Basing industry contributions to the Universal Service Fund on telephone numbers rather than revenue not only would make the fund more stable but also would benefit consumers, George Mason University’s Mercatus Center said in a Nov. 2 letter to the FCC. The center said its comments are based on its own views and not those of any interest group. The current revenue-based system acts like a usage tax, Mercatus said. It raises consumer costs, leading to reduced consumer use of services and lower industry revenue, a cycle that economists call “deadweight loss,” Mercatus said. On the other hand, a numbers-based system “would have little effect on subscription rates,” at least for wireline services, it said. That’s because “demand for wireline service is almost completely inelastic, meaning that customers will generally continue to purchase the service, regardless of price changes,” the letter said. The group said “wireless service is more complicated but careful analysis still suggests benefits from changing the assessment methodology.” FCC Chairman Kevin Martin long has championed changing the contributions system to one based on telephone numbers.

Though data released last week by the FCC show the wireless broadband’s growing importance (CD Nov 2 p8), policymakers shouldn’t ignore that wireline facilities are needed to support its expansion, said Executive Director Curt Stamp of the Independent Telephone & Telecommunications Alliance Friday. “While wireless broadband has expanded rapidly into the marketplace, policy makers must remember that the robust and reliable wireline network provides the underlying infrastructure that makes wireless broadband services possible,” Stamp said. “Stable and adequate Universal Service Fund support for incumbent local exchange carriers is necessary in order to enable continued broadband deployment throughout the nation.”

FCC Commissioners Robert McDowell and Jonathan Adelstein likely will come in for intense lobbying in coming weeks, as wireless carriers seek to beat a cap proposed for Universal Service Fund payments. The carriers want to know why they're getting special attention as the FCC tries to curb the fund.

Though data released last week by the FCC show the wireless broadband’s growing importance (WID Nov 2 p5), policymakers shouldn’t ignore that wireline facilities are needed to support its expansion, said Executive Director Curt Stamp of the Independent Telephone & Telecommunications Alliance Friday. “While wireless broadband has expanded rapidly into the marketplace, policy makers must remember that the robust and reliable wireline network provides the underlying infrastructure that makes wireless broadband services possible,” Stamp said. “Stable and adequate Universal Service Fund support for incumbent local exchange carriers is necessary in order to enable continued broadband deployment throughout the nation.”

Wireless broadband easily outpaced wireline last year in new high-speed broadband connections, the FCC said in its twice-yearly report on U.S. broadband data. The commission’s numbers echo reports from wireless carriers about rapid growth in their data offerings. Wireless carriers hope the FCC will view the report as evidence it shouldn’t cap Universal Service Fund payments to competitive eligible telecommunications carriers (CETCs).

Wireless broadband easily outpaced wireline last year in new high-speed broadband connections, the FCC said in its twice-yearly report on U.S. broadband data. The commission’s numbers echo reports from wireless carriers about rapid growth in their data offerings. Wireless carriers hope the FCC will view the report as evidence it shouldn’t cap Universal Service Fund payments to competitive eligible telecommunications carriers (CETCs).

FCC Chairman Kevin Martin has circulated an order and two notices of proposed rulemaking on Universal Service Fund reform, sources said. The items started circulating Oct. 26. The order, based on the Alltel merger order, would cap USF payments at June 2007 levels, unless a carrier filed cost data showing its per-line costs are less than the capped funding level. Martin also circulated two rulemakings. One would provide for reverse auctions for USF payments, the other would eliminate the identical support rule. The items could be taken up at the Nov. 16 FCC agenda meeting. The notices could prove touchy because they sidestep the Joint Board on Universal Service in making long-term changes, sources said Thursday. Ray Baum, an Oregon regulator who serves as state chairman of the joint board, told a CTIA conference last week he worries that the joint board’s work may come to naught. “We might not be able to get anything out,” he said.

The Justice Department cleared AT&T’s purchase of Dobson, but will require AT&T to sell assets in seven rural markets in Pennsylvania, Texas, Kentucky, Missouri, and Oklahoma and give up the Cellular One brand. The merger still must clear the FCC. FCC Chairman Kevin Martin has asked the FCC to set on Dobson the same Universal Service Fund cap imposed in the Alltel privatization (CD Oct 29 p1). Analyst firm Stifel Nicolaus doesn’t expect the FCC to set conditions other than the USF cap, it said in a research report.

The House and Senate Commerce committees approved broadband bills aimed at helping facilitate services in rural and underserved areas. Bills reauthorizing the FTC’s do-not- call registry also were approved in both committees Tuesday. Separately, Senate Commerce approved a bill (S-1853) that would enable state and local governments set up their own wireless networks, and another (S-1675) setting standards for low-power radio. House Commerce passed bills ensuring that all voice providers could supply 911 services (HR-3403), and requiring the FTC to set up an Internet safety education program (HR-3461).

BOSTON -- Prepare for more VoIP regulation as the FCC more often treats VoIP as it does traditional phone service, panelists said Tuesday at the VON conference. The VoIP industry must pay more heed to rules emerging at the federal, state and international levels, they said. “You need good legal counsel to navigate these kinds of things,” said VON Executive Director Jim Kohlenberger.