The FCC could boost interest in 700 MHz spectrum among small businesses by allowing bids for small geographic blocks, FCC Commissioner Jonathan Adelstein said at a Minority Media & Telecommunications Council conference Monday. To help minorities buy radio and TV stations, Adelstein and Commissioner Robert McDowell said, Congress should reinstate tax certificates. Until Congress killed them in 1995 out of fear they were being abused, such certificates gave companies tax breaks for selling media assets to minorities. The National Association of Broadcasters is among the supporters of reinstatement (CD July 16 p13).

Competitive telecommunications providers increasingly are serving rural towns but they are not going to surrounding areas where providing service costs more, said a study of universal service funding sponsored by four telecommunications companies that operate in rural areas. Competition in small towns boosts the need for Universal Service Fund (USF) support in surrounding areas because it cuts incumbent phone companies’ ability to ease financial burdens by averaging, consultants Balhoff & Rowe said in the report. CenturyTel, Consolidated Communications, Embarq and Windstream filed the study with the Federal-State Joint Board on Universal Service, now studying ways to improve the universal service program. The four companies serve small and midsized communities nationwide. The study, based on Texas Universal Service Fund operations, concluded that competitors “appear unlikely to offer services” in outlying areas soon, with significant potential effects on the universal service program. “Competitors are making the financially rational choice to avoid serving high-cost areas altogether, but carriers of last resort, like the four sponsors of the study, are compelled to serve the areas outside rural towns -- often at a significant loss,” the companies said in a release. With increased competition in towns taking lines from rural incumbents, “internal cross- subsidy systems” used to average costs “will prove inadequate,” the study said. “Historically, policymakers have relied at least in part on monopoly-based support systems founded on internal company cross-subsidies to maintain affordable rates in uneconomic service areas,” the study said. “Those internal cross-subsidy systems almost certainly will prove inadequate to cope with emerging competitive patterns.” A wireless industry representative, speaking on condition of anonymity, said the study did not provide data on wireless costs or coverage patterns, relying mainly on data about cable and competitive wireline overbuilders.

Funding for distance learning in rural areas was included in an amendment to the Senate Appropriations Committee bill approved July 12. The amendment, offered by Sen. Ted Stevens, R-Alaska, would exempt Universal Service Fund subsidies for rural schools and health clinics from accounting rules under the Anti-Deficiency Act. The amendment also would prohibit the FCC from spending to carry out the primary line restriction proposed by the Joint Board on Universal Service. The underlying bill would give the FCC $313 million for fiscal 2008, $21.7 million more than the previous year, to “improve oversight over the rapidly changing telecommunications industry.” Funding is nearly the same in the bill that the House passed June 28 (CD June 27 p1).

The National Association of Regulatory Utility Commissioners (NARUC) faced a heaping plateful of telecom resolution proposals at its summer meeting in New York City, set to open Sunday, July 22. Proposed resolutions address Universal Service Fund (USF) reform, VoIP number use, broadband over power lines, wireless termination fees, the digital television transition and IP relay fraud.

South Carolina cable and competitive carrier interests asked the state Supreme Court to reconsider a June decision upholding Public Service Commission rulings that interstate revenues can be assessed to support the state universal service fund. The South Carolina Cable TV Association and Southeastern Competitive Carriers Association had claimed that the state fund discriminated against competitive providers and impermissibly affected federal universal service support mechanisms by assessing interstate revenues. The court (Opinion 26354) rejected both claims. The groups sought reconsideration of the issue of state encroachment into the federal domain. They said the court failed to consider decisions in the winter by a district judge and the 5th U.S. Circuit Court of Appeals that Texas regulators had violated federal law by assessing interstate revenues to support the intrastate fund. The plaintiffs said the rulings were crystal clear in holding that the federal fund is to be supported by interstate revenue, whereas state funds are to be supported only from intrastate revenue.

Qwest on Monday gave the FCC details of its plan to reform the Universal Service Fund (USF). Qwest wants to divert USF subsidies from rural wireless carriers by limiting distribution to a grant per household rather than per connection, and use the proceeds to fund rural broadband deployment (CD June 28 p6).

Qwest on Monday gave the FCC details of its plan to reform the Universal Service Fund (USF). Qwest wants to divert USF subsidies from rural wireless carriers by limiting distribution to a grant per household rather than per connection, and use the proceeds to fund rural broadband deployment (WID June 28 p4).

The Arkansas Public Service Commission (PSC) staff urged that a proposal by AT&T form the basis for turning the state universal service subsidy system from a revenue replacement program into an actual high-cost fund subsidizing carriers with above-average loop costs. A 2007 state law repurposed the fund but left transition mechanics to the PSC. The staff endorsement of the AT&T draft (Case 07-062-R) was echoed by a dozen rural incumbents, which agreed that the implementing the draft would mean fair, balanced and efficient administration of the new high cost fund. The rules would make access lines the main measure for categorizing the size of local providers seeking universal service subsidies. Under the law, different support formulas would apply to different size companies. If a carrier wanted to use customer count, the proposal would require that an independent audit verify the count’s accuracy. The draft details administrative processes for handling contributions and disbursements, calling for completing the transition by December 31.

A federal appeals court upheld a district judge’s decision to block AT&T North Carolina customers from pursuing a state court class-action suit alleging that AT&T overcharged them for its federal universal service contribution. The class of affected customers, led by AT&T customer Tomi Bryan, sued in state court alleging violation of North Carolina’s unfair trade practice law. They claimed that AT&T recovered more than its required universal service fund contribution, failed to disclose how it calculated the fee and deceived customers about what the fee covered. AT&T got the case moved to federal court, which dismissed all except the deception claim, sent back to the North Carolina courts. AT&T appealed the remand to the 4th U.S. Court of Appeals, Richmond, on ground the deception claim was actually federal. The 4th Circuit agreed with AT&T, ruled that the claim was without merit and should have been dismissed with the other federal claims. AT&T went back to the state court asking it to dismiss the class action suit as moot, but the state court refused. AT&T returned to the federal district court and got an injunction against further state court proceedings, but the plaintiffs appealed the injunction to the Fourth Circuit. The appeals court (Case 06-1746) ruled that the plaintiffs were improperly trying to keep pursuing in state court a damage claim identical to the one dismissed by the federal tribunal. The court said it would be an abuse of judicial discretion to permit state court prosecution of a federal damage claim ruled invalid under federal law.

The University of Toronto is training graduate social- work students to provide counseling via Internet to children and teenagers. Funding is by the Victim Services Secretariat of the Ministry of the Attorney General, the university said. Queries to the “Ask a Counselor” section at the Kid Help Phone website, the online form of Canada’s youth counseling hotline, will be answered by student counselors with faculty supervision. “Cyber counseling is an ideal medium because it provides accessibility to those youth who are isolated and anonymity for those that are reluctant to seek traditional counseling or support in a face-to-face situation,” Professor Faye Mishna said. The university program is among the first to offer formal training in cyber counseling, the school said.