S.D. doesn’t have to actually provide all services included by FCC in universal service entitlement in order to receive universal service subsidies. State’s highest court said that if carrier was “capable” of offering those services, it could obtain eligible telecom carrier (ETC) status that qualified it to receive support from federal and state funds. Court was ruling on appeals of lower court decision to remand back to PUC decision denying Western Wireless ETC status for its fixed wireless local services so PUC could take another look at public interest implications. Supreme Court said it didn’t want to “hamstring” PUC, but said it was “vital” that there be minimal delay in allowing Western subsidiary GCC License Corp. to begin operations.

AT&T said it was “encouraged” that FCC shortened lag time between carrier’s accrual of revenues and assessment of its Universal Service Fund (USF) contribution (CD March 15 p5). However, that won’t solve problem entirely, carrier said. AT&T said it looked forward to participating in FCC’s upcoming proceeding to consider ways to simplify entire USF cost recovery process and eliminate lag entirely.

FCC modified methodology used to assess contributions carriers make to federal universal service support mechanisms by reducing interval between accrual of revenues and assessment of contributions based on those revenues. To base assessments on revenue data more reflective of current market conditions, interval was reduced to 6 months from one year. Agency said existing process “may place carriers with decreasing interstate revenues at a competitive disadvantage as compared to carriers with stable or increasing interstate revenues.” Some carriers had complained that basing contribution on year-ago revenue was unfair. They said if their revenue went down in current year they would end up paying greater percentage of their current revenue into universal service fund than other carriers. Agency said it still thought current methodology was “competitively neutral” and met Telecom Act but “we conclude that reducing this interval will be superior to the current methodology by basing assessments on revenue data that are more reflective of current market conditions.” FCC said it decided against alternative of basing contributions on current revenues as AT&T sought because it would increase reporting burdens on carriers.

Rural telcos warned FCC in reply comments filed Mon. that altering Multi-Assn. Group (MAG) plan to reform rural universal service and access charge programs would destroy it. Alliance of Incumbent Rural Independent Telephone Companies (AIRIT), coalition of 90 companies formed after initial comments were filed Feb. 26 on MAG plan, said it was based on finely crafted compromises. They said rural companies bought into plan only if all terms were retained to reflect those compromises: “In good faith, rural companies have generally endorsed the efforts of their various associations to work together to develop a ‘holistic’ plan for change in access charges, the universal service fund and subscriber line charges.” Companies expected FCC to either adopt or reject it, they said. However, many parties since have proposed changing it and rural telcos “must act to protect their rights,” AIRIT said. Comments “clearly demonstrate the intent of other… parties and interest groups to utilize the MAG and RTF [plans] as forums to advance their business agendas as opposed to the public interest,” they said. Telcos said they were even more concerned because alternative Rural Task Force (RTF) plan appeared to be inconsistent with Telecom Act. They said RTF would have to be changed to clarify its “disturbing aspects.” AIRIT said rural telcos were confused about RTF and didn’t realize it had problems: “The consensus reached by the rural industry as reflected in the MAG proposal did not contemplate the implementation of the troubling aspects of the RTF… plan.” Telcos said problem centered on RTF plan to convert universal service funding to per- line basis and make it portable.

CTIA said it supported Western Wireless request that FCC give it eligible telecom carrier (ETC) status so it could qualify for universal service funding for service at Pine Ridge Reservation in S.D. CTIA said determining whether FCC had jurisdiction was “balancing test” since primary jurisdiction usually was with state regulators. However, this is clear-cut, CTIA said. Because population of Pine Ridge is “overwhelmingly Native American,” Western Wireless’s service isn’t subject to state jurisdiction, “but is entirely within the scope of the FCC’s authority,” CTIA said. S.D. PUC denied Western Wireless’s request for statewide ETC status but CTIA said this petition was separate from that.

As expected, Senate Communications Subcommittee Chmn. Burns (R-Mont.) introduced bill that would remove caps and limitations on universal service support by amending Sec. 254 of Communications Act. S-500, which is co-sponsored by Senate Minority Leader Daschle (D-S.D.)and Democratic Sens. Baucus (Mont.), Dorgan (N.D.) and Lincoln (Ark.) would: (1) Eliminate restrictions on size of high-cost support (2) Lift caps on how much universal funding individual service providers could receive. (3) Prevent FCC from enforcing or reimposing “caps or limitations on support mechanisms for rural telephone companies or exchanges they acquire based on fund size or other considerations unrelated to the sufficiency of support.” Burns said bill “would provide rural telephone companies with the resources they need to provide their customers the same high-speed Internet services that families living in urban areas enjoy.” Staffer said fact that bill had 4 Democratic co-sponsors and no Republicans “should not be read into too deeply” and Burns said expected full bi-partisan support “A lot of folks [from Congress] in rural areas obviously are interested in high-speed broadband deployment,” staffer said. Gary Lytle, USTA interim pres., said bill would enable companies “to make critical network upgrades and provide a platform they can build on” to deliver advanced services. National Telephone Coop Assn. (NTCA) said lifting of caps was “long overdue.” NTCA Pres. Michael Brunner said “small independent telecommunications carriers lost out on $130 million last year in vital support due to these caps.” Bill was referred to Senate Commerce Committee.

