Neb. Supreme Court denied petition for direct hearing of lawsuit challenging legality of PSC’s 7% state universal service fund surcharge. Action means case must work its way through lower state courts. David Domina, attorney for plaintiffs in class action suit on behalf of all Neb. telecom ratepayers, said case would be filed in Lancaster County Dist. Court. Top Neb. court gave no reason for refusal to hear case. Suit alleged that surcharge set by PSC in 1999 actually was state tax that could be imposed only by act of legislature. Surcharge generates $55 million annually for state USF.

FCC is expected today (June 13) to take action on AT&T request that it apply unused e-rate funds to reduce universal service fund (USF) assessment on long distance carriers. Commission has scheduled vote on unused funds issue at agenda meeting, although it hasn’t indicated how vote will go. AT&T Vp Robert Quinn acknowledged that company had urged agency to take such action. He said AT&T first made proposal in March in response to FCC request for comment on what to do about $950 million in unused e-rate funds. Company stepped up its lobbying recently after Universal Service Administrative Co. (USAC) announced it would have to raise USF assessment to 8.77% of interstate revenue, up from 7.28%. Quinn said that would translate to further increase in 11.5% USF fee now charged to its customers to cover assessments. Customer fee is higher than percent paid by AT&T because of company’s continuing problem of declining revenue. Fee charged to AT&T is based on level of revenue 6 months earlier. By time AT&T makes contributions, its revenue is lower than that, meaning fees to customers have to be raised to get amount of money required. Quinn said AT&T also stepped up action because time had run out for action on waiver request to help ease revenue problem by letting AT&T base contributions on estimates of future revenue, rather than 6-month-old revenue. New assessments go into effect July 1. He said AT&T separately had asked FCC for longer term fix for declining revenue problem, such as basing contributions on number of lines rather than revenue. Quinn said problem appeared to be more acute for AT&T than some companies. Companies such as Verizon that are just entering long distance business have increasing revenue, he said. Some carriers have opposed AT&T’s initiative for fear it will muddy larger contribution reform issue. Meanwhile, FCC set 1 p.m. June 21 meeting to explore broader issue of whether to change USF contribution methodology. Agency late Wed. said it wanted “additional input from industry and other affected parties” on proposals to reform contribution system. Commission said it invited state members of Federal-State Joint Board on Universal Service to join in presiding over meeting.

Senate Commerce Committee said hearing on universal service funding, previously scheduled for June 5, will be postponed to June 19. Witness list wasn’t available. Hearing will be before Senate Communications Subcommittee.

Expanded DVD line unveiled by Toshiba at Pasadena line show included company’s long-awaited DVD-RAM recorder with built-in hard disc personal video recorder (PVR) portable universal DVD player with 8.9” LCD screen it said was industry’s only portable with progressive scan.

Modernization of nation’s emergency communications infrastructure requires integration of voice and data systems, not just additional acquisition of more hardware and software, public safety coalition said Thurs. at news conference in Washington. Partnership for Community Safety, group of medical and emergency responder organizations, held briefing in Dirksen Senate Office Bldg. to recommend linking agencies and standardizing communications interfaces. Such interoperability would enable federal, state and local officials to exchange information in emergencies, thereby improving response times and patient outcomes, Assn. of Air Medical Services Exec. Dir. Dawn Mancuso said. National Assn. of EMS Physicians Pres. Richard Hunt said “lack of a methodology to rapidly communicate information was a problem” before and after Sept. 11 terrorist attacks “and hasn’t been solved yet.” He said “intelligent message broker” technology was needed to keep track of and disseminate real time information: “It’s not just about phone lines. It comes down to data.” Hunt said equipment investments were important, but funding to train personnel and support university-led R&D of emergency response best practices was equally critical. ComCARE Alliance Dir. David Aylward said first responders and medical care providers needed access to directories listing other emergency entities, which could be facilitated through Internet protocol system “that ties everyone together.” He said required technology was available in and used by commercial sector and must be brought into use by public safety entities: “It’s more about bringing people together, not going out and inventing something… We don’t have to build a network. It’s already there.”

Alaska Regulatory Commission (ARC) Chmn. Nan Thompson warned state’s lawmakers that failure to reauthorize her agency could endanger federal universal service funding that supported rural telecom service. In letter to legislature, Thompson said if there were no state commission, there would be no agency to handle annual universal service certifications required by FCC. Federal universal service fund (USF) rules require state commissions to make annual certification that USF money is being used for intended purposes. as prerequisite for continued federal support. Agency recently filed certification for 2002 and probably would be able to perform duty for 2003, but after that there would be no entity to ensure that state’s rural telecom carriers continued to receive the $70 million in annual USF support that now flows to Alaska. She said there would be other adverse consequences to Alaska’s economy, state budget and all regulated utilities if ARC weren’t renewed. She said “regulatory and legal confusion” surrounding dying ARC would undermine efforts by state’s telecom, electric, gas, pipeline, water and sewer companies to obtain financing for new projects. Legislature in regular and first special session was unable to break political barrier raised by key Senate Republicans that had blocked ARC reauthorization. Agency isn’t due to die until June 30, 2003, but Thompson warned that it must start curtailing its activities July 1 unless renewed. Legislature will try again to settle ARC issue in 2nd special session that’s due to convene June 24.

