The FCC approved Verizon Wireless’ acquisition of Alltel and the Sprint Nextel-Clearwire WiMAX partnership, in an Election Day meeting that started hours late. But commission members expressed continuing concerns about the Verizon deal’s effect on wireless competition nationwide.

A new Universal Service Administrative Co. report proves the FCC needn’t revamp Universal Service Fund contribution, the National Association of State Utility Consumer Advocates said Monday. In the report, USAC projected it would need to collect $1.6 billion in Q1 2009. “If the revenues subject to assessment for the first quarter are consistent with prior quarters, the USF assessment factor for the first quarter will likely be at its lowest since the end of 2006,” NASUCA said. That shows that “the current revenue-based mechanism is not in crisis,” said David Bergmann, chair of NASUCA’s telecom committee. “There is no need for a switch to a numbers-based, connections-based, or hybrid system.”

Failing to win colleagues’ support, FCC Chairman Kevin Martin deleted an overhaul of the Universal Service Fund and intercarrier compensation from Tuesday’s meeting agenda. The order remains on circulation, but the agency will vote on no items related to USF or intercarrier compensation at the meeting, an FCC spokesman said. In a joint statement, the other four commissioners laid the blame on the chairman.

The FCC overhaul of the Universal Service Fund and intercarrier compensation appeared to be up in the air. In a note Friday, Stifel Nicolaus said four FCC commissioners planned not to vote Tuesday on Chairman Kevin Martin’s proposed overhaul of the Universal Service Fund and intercarrier compensation. “Instead, the commissioners plan to work towards a vote in December, giving parties more time to review and comment on reform proposals,” the analysts said. Martin hasn’t agreed to the December target, they said. The other commissioners told Martin they want comment on his plan and another shot at overhaul at the Dec. 18 meeting, two FCC officials told us, but the outcome is unclear. They called the situation “fluid” and said talks would continue over the weekend. Commissioners still plan to vote Tuesday on how ISP-bound traffic should be compensated, an issue that a court required them to tackle by Wednesday, they said.

Mid-sized rural carrier stocks have dropped an average of 25.9 percent in the 13 days since FCC Chairman Kevin Martin revealed his plan for overhauling the Universal Service Fund and intercarrier compensation. The category includes Embarq, Windstream, CenturyTel, Frontier, Fairpoint, Iowa Telecom and Consolidated Communications. The drop is steeper than that of the overall market. The same period, the Dow Jones Industrial Average declined 2.2 percent. The S&P 500 fell 4.9 percent, while the S&P Telecom Index grew 1 percent. During the 13-day period, AT&T shares rose 4 percent, while Verizon gained 5.4 percent. Mid-sized carriers balk at Martin’s plan, which they say could cut their revenue so far they wouldn’t be able to recoup costs. Their trade association, the Independent Telephone & Telecommunications Alliance, has asked the agency to put the revamp plan out for public comment.

The Texas Public Utility Commission set a Nov. 5 hearing for a 25 percent Lifeline subsidy increase proposed by the PUC staff. The staff proposal (Case 35629) would apply in service areas of AT&T, Verizon, Windstream and Embarq as of January. The higher Lifeline subsidy would help implement a universal service fund overhaul settlement approved early this year, the staff said. The proposal was supported by the four telcos and the state Office of Public Counsel.

The FCC should vote Tuesday as planned on comprehensive universal service fund and intercarrier compensation reform, John Rose, president of the Organization for the Promotion and Advancement of Small Telecommunications Companies, said in an interview Friday. OPASTCO and the Western Telecommunications Alliance fear that a delay until December could mean the FCC won’t include edits to the intercarrier compensation component that the small rural carrier groups earlier last week worked out with FCC Chairman Kevin Martin, Rose said.

Parties got three more days to make their case for or against the proposed white spaces order -- until 5:30 p.m. Friday. The commission cut off lobbying Tuesday night on the other items scheduled for votes at the Nov. 4 meeting. But the extension could be bad news for broadcasters. Chairman Kevin Martin agreed to allow additional time, we've learned, at least partly at the urging of Google CEO Larry Page, who wanted the FCC to consider his company’s request to permit higher power levels for devices that use the white spaces.

Tuesday will see voters in 10 states fill 17 contested state commission seats. Nine seats lack incumbents running for re-election. Telecom has been a major campaign issue in Nebraska, where candidates have sparred over phone bill surcharges that support universal service and 911. In four other states, broadband and wireless infrastructure expansion have been concerns. Ethics and character have been major issues in five states. Energy matters have overshadowed telecom in many states.

Two trade association for small rural carriers said they back the FCC’s overhaul plan for the Universal Service Fund and intercarrier compensation, after FCC Chairman Kevin Martin agreed to several concessions for rate-of-return carriers. The Western Telecommunications Alliance and the Organization for the Promotion and Advancement of Small Telecommunications Companies approved the plan after “numerous direct conversations” with Martin, including a conference call Tuesday night ending around 7:45 p.m., directly before the start of sunshine. The National Telecommunications Cooperative Association called the endorsement “very risky and dangerous.”