House Commerce Committee will introduce new bill “in next month or so” to replace last session’s HR-2420 that would give Bells more regulatory freedom for data transmission and expects easy passage in House but harder job in Senate, Ken Johnson, spokesman for Committee Chmn. Tauzin (R-La.), said Thurs. Johnson, who participated in panel discussion at Precursor Group conference in Washington, urged audience not to “mistake inaction with indecision” on part of Committee because it still was committed to basic HR-2420 concept. Bill probably will be same as last year’s version although it could change during legislative process, Johnson said. Tauzin looks at current version of bill as setting tone for discussion, he said.

Proposal by Multi-Assn. Group (MAG) to reform universal service and access charge regulation for rural telcos received mixed reviews by groups filing comments with FCC Mon. Organizations that developed MAG plan -- National Rural Telecom Assn., National Telephone Coop Assn., OPASTCO and USTA -- urged FCC to adopt it as it was written because it “best meets the Commission’s multiple policy goals for rural and insular areas.” However, several state regulatory bodies opposed plan, as did several groups representing consumers and business users. NARUC expressed concern Tues. when its Telecom Committee adopted resolution urging FCC to refer MAG plan to Federal-State Joint Board on Universal Service for further review (CD Feb 28 p6).

Top federal telecom policymakers warned state regulators to be cautious as federal govt. and states evaluate telecom policy 5 years after Telecom Act’s passage. In speech to NARUC Winter Committee Meeting in Washington Wed., new FCC Chmn. Powell said state and federal policymakers needed to “focus on new rules for a new network” rather than policies based on “legacy costs.” Senate Communications Subcommittee Chmn. Burns (R-Mont.) said main task facing regulators was “to square the business world with the consumer world,” securing both consumer benefits and business investment opportunities in telecom. House Commerce Committee Chmn. Tauzin (R-La.) cautioned against making politically expedient policies that distorted utility service markets by concealing true costs.

Group representing wireless providers criticized Multi-Assn. Group (MAG) plan for reforming rural telephony regulation Mon. but gave slightly more favorable review to another plan proposed by Rural Task Force (RTF). In comments to FCC Mon., Competitive Universal Service Coalition (CUSC) said much of MAG plan failed to “satisfy the access charge and universal service guiding principles of competitive neutrality, economic efficiency and transparency.” CUSC said 2 parts of MAG were consistent with those principles -- proposed increase in subscriber line charges in rural areas and plan to make universal service funding portable. However, most parts of MAG proposal raise “policy pitfalls that the Commission should avoid,” CUSC said. On other hand, it said it “generally supports the RTF recommendations which will advance the goal of competitive neutrality and will prevent excessive growth in the size of the fund.” However, CUSC said some parts of RTF plan should be rejected, such as “safety value” adjustment that would permit increases in amount of funding in some study areas. FCC took comments on 2 plans separately but on same schedule.

Wyo. Senate committees cleared for floor action House-passed bill (HB-52) that would make wireless mobile phone providers eligible to receive subsidies from state universal service fund if they provided flat-rate local calling services. Customer bills would have to be reduced by amount of subsidy carrier received. PSC would determine wireless carrier eligibility. Senate committees also sent to floor House-passed sales tax bill (HB-259) that would authorize state Revenue Dept. to enter into regional tax collection compacts that would establish central merchant registry and sales tax administrative system to allow painless collection of sales taxes by out-of-state merchants that sold to Wyo. customers via Interinnet or catalogs.

Neb. bill addressing involvement of local govts. in fiber leasing cleared unicameral legislature’s committee process. Bill sent to floor (LB-827) still would allow local govts. to lease dark fiber to retail telecom carriers, but amendments would require that PSC: (1) Review all fiber leases to ensure rates are market-based. (2) Ban municipalities from using their own dark fiber for providing retail telecom service. (3) Direct that locality’s profits from dark fiber leasing be paid into new Neb. Internet Enhancement Fund to support high-speed Internet access for local govt. agencies statewide. Legislative committees also cleared amended version of universal service bill (LB-389), originally intended to make wireless carriers eligible for state universal service support. As sent to floor, bill now would leave it to PSC to determine which local service providers were eligible to receive state universal service subsidies, but all telecom carriers, including wireless, would be required to contribute to Neb. universal service fund.