Sen. Burns (R-Mont.) said Congress needed to address rules governing telco access to public lands to ease carrier deployment of communications infrastructure including fiber cable and wireless towers, he told USTA conference Thurs. USTA attendees asked him whether Congress planned to take up issue, which they said could facilitate broadband service deployment, particularly in western states such as Mont. Burns said roadblocks industry faced in getting swift approval for public rights-of-way weren’t limited to western states, pointing out that W.Va. Sen. Byrd (D) had expressed similar concern on difficulties faced by telcos in eastern states. “I think we're going to need legislation to address all public lands,” Burns said.

Ill. legislature formed special subcommittee in each chamber to consider telecom bills meant to extend, replace or supplement current Ill. Telecom Act that expires July 1. New telecom rewrite subcommittees of Senate Environment & Energy Committee and House Telecom Committee will hold separate hearings March 7 on various pieces of telecom legislation. Proposals on table range from Ameritech-backed bills (SB-134 and HB-492) that would deregulate almost all of company’s operations and services, to WorldCom- backed bills (SB-928 and HB-3243) that would require full structural separation of Ameritech’s retail and wholesale operations. Other bills being considered include SB-1055 to codify into state law federal Telecom Act’s competitive interconnection obligations on incumbents and extend rest of current Ill. Telecom Act until 2006, HB-1005 to simply extend current law 5 more years, HB-2156 to establish state universal service fund, SB-415 to largely deregulate depreciation and allow incumbent telcos to refer customers to their competitive affiliates, SB-595 to require open cable access for high-speed Internet services, SB-605 to remove competitive carriers from state service quality regulation and make it illegal under state law for incumbents to deny CLECs unbundled network elements. Legislature’s current session is scheduled to adjourn around end of May.

Sen. Hillary Clinton (D-N.Y.) aggressively entered digital divide debate last week, introducing as her Senate career’s first legislation package of 7 bills that primarily would provide tax breaks and subsidies designed to encourage broadband deployment in rural areas. She said “poor Internet access” in upstate N.Y. was thought by some to be “the biggest barrier to economic barrier in the region.” Clinton’s proposals would be spread across 3 different committees, not all of which she sits on, and it was unclear how she intended them to be advanced. Her office didn’t return call. All of bills were co-sponsored by group of 9 Democrats: Sens. Baucus (Mont.), Corzine (N.J.), Dayton (Minn.), Dodd (Conn.), Leahy (Vt.), Lieberman (Conn.), Mikulski (Md.), Rockefeller (W.Va.) and Schumer (N.Y.). Among Clinton proposals: (1) $100 million program for state and local govts. to offer subsidized 15-year bonds to fund Internet access improvements (S- 426). Govts. wouldn’t have to pay interest on bonds, and preference would go to projects in underserved areas that included cooperation between govt. and private sector. Bill was referred to Finance Committee, of which Clinton isn’t member. (2) $100 million program of grants and loans for businesses that provide rural areas with Internet service, demonstrate new methods for serving rural areas or connect industrial parks and small business incubators with high-speed links (S-428). Bill went to Commerce Committee, where Clinton also isn’t member, and is co-sponsored by Sens. Bingaman (D-N.M.) and Boxer (D-Cal.) as well as other 9 Democrats. (3) Program funded at $25 million first year, $125 million thereafter, that would provide govt. expertise to help universities transfer new technologies to small businesses more quickly (S-429). Referred to Commerce Committee, bill is backed by 9 and Boxer. (4) $25 million grant for National Science Foundation to research technologies for better rural deployment of broadband (S-430). Bill was sent to Commerce Committee.

Wyo. legislature passed bill to offer universal service subsidies to encourage local service competition by wireless phone companies. It also voted measure to curb intrusive telemarketing. Both bills have been sent to Gov. Jim Geringer (R), with his signing expected. Wireless bill (HB-52) would allow wireless carriers to receive subsidies from state universal service fund if they offered flat-rate local calling throughout their coverage areas. Wireless local service also would have to offer 911, operator and long distance access plus toll restriction capability. PSC would determine wireless carrier eligibility and could cap amount available from $3 million fund for wireless support. Telemarketing measure would direct PSC to impose fine of up to $5,000 per call for calls to users who have put their name on national “no-call” telemarketing list maintained by Telephone Preference Service of Direct Marketing Assn., Farmingdale, N.Y. Contact would be banned effective 60 days after person put name on list. Exemptions include company calling its established customers and merchants making under 225 unsolicited calls annually. Fine also would apply to telemarketers who failed to immediately identify themselves and disclose nature of call. Measure would require telemarketers to register with state attorney gen. before soliciting Wyo. residents.