Carriers won’t need “dollar-for-dollar replacement of lost intercarrier revenues” after an FCC overhaul of intercarrier compensation or the Universal Service Fund, said the National Association of State Utility Consumer Advocates. In comments to “refresh the record” on USF and intercarrier compensation proceedings at the FCC, the group asked the FCC to reject the premise that reducing intercarrier compensation revenue will increase USF demand. Technology and market changes help carriers “mitigate” reform’s impact, it said. For example, “carriers are now generating billions of dollars in [DSL] revenues that they did not generate five or ten years ago,” it said. The group urged the FCC to “reject resoundingly” proposals by Sprint Nextel and others to raise the subscriber line charge to offset revenue lost to reform. “Industry members may find it appealing to ‘pass the buck’ to consumers as a simple way to resolve thorny regulatory problems, but such a tactic would thwart the goal of universal service and unfairly burden consumers,” the group said.

The FCC seeks comments on a waiver petition by Sage Telecom related to Universal Service Fund contributions. Sage doesn’t want the Universal Service Administrative Co. to base the USF annual contribution true-up for under- projections on the average of the two highest contribution factors, nor to figure the true-up for over-projections based on the average of the two lowest contribution factors, the FCC said. Comments are due Aug. 7, replies Aug. 21.

States, competitive carriers and Sprint Nextel oppose an Embarq request to extend cost-assignment rules forbearance to all price cap-regulated incumbent local exchange carriers, they said in reply comments to a request by Qwest and Verizon. The proceeding’s initial comments (CD June 30 p2) dealt only with requests to extend AT&T forbearance to the other two Bells, but Embarq’s comments widened the debate to include other carriers. The FCC should make no “blanket grant” of forbearance, as Embarq has suggested, said the National Association of State Utility Consumer Advocates. “A review of each company’s situation is clearly needed, and companies should not be able to pick and choose which rules they will follow.” Meanwhile, carriers dissected the request. “Embarq’s request is flawed in form and substance, fails to establish that Embarq is similarly situated with AT&T, and its grant would only exacerbate the multiple problems associated with the AT&T order,” Sprint, CompTel, Integra Telecom and TW Telecom said in joint reply comments. The FCC should ignore the Embarq request because it was neither filed as a separate pleading nor labeled a “petition for forbearance,” said the carriers. Embarq has a petition seeking relief from Automated Reporting Management Information System (ARMIS) requirements that also deals with accounting, but the carrier never sought forbearance from cost-assignment rules, they said. If the FCC does consider the request, it should deny, they said. Embarq isn’t “regulated in the same way that AT&T is regulated” under the cost-assignment rules, they said. Unlike AT&T, Embarq gets Universal Service Fund high-cost support, and it isn’t subject purely to price-cap regulation, they said, citing rate-of-return regulation in New Jersey and Oregon. Frontier Communications, like Embarq a mid-sized ILEC, seconded Embarq’s request, adding that no more petitions need be filed to get relief. “Nothing in the Act requires the Commission to limit forbearance to the carrier filing a petition,” and nothing “prevents the Commission from granting forbearance on its own motion in appropriate circumstances even if no petition is filed,” it said.

The California Legislature passed two telecom bills and advanced a third. It sent Gov. Arnold Schwarzenegger a bill to authorize creation of community service districts to build and run broadband telecom facilities and provide retail broadband service until a private company seeks to take over. Under SB-1191, an acquiring business would have to offer broadband service at price and quality levels comparable to what the special district offered. The bill would require a district to make reasonable efforts to find a private provider before delivering its own service. The state has 320 community service districts, formed to deliver particular services and facilities that business hasn’t. The Legislature also passed AB-1976 to increase penalties for repeat violators of a ban on knowingly calling 911 for purposes other than reporting an emergency. Current law caps the fine for multiple offenses at $50 and allows for lesser penalties. This bill would require a $50 fine for second offenses, $100 for a third offense and $250 for any beyond that. The Senate Utilities and Commerce Committee advanced SB-780 to put off four years the sunset for the state’s two universal service high-cost funds. The funds now are to sunset at year-end. One fund is for small rural telephone providers, the other is for high-cost areas of large non- rural local exchange providers.

The National Exchange Carrier Association “has no objection” to a Mid-Rivers Telephone waiver petition that would shift 500 to 600 lines to dominant carrier regulation, NECA said. The FCC had granted a Mid-Rivers petition to be treated as a local incumbent in the Terry, Mont., exchange but limited the finding to section 251 obligations -- keeping the Terry exchange subject to nondominant regulation for interstate communications services and universal service funding. In an ex parte letter to the FCC Monday, NECA said granting Mid-Rivers’ new petition “would create no undue administrative burden for NECA.”

Rules to protect deaf consumers from unwanted marketing and lobbying have created a double standard for how the FCC regulates telecom relay service providers and dial-tone carriers, said relay providers and others. But advocates for deaf people said marketing is one issue for which the FCC should treat TRS providers differently. “If we get abused, the fundamental principles of relay service will not meet its full potential,” said Claude Stout, executive director of Telecommunications for the Deaf and Hard of Hearing (TDI). If TRS users believe their call is being monitored or their data will be used for other purposes, they will be “less confident” to use relay service, he said. “We need to make sure that doesn’t happen.”

The Universal Service Fund for schools and libraries is under the lens of a congressional inquiry into programs prone to payment errors, according to GAO reports and congressional correspondence. The inquiry comes as the FCC must choose a contractor to run the “E-rate” program. The Universal Service Administrative Company, which recently solicited bids for a five-year contract to run the program, sent its recommendation to the FCC last week, a company spokesman told us.

TORONTO -- Striking it far richer than expected, Canada is poised to reap more than C$4 billion from a month-long sale of advanced wireless spectrum. That’s more than twice what government officials and most observers had estimated.

Audio bridging service providers must contribute to the Universal Service Fund, the FCC said Monday, partially denying an InterCall appeal of a Universal Service Administrative Co. ruling. The commission rejected InterCall’s claim that audio bridging providers need not support the fund since they aren’t telecommunications service providers. “The audio bridging services InterCall provides are equivalent to teleconferencing services and are ’telecommunications'” under the 1996 Telecom Act, the FCC said. The FCC told USAC to enforce contribution by audio bridging companies starting with the Form 499-Q due Nov. 1. The requirement won’t apply retroactively, the FCC said, reversing USAC. “It was unclear to InterCall and the industry that stand-alone audio bridging providers have a direct USF contribution obligation,” the commission said. InterCall didn’t respond right away to a request for comment.

The FCC should grant cost-assignment rules forbearance to Embarq and all other price-cap incumbent local exchange carriers that agree to conditions the agency imposed on AT&T, Embarq said in comments on a Verizon and Qwest “me-too” request. In April, the FCC granted AT&T forbearance from cost-assignment rules requiring incumbent carriers to keep records that, among other tasks, separate interstate and intrastate costs (CD April 28 p5). But all of the me-too requests could be rendered moot. Last week, the National Association of State Utility Consumer Advocates challenged the AT&T order, appealing to the U.S. Court of Appeals for the District of Columbia.