FCC denied petition by Operator Communications (Oncor) for forbearance of rule requiring that contributions to federal universal service fund be based on carrier revenue from prior year. Oncor contended that basing contributions on prior-year revenue harmed carriers with declining revenue. It asked FCC to forbear from assessing revenues for years 1998-2000 and then reassess contribution based on actual revenue for those years. Commission said requested action would give unfair advantage to carriers with declining revenue. FCC Comr. Furchtgott-Roth issued statement agreeing with FCC’s denial but emphasizing that problem raised by Oncor was serious: “Because carriers contribute to the universal service fund based on the prior year’s revenues, those carriers whose revenues have declined find themselves paying a higher percentage of their current revenues… than do carriers with stable or increasing revenues.” He said end-user surcharges could be “promising solution.”

Rural telephony is ripe for investment as regulatory reform, consolidation and divestiture of rural exchanges by Bell companies change way telephone service is offered in small communities, panelists told representatives of investment companies attending conference in N.Y.C. sponsored by Legg Mason. “This a good time for you to come in,” NARUC Pres. Bob Rowe said: “There is tremendous growth. Rural America awaits your participation.” Panelists at all-day conference represented telcos, regulators, financial investors.

This year’s Commerce Committee communications picture became clearer Wed. in both houses of Congress. Senate Communications Subcommittee Chmn. Burns unveiled his technology agenda with emphasis on wireless and Internet issues. Counterpart House panel, whose Chmn. Tauzin (R-La.) has been explicit about his agenda for some time, finally passed its organizing resolutions appointing subcommittee members.

Parallel Minn. bills to carry out telecom reform plan of Gov. Jesse Ventura (I) have been introduced. Measures (HF-510/SF-554) would create state universal service fund to support high-cost service areas, Lifeline phone subsidies, state deaf relay service, $100 million revolving loan fund for deployment of advanced telecom services. New fund would be supported by 5% state excise tax on all retail telecom and cable services and “other multichannel video programming services” billed to Minn. customer. All retail rate changes would be presumed just and reasonable unless 5% of customers petitioned PUC for rate review. Legislation would deregulate rates for any telecom service where 75% of customers had competitive alternatives and deregulate telecom resale by hotels, motels and resorts except for requirement that providers notify customers of their rates and of any rate changes. For companies under alternative regulation plans approved before measure’s passage, deregulation provisions wouldn’t become effective until current plan expired. Bill also would require cost-based rate deaveraging for retail basic services, with resulting rates capped for next 2 years. Other provisions would streamline process for obtaining state telecom certificate but require all prepaid and competitive telecom providers to obtain certificate or license from PUC, and for prepaid providers to post bond against failure to deliver services. Bill also would allow municipalities to provide telecom services to their citizens on their own or through joint ventures where fewer than 50% of customers enjoyed actual competition. Measure would give PUC jurisdiction over telecom mergers, broad power to combat slamming and cramming, toughen minimum requirements for establishing extended local calling, and require landlords to allow access for competitive telecom and cable providers wanting to serve tenants. It would end cable franchising by municipalities, with franchises after Dec. 31, 2002, granted only by PUC, for up to 15 years. PUC could terminate franchise for cause, and would review all cable franchise transfers. Municipalities would get 5% franchise fee on gross receipts from locality. PUC could delegate franchise enforcement to municipalities. Cablers would have to give customers 30 days’ notice of changes in rates, channel positions or programing, provide emergency alert override capabilities and public access channels. Parallel bills are pending in House and Senate utilities committees.