As it warned in ex parte filing Dec. 13, AT&T raised monthly universal service line-item fee for residential customers to 11.5% starting first of year, from 9.9%. AT&T had asked Commission for permission to change formula used to determine contributions to Universal Service Fund (USF) because falling revenue had skewed it. It said problem was that FCC determined how much a company should contribute to USF using revenue from 6 months ago. When company’s revenue is falling, as AT&T’s is, using that contribution factor on lower current revenue results in larger per-customer fee, company said. It had asked for permission to base its contribution factor on projected revenue rather than 6-month- old revenue and had offered to true up contributions if there were shortfall once actual revenue total was available.

National Telecom Co-op Assn. (NTCA) told FCC it opposed proposal submitted by Ad Hoc Telecom Users Committee, AT&T, E-commerce Telecom Users Group and WorldCom to revise way Universal Service Fund (USF) contributions are collected (CD Nov 20 p1). In Dec. 21 letter to FCC Chmn. Powell, NTCA said proposal’s goal seemed to be to relieve long distance companies “of their obligation to make equitable contributions” to USF. That is “in direct violation” of Sec. 254 of Telecom Act that requires all interstate carriers to contribute on equitable basis, NTCA said. “The proposal is couched as a plan to replace the current USF assessment mechanism with a flat-rated per-line charge,” wrote NTCA CEO Michael Brunner. “It is more than that,” he said: “If adopted, the class of carriers providing interexchange services such as those provided by AT&T and WorldCom would have no obligations to contribute to the mechanisms.”

Vivendi Universal signed another big deal, purchasing USA Networks for $10.3 billion in stock and cash, adding more content assets to its portfolio just days after it announced $1.5 billion investment in EchoStar. That content includes USA Network’s signature cable channel, as well as Sci Fi Channel, Home Shopping Network, Trio, others. USA Networks will be renamed USA Interactive and will oversee company’s Internet assets: Ticketmaster.com, Match.com, CitySearch.com, Hotel Reservations Network, others. Deal also is pending to acquire travel service Expedia. Having all those interactive assets, “so well-funded, so strong and independent… gives us a great chance to dominate a business sector that will undoubtedly become one of the most important in the world,” USA Networks CEO Barry Diller said. USA will receive $1.62 billion in cash and $750 million full value preferred interest. Company said USA Interactive, while having board representation from Liberty and Vivendi Universal, would be “completely independent.”

FCC Office of Inspector Gen. (OIG) said some people could be misusing govt. money that was supposed to go toward wiring schools and public libraries for computer access. OIG has referred 11 cases of possible waste, fraud and abuse to FBI and one case to Dept. of Justice. IG Walker Feaster said none of allegations were against FCC employees, but against some who had received money from Universal Service Administrative Co. (USAC), which distributes money from FCC’s Universal Service Fund. Feaster said cases were passed on to other agencies because they could involve criminal violations. He declined to provide details, citing pending investigations, but said they involved e-rate funds. Both FBI and Justice are so busy working on terrorism cases, Feaster said, that FCC’s OIG hasn’t been pressing heavily for them to follow up on FCC’s cases: “Obviously the FBI is busy doing other things. We're sort of in a holding status right now.”

FCC Common Carrier Bureau (CCB) seeks comment on remand, by 5th U.S. Appeals Court, New Orleans, of $650 million figure set for new universal service fund under CALLS plan. On May 31, FCC adopted CALLS order, which reformed interstate access rate structure for price cap carriers by removing implicit universal service support and replacing it with explicit support. Commission accomplished that by creating new universal service support mechanism and said that amount fell within range of proposed amounts submitted in proceeding. On Sept. 10, appeals court remanded that portion of CALLS order and concluded that Commission had failed to exercise sufficiently independent judgment in establishing $650 million amount. Bureau specifically seeks comment on uses of cost model, including Commission’s forward-looking high-cost model or study submitted by AT&T to identify appropriate amount. Comments are due 30 days after publication in Federal Register.

Qwest won $60 million, 4-year contract from state of Ore. to provide services including data, video, voice that will be used by state, county and city govts., schools and state-funded universities.

