Senate Communications Subcommittee Chmn. Burns (R-Mont.) will unveil his Tech 7 agenda for 107th Congress in news conference Wed. Spokesman said 3 items are “brand spanking new,” but wouldn’t elaborate beyond telling us one was “an Internet issue,” one “a spectrum issue” (that spokesman said would be “an enormous undertaking) and “the last one is largely telephony.” Among returning issues, Burns will discuss 4 bills under heading of “high-speed Internet access": (1) Eliminating regulations on 2% telcos, which serve less than that proportion of nation’s access lines. (2) Removing interim caps on size of telephone universal service fund. (3) Allowing low-power TV stations to offer high- speed access. (4) Giving tax incentives for broadband deployment to underserved areas, as recently proposed again by Sen. Rockefeller (D-W.Va.). Other returning issues will include spam, privacy, e-govt.

Minn. House Regulated Industries Committee opened hearings Mon. on telecom reform plan proposed by Gov. Jesse Ventura (Ind.). Panel heard administration’s description of legislation that would be required to carry out his plan. Centerpiece of plan is imposition of state telecom excise tax to support new Minn. fund that would subsidize universal service in high-cost areas, support deployment of high-speed digital services, start $100 million revolving loan fund to encourage competitive local-carrier entry and service rollouts. Meanwhile, rural incumbent telco interests said they opposed Ventura’s plan, saying it would reduce their revenue from intrastate access charges with only partial offset from subsidies. Net effect, said Minn. Assn. for Rural Telecommunications, would be rural rate shock and stalled network improvements that would lead to “economic havoc” in rural communities. Rural telcos said they wanted reforms that would benefit rural and urban areas alike.

Bill introduced in N.J. Assembly effectively would prohibit Verizon from seeking deregulation of retail or wholesale rates and services until its local market share fell below 50%. Measure declares that Verizon’s loss of half its current market share would be proof that effective local competition existed in state. At that point, company would be allowed to seek rate and service deregulation. Legislation (AB-3122/S-1522) would act by tying variety of regulatory requirements to market share test, including requirement for cost-based Verizon rates for unbundled network elements and carrier access, performance standards for wholesale services to CLECs, mandatory service quality standards, caps on retail basic service rates. Bill also would require full 3rd party testing of Verizon operation support systems and 90-day monitored commercial operation study as soon as practical, new service performance standards for all local exchange providers within 9 months of enactment, review of state’s service quality standards within 12 months of enactment. Bill would establish state universal service fund for high-cost areas. Another new Assembly bill (A-3103) would allow Board of Public Utilities to suspend payment of dividend distributions by any operating unit of an energy or telecom utility if board found company was providing inadequate service or was guilty of other major rule violations. Measure would allow company to place dividend payments in escrow pