Senate Commerce Committee appeared to support Jonathan Adelstein for open FCC Democratic seat after cordial hearing Tues. Committee hasn’t set date for vote, spokesman said. Adelstein, telecom aide to Senate Majority Leader Daschle (D- S.D.), emphasized rural issues during hearing, particularly deployment of broadband, maintenance of universal service fund and improved management of spectrum. “We can’t deploy broadband fast enough,” Adelstein said. Commerce Committee Ranking Republican McCain (Ariz.), whose possible hold had threatened to delay confirmation, called Adelstein “a fine young man.” McCain has threatened holds on all nominations until candidate for Federal Election Commission is approved.

Universal Service Fund (USF) is threatened by mismanagement and confusion of assistance to schools and libraries with traditional function of reaching underserved markets, executives of small telcos said Tues. “There’s a cancer in USF called USAC [Universal Service Administrative Corp.],” said A.J. Passarella of Loretto (Tenn.) Telephone Co. National Exchange Carriers Assn. owns USAC but has no control, said NECA board member Robert Eddy of Sherburne County (Minn.) Telephone Co. “I'm not sure who does.” He said wireless carrier claiming USF payments reported number of lines in county almost equal to population and after being challenged shifted thousands of those lines to another county. Overall, unequal USF burdens and benefits favor wireless carriers and burden rural telcos, said Eddy and Wheat State Telephone’s (Kan.) Archie Macias. Passarella said school districts received USF money for poor schools, shifted purchased resources to rich ones, then got more funds for poor schools.

SAN FRANCISCO -- Internet not only is undercutting rural telcos’ regulatory-based revenue sources, but also is shifting their policy focus away from states, industry conference heard here Mon. As e-mail, instant messaging and Web-based services, along with cell calls, increasingly supplant wireline voice and fax communications, local incumbents’ access revenues plunge correspondingly, compounding regulatory reductions in access rates, Chmn. Robert Riordan told convention of OPASTCO.

Mich. PSC called for comments by Sept. 9 on whether it should create state universal service fund (USF) to supplement federal universal service support. PSC (Case U- 13477) asked parties to comment on: (1) Whether state USF was necessary. (2) Effects of USF on affordability under rate regime of total element long-run incremental cost. (3) Other effects on state and industry if PSC were to create fund. Parties also were asked to make suggestions on how PSC should conduct USF inquiry and timeline it should follow.

Board composed of FCC and state commissioners has recommended that Commission not make any additional services eligible for universal service funding. Under that recommendation, issued late Tues. by Federal-State Joint Board on Universal Service, FCC would retain present “definition” of universal service. Joint Board said it wouldn’t be in public interest to fund any of new services proposed by various parties because none of them met statutory criteria for inclusion.

One of major themes of new technology developers and equipment makers in comments this week sought by FCC’s Spectrum Policy Task Force has been need for more spectrum for unlicensed devices and bands for rapid testing of new technology. “Cisco believes that these ‘unlicensed’ networks have the potential to create an entirely new broadband network for all Americans,” company said. It urged FCC to allocate spectrum specifically for unlicensed data networks and called for “spectrum etiquette rules” to mitigate interference and allow for more efficient use of those bands. Among task force questions concerning Part 15 was whether types of permissible unlicensed operations should be expanded, what rule changes would be needed to accomplish that and how to put that spectrum to its highest valued use as congestion of those bands increases. FCC Chmn. Powell created the task force earlier this year to explore far- reaching spectrum policy issues, ranging from Part 15 overcrowding to whether spectrum in rural areas should be regulated differently from that in urban markets.

Federal-State Joint Board on Universal Service was poised to release recommendation to FCC on revising definition of universal service. Revision is being contemplated to determine whether new services should be eligible for universal service funding. Joint Board reportedly tied 4-4 on whether to require that wireless carriers provide equal access to long distance companies if they wanted to be eligible for universal service funds.

Requiring all facilities-based broadband providers to contribute to schools and libraries (e-rate) portion of Universal Service Fund (USF) would create level playing field and broaden the pool’s funding base, Verizon Regulatory Affairs Dir. Scott Randolph told FCC in ex parte filing July 2. Randolph’s letter came after reply comments deadline for broadband wireline proceeding at FCC July 1, in which some cable operators expressed opposition to Verizon’s proposal.

FCC is expected late this year to complete rulemaking in which it proposes regulating Bell-company DSL as information rather than telecom service, thus exempting it from unbundling rules for new fiber build-outs (CD July 2 p4, July 1 p1). Interest this rulemaking has generated across the Internet and telecom sectors was reflected in unusually high number of reply comments FCC had received, with more than 50 already posted to agency’s Web site Tues. As with first round of comments, most replies urged FCC not to regulate DSL as information service. SBC and Verizon, meanwhile, promised to work with ISPs in broadband, having reached understanding with Internet trade group of which both are members.

NARUC told Sen. Breaux (D-La.) July 1 that state regulatory agencies still have some jurisdiction over DSL broadband services. NARUC was replying to questions Breaux had for Assn. in May 22 Senate Commerce Committee hearing on broadband. Robert Nelson, vice chmn., NARUC Telecom Committee, and member of Mich. PSC, said Breaux-Nickles broadband bill (S-2430) presumed FCC and courts already had determined scope of state jurisdiction over broadband, which they hadn’t. Comment deadline was Mon. in FCC rulemaking to affirm its tentative decision to classify broadband as information rather than telecommunications service (see separate story in this issue). Ruling broadband is information service would make it exempt from unbundling and regulatory oversight by PUCs, particularly in regard to consumer protection enforcement, NARUC said.