Proposals to fund universal service program on per-line basis (CD Nov 20 p1) would unfairly penalize low-volume users of long distance services, AARP told FCC in Nov. 16 ex parte letter. AARP said consumer who made no long distance calls now paid average of 44 cents per month but proposal by coalition of long distance companies and business users would raise that to average of $1.25. Filing said 44% of consumers were low-volume users and 25% made no long distance calls. “On the other hand, the 20% of Americans who are high-volume users of long distance would see their bills decline from $2.59 to $1.90 on average,” organization said. AARP said it ideally would like system where there was no line item on bills because carriers would recover Universal Service Fund contributions as cost of business. Absent that change, “we support maintaining the existing system… based on a percentage of the cost of long distance phone calls a consumer makes,” AARP said.

Coalition of long distance companies and user groups proposed revising method of collecting Universal Service Fund contributions from carriers, approach that could please some in industry, dismay others. Proposal, outlined to news media Mon. and submitted to FCC in Nov. 7 ex parte letter, was put forward by AT&T, WorldCom, E-commerce Telecom Users Group (ETUG) and Ad Hoc Telecom Users Committee. It would replace revenue-based contribution scheme with flat-rate per- connection fee. Current system collects contributions from carriers for $5.5 billion USF based on percentage of carrier’s interstate revenues. Coalition members told group that current method was unfair to long distance companies that bore bigger share of it than other parts of industry.

PHILADELPHIA -- State regulators meeting here Mon. advanced policy resolutions addressing future of unbundled network element platforms (UNE-P), national wholesale performance standards, accounting, subscriber line charges and several other issues at NARUC annual convention.

Telecom bills in Wis., Ill., Minn. and Mich. legislatures are staying alive but may not see final action this year, which means they all would carry over to 2002 sessions. Wis. Senate unanimously passed bill prohibiting information providers from transferring calls from toll-free numbers to pay-per-call service numbers or international numbers. Bill (SB-35) would make offense criminal misdemeanor punishable by fine of up to $10,000 and up to 90 days in jail. Measure now is before Assembly’s Information Policy & Technology Committee. Bill also would require preamble at start of pay-per-call service directing callers to inform Wis. Dept. of Agriculture, Trade & Consumer Protection if they were connected without consent. Telecom carriers also would be required to furnish Wis. Dept. of Justice with data on call transfers between toll-free and pay-per-call numbers or international numbers. Legislation would prohibit telephone carriers from billing for pay-per- call providers convicted of rule violations, but would allow PSC to grant waivers from billing ban on case-by-case basis. Wis. Senate also passed bill (SB-260) that would conform state wireless service taxation to federal Mobile Telecom Sourcing Act. Wis. bill would tax mobile services if customers’ “place of primary use is within this state, regardless of where service originates or terminates.” Bill now is before Assembly Ways & Means Committee. Recent Ill. bill to prohibit publicly funded schools from selling their students’ personal information to marketers (HB-3641) has been assigned to House Rules Committee. But with only 6 session days remaining before Ill. House adjourns for year, it probably will be carried over to 2002 session. State Rep. John Curry (D-Mt. Zion), bill sponsor, said legislation would ensure that tax-supported school districts or public colleges and universities protected student identities. Bill would bar institutions from selling lists of student names, postal addresses, phone numbers or e-mail addresses to financial institutions that issued credit or debit cards or to commercial business enterprises such as retailers or telemarketers. New bill in Minn. legislature would prohibit toll charges for phone calls that originated and terminated within same school district. Supporters said bill (HF-2585) would help parents and students in sprawling rural school districts who now paid toll charges on calls between school and home. Measure has strong support from rural Democrats but strong resistance is expected from House Republicans. Bill is before House Regulated Industries Committee. Mich. Senate Judiciary Committee recessed for Thanksgiving break without taking action on House-passed “cybercourt” bill (HB- 4140) that would establish electronic online court with full legal authority to address business-to-business civil disputes over $25,000. Bill was scheduled for consideration Nov. 8 but was taken off calendar just before committee session. Panel will return Nov. 28 and will remain in session until mid-Dec.