Supporters of Senate Commerce Committee Chmn. Hollings’ (D-S.C.) broadband legislation on Wed. highlighted lackluster demand for high-speed Internet as reason why his more limited bill made more sense than House’s Tauzin-Dingell version. ILEC deregulation legislation, such as Tauzin-Dingell (HR- 1542) and Breaux-Nickles (S-2430), doesn’t address demand issues and would further stifle broadband competition, said witnesses who included Reps. Markey (D-Mass.) and Cannon (R- Utah), 3 state telecom regulators and Pa. state senator. Hollings asked: “We are at a crucial juncture in telecommunications policy -- are we going to hold steadfast to the goal of competition and allow it to continue guiding our decision making, or are we going to allow groups with other objectives in mind to guide our actions?” Opponents of Tauzin-Dingell told Hollings and committee there was no “crisis” in broadband deployment that needed legislative fix. Hollings’ bill (S-2448) is designed to help fund broadband rollout to rural areas. No witnesses spoke in favor of HR- 1542, S-2430 or similar regulatory approaches.

DBS services might see increased potential audience thanks to bill that cleared Senate Commerce Committee Fri. Currently it is against law for anyone to receive DBS signal while at sea (prohibition begins moment ship leaves shore), but Sen. Breaux (D-La.) successfully added amendment to S- 2329, Ship, Seafarer and Container Security Act, to allow any ship to receive DBS signals at sea. Sen. Nelson (D-Fla.) wasn’t present for markup but asked that his objection to provision be noted; otherwise there was no objection and amendment was added, after which bill passed by voice vote. Also approved by voice vote Fri. was S-414 by Sen. Cleland (D-Ga.). Bill would create grant program at NTIA to give historically black colleges and universities, Hispanic- serving institutions, tribal colleges and Alaska Native and Native Hawaiian higher education institutions $250 million to buy computers, wire campuses and provide technology training. Original bill called for funding in FY 2003, but committee adopted Cleland’s amendment changing year to FY 2004.

FCC ought to impose freeze on universal service outlays and reevaluate programs funded by universal service money, VoiceStream said in reply comments filed Mon. in Commission’s proposed rulemaking on how universal service contributions were collected (CD April 24 p6). “Federal taxes and regulatory fees already exceed 10%” of consumer’s bill and “continued, unexamined fee growth could push these federal regulatory assessments toward 15%,” VoiceStream said: “There is a crisis looming over the [universal service] program, but the crisis is not caused by the contributions methodology in place today. The crisis is rather due to the fact that the size of universal service subsidy outlays has been allowed to grow -- with additional growth in disbursements already planned -- without a thorough examination of the sufficiency of the program.” Changing methodology, main topic of FCC call for comments, won’t help if program keeps growing in size, VoiceStream said. It said it was “firmly committed to universal service” and to providing its “fair share… even though it does not receive any subsidy dollars in the provision of its mobile services.” However, company said, it’s “unreasonable” to keep raising contributions from wireless customers. Current 15% safe harbor for wireless contributions is “equitable,” despite criticism by coalition of wireline companies and customers that wants to raise it, VoiceStream said. “There is no evidence to suggest that on average, wireless customers have higher interstate usage levels compared to customers of fixed landline service,” company said. Critics have said wireless safe harbor understates amount of interstate revenue earned by wireless providers. Universal service contributions are based on interstate revenue. “The only evidence that the Coalition presents in support of their allegation is that the growth in CMRS interstate revenues [reflected in contributions] has not matched the decrease in IXC interstate revenues,” VoiceStream said. That argument “is simply not credible” and “ignores technological bypasses of the networks and the economic downturn,” company said. “Wireless migration is, of course, a partial reason that IXCs are losing revenues but it is certainly not the sole cause.”

Senate 64-35 approved farm bill conference report that would provide $100 million in rural broadband loans and loan guarantees from 2002 to 2007. Bill had moved slowly in 107th Congress due to controversy over several agriculture and nonfarm subsidy provisions. Although $100 million total for broadband infrastructure deployment initially had been proposed for distribution each year, conference compromise would allot: (1) $20 million for each of fiscal years 2002 through 2005. (2) $10 million for each of FY 2006 and FY 2007. Despite reduced total for Rural Utilities Service (RUS)-administered program, several senators said funds would benefit underserved rural areas. Sen. Dorgan (D-N.D.) said Wed. on Senate floor that in light of unparalleled success of past RUS telecom loan programs, combined with Treasury rate of interest, $20 million annual authorization could be leveraged into “broadband loan program of at least $750 million a year.”