Speakers at a NARUC panel on use of reverse auctions as a universal service reform tool said their effectiveness will depend heavily on how the auctions are designed. FCC Chmn. Kevin Martin in March supported the concept as a way to contain universal service fund growth. His idea would make the winning bidder the provider of last resort. For reverse auctions to have a chance to work, speakers said, the auction process must recognize the large cost differences that can exist between locations within the same high-cost area. Brian Stahr, Embarq regulatory economist, said costs can vary by over 400% across a market area, such as between a town or other population concentration and the outlying areas. He said the industry has depended on low-cost downtown lines implicitly subsidizing high-cost outlying areas, but competition is causing that subsidy source to disappear. He said explicit subsidies through the USF aren’t working either, because support is based on a statewide average. Support needs to be more “granular,” he said, such as by census block: “Competitive bids must truly reflect costs of the truly high-cost areas.” Dennis Weller, Verizon chief economist, supported the idea of targeting support to the areas where it’s really needed: “The current system isn’t rational nor sustainable.” He said auctions in areas with multiple ETCs could establish rate models for setting support levels in areas not auctions. He said universal service is “essentially a government procurement process, and bidding is how government procures most everything.” Scott Reiter, NTCA industry affairs dir., disputed the wisdom of reverse auctions, calling them “a big blind leap into the unknown.” He said adoption of auctions won’t address how the universal service fund came to be unbalanced in the first place: “Auctions may be worth a look, but they aren’t the fundamental reform that’s needed.”

Wireless companies that operate in rural areas have formed the Wireless Across America coalition to work for continued Universal Service Fund support for wireless companies. The group plans to “tell Congress to safeguard USF funding for rural wireless service [to assure] the security and economic prosperity of countless rural communities.” The members are the Rural Cellular Corp., Alltel, Dobson, SunComm, Corr Wireless, Rural Cellular Assn. and Bluegrass Cellular.

The Kan. Corporation Commission (KCC) ordered rural incumbent telcos to set their intrastate access charges at their respective interstate levels after concluding the revenue impact would be negligible. State law allows rural telcos to make up access revenue shortfalls from the state universal service fund, up to a specified cap. The KCC said setting intrastate access rates at parity with interstate would mean a mere $40,000 in additional demands on the state USF because only 4 of the 20 rural telcos affected by this decision will see a net reduction in access revenue.

Among Republicans defeated in Tues.’s election were several who made a mark on the telecom business, such as Sens. Santorum (Pa.) and DeWine (O.), and one of the most familiar telecom players on the Hill, Sen. Burns (Mont.), might be joining them. Burns’ opponent, populist farmer Jon Tester, declared victory in the tight race Wed. although Burns’ camp hadn’t conceded by our deadline. Also locked in a tight race, and facing possible recount: Sen. Allen (R- Va.) who’s running against former Navy Secy. Jim Webb. Webb began calling himself the Sen.-elect Wed. but Allen didn’t concede.

The U.K. Office of Communications (Ofcom) is exploring the use of broadband-delivered video relay services to help British Sign Language users communicate, it said Tues. A study commissioned as part of Ofcom’s review of the universal service obligation found that deaf people are generally enthusiastic about the idea and that broadband is the best format to enable sign language interpreters to take part in conversations. The regulator said it will begin looking into how services might be provided and funded.

The U.K. Office of Communications (Ofcom) is exploring the use of broadband-delivered video relay services to help British Sign Language users communicate, it said Tues. A study commissioned as part of Ofcom’s review of the universal service obligation found that deaf people are generally enthusiastic about the idea and that broadband is the best format to enable sign language interpreters to take part in conversations. The regulator said it will begin looking into how services might be provided and funded.

A cadre of 7 high-tech trade groups wants to use phone numbers as a basis for Universal Service Fund contributions. A “flat fee on end users based on working telephone numbers” would encourage development of more “innovative technologies,” the groups told the FCC in a Nov. 3 letter. Today’s system, with its flat-fee “all distance” calling packages, makes a revenue model “unsustainable,” said the Information Technology Industry Council, Semiconductor Industry Assn., Business Software Alliance, Technology Network, Assn. for Competitive Technology, VON Coalition and NetCoalition. “The case for a numbers-based contribution methodology is compelling,” the groups said. They said a numbers-based approach would bring sustainability, efficiency, “protection of innovation,” competitive neutrality and, for consumers, ease of use and predictability.

Seven high-tech trade groups said they support using phone numbers as a basis for Universal Service Fund contributions. A “flat fee on end users based on working telephone numbers” would encourage development of more “innovative technologies,” the groups told the FCC in a Nov. 3 letter. Today’s telephone industry, with its flat-fee “all distance” calling packages, makes the current revenue model “unsustainable,” said the Information Technology Industry Council, Semiconductor Industry Assn., Business Software Alliance, Technology Network, Assn. for Competitive Technology, VON Coalition and NetCoalition. “The case for a numbers-based contribution methodology is compelling,” the groups said. They said a numbers-based approach would bring sustainability, efficiency, “protection of innovation,” competitive neutrality and, for consumers, ease of use and predictability.

With the window closing on campaigning, Democrats are growing excited about their prospects for a full takeover of Congress. Pollsters are predicting a gain from 20-35 seats in the House and possibly 6 seats in the Senate -- a sweep that would give the Democrats a solid though slender win in the Senate. Only 6 incumbent Democratic seats are considered close races -- in contrast to the more than 37 GOP seats that pollsters consider “tossups.”

With the window closing on campaigning, Democrats are growing excited about their prospects for a full takeover of Congress. Pollsters are predicting a gain from 20-35 seats in the House and possibly 6 seats in the Senate -- a sweep that would give the Democrats a solid though slender win in the Senate. Only 6 incumbent Democratic seats are considered close races -- in contrast to the more than 37 GOP seats that pollsters consider “tossups.”