ELEC Communications will spin off its 2 CLECs, Rochelle Telephone and Telecarrier Services, to an unnamed company, it said Mon. A spokesman said the buyer, whose identity isn’t being disclosed, will assume the CLECs’ negative working capital balances and retire $1.3 million in debt the company owes Laurus Master Fund. ELEC also is changing its name to Persavip to reflect its new focus, CEO Paul Riss said: “We look forward to completing our transition to an IP services company. In the IP world, we are a carrier’s carrier, and we have been attracting significant new wholesale customers, such as Allegiance Communications, that we announced last week. Our new name reflects our total focus on IP, which is unquestionably emerging as the universal network platform for voice, data and video services.”

In its transition to an IP services company, ELEC Communications will spin off its 2 CLECs, Rochelle Telephone and Telecarrier Services, to an unnamed company, it said Mon. A spokesman said the buyer, whose identity isn’t being disclosed, will assume the CLECs’ negative working capital balances and retire $1.3 million in debt the company owes Laurus Master Fund. ELEC also is changing its name to Persavip to reflect its new focus, CEO Paul Riss said: “In the IP world, we are a carrier’s carrier, and we have been attracting significant new wholesale customers, such as Allegiance Communications, that we announced last week. Our new name reflects our total focus on IP, which is unquestionably emerging as the universal network platform for voice, data and video services.”

N.M. regulators approved transfer of Qwest service territory in the Navajo reservation in the state’s northwest quarter to Sacred Wind Communications. The Public Regulation Commission order included transfer of $5.7 million from Qwest’s rural extension fund to a Sacred Wind extension fund. The funds will go to run lines to phoneless Navajo residences and businesses. The PRC noted that Sacred Wind, qualified to get universal service subsidies, recently got a $70 million federal loan for telecom services on the Navajo reservation.

Prospects for a comprehensive telecom bill are dim, considering the unresolved net neutrality arguments going into the next Congress, congressional aides said Thurs. on a Practising Law Institute panel. The neutrality debate doomed telecom legislation in the 109th Congress, Republicans and Democrats agreed, and though the issue is less politicized now that elections are over, it’s still misunderstood. Congress’s role in franchising is uncertain, with FCC action coming soon, and so is the path to dealing with net neutrality, they said.

Google and Yahoo received shareholder resolutions from a group of city pension funds calling on the companies to protect Internet freedom of expression abroad. Tech firms “have failed to develop adequate standards by which they can conduct business with authoritarian governments while protecting human rights, including freedom of speech and freedom of expression,” N.Y.C. Comptroller William Thompson said on behalf of the city’s retirement, police and fire pension funds. They hold shares currently valued at $386 million in the 2 companies, more than 2/3 of that value in Google. The resolutions cite the Universal Declaration of Human Rights and say U.S. tech companies, whose provision of “full and uncensored information through the Internet” is a “major export,” must comply with that U.N. document. Political censorship online “degrades the quality of that service and ultimately threatens the integrity and viability of the industry itself,” the resolutions said. Govts. cited as authoritarian include Belarus, China, Cuba, Iran, Saudi Arabia, Uzbekistan and Vietnam, but the resolutions don’t say whether Google and Yahoo do business with those listed. The resolutions say shareholders want the companies to develop policies with these “minimum standards": (1) No hosting of data in “Internet restricting” countries that can identify users. (2) No “proactive” censorship. (3) Using “all legal means to resist demands for censorship,” and compliance with demands only if made through “legally binding procedures.” (4) “Clearly” telling users when the company has agreed to govt. demands to filter or censor sought content. (5) Telling users about the company’s data retention and 3rd- party sharing practices. (6) Documenting all compliance with govt. demands and making that information publicly available. Reporters Without Borders, which helped draft an earlier resolution with investment firms (WID Nov 8/05 p2), praised the pensions funds for using their “financial and symbolic weight” to press Google and Yahoo.

The FCC should “act swiftly” to keep the Universal Service Fund (USF) program running after Dec. 31 by redirecting unused funds, 31 House lawmakers wrote in a letter to Chmn. Martin last week. The program will be imperiled by the Dec. 31 expiration of its exemption from Antideficiency Act (ADA) accounting rules. ADA rules bar agency spending unless cash is in hand, a hobble for the USF program. A Commerce-State-Justice appropriations bill that includes a permanent exemption from ADA rules for the USF E- rate program has been deferred to the next Congress. House lawmakers told the FCC they will keep working toward a “more lasting solution to protect consumers from disruptions to USF programs and increased USF phone bill charges.” In the short run, the FCC should direct USAC to apply unused money to 2007 commitments while remaining ADA-compliant, they said.

FCC Comr. Tate is “energized” at the thought of reverse auctions to set rural universal service subsidies, she said Wed. at a Phoenix Center conference. Tate wants to hear “positives and negatives” about use of auctions,” she said. “Something needs to be done” about Universal Service Fund growth, Tate, who is Universal Service Joint Board chmn., said: “I think we are at the tipping point.” One thing to keep in mind, Tate said: USF programs must continue to assure adequate infrastructure for homeland security and interoperability needs. Tate moderated a panel on rural broadband that included Dennis Weller, Verizon’s chief economist, who said an outdated USF must change. “Competitive bidding may be the solution” because it “imposes market discipline,” he said. If the USF model is “restructured,” said Brian Adkins, Embarq’s federal legislative dir., rural wireline carriers must shed their carrier-of-last-resort requirements, or all USF recipients must face those mandates. Net neutrality probably will be the top communications issue, above universal service reform, in the Democratic-led Congress, said Daniel Sepulveda, aide to Sen. Obama (D-Ill.). But universal service offers “opportunities for bipartisan cooperation,” he said.

Qwest supports Universal Service Fund (USF) legislation sponsored by Reps. Terry (R-Neb.) and Boucher (D-Va.), the company told the lawmakers Wed. Financing for USF is “unsustainable” and the program needs revamping, the letter said: “Your legislation takes common sense steps toward that end.” Qwest also said greater focus should be placed on rural broadband investment, which the bill takes up. USF distribution needs to be rethought, the letter said, since some rural communities that Qwest serves are denied funds while a few states get most of the money. The company also praised the bill’s attempt to control spending.

The FCC should deny a Cingular request for Universal Service Fund (USF) subsidies in Va., wireline companies said, arguing the big wireless company doesn’t need USF subsidies. Letting Cingular draw on the USF could sap the subsidy program, Verizon said in an opposition filed late Mon. USF subsidies should be used where telecom service otherwise isn’t financially feasible, Embarq said. “It should not be wasted on uneconomic arbitrage,” said the company, a spinoff of Sprint’s wireline operations.

The Tex. PUC recommended that the state legislature next year reform state universal service fund high-cost subsidy programs. The PUC adopted a staff draft report required by a 2005 law ordering the PUC to study the state’s 11 universal service programs and suggest changes to the 2007 legislature. The report (Case 318630) concluded the large-company high- cost support fund, involved in 75% of state USF disbursements, paid a disproportionate share (96%) of its $425 million in payments to the state’s 5 largest incumbent telcos. The PUC said the large-company program is “overdue for updating” to resize or retarget support. The PUC said the small-company high-cost program should get light legislative review, particularly on reasonableness of basic exchange rates and access lines’ eligibility for state subsidies. The report noted rural incumbents’ rates haven’t changed since the state USF fund’s 1999 inception. The report said the other 9 state universal service programs achieve state policy goals and “fulfill their state purposes effectively.”