.

SAN FRANCISCO -- Rural telcos will survive competitive inroads and threats to universal service funding, to thrive and help restore confidence in business, former FCC Comr. Harold Furchtgott-Roth said here Wed. But they will do so despite neglect of Washington policymakers obsessed with broadband and problems of industry giants, he told OPASTCO convention. None of top 5 issues highlighted on FCC Website involves rural telco issues, he said. “A lot of these problems have been around the last 6 years and nothing has been done about it. Just don’t look to Washington for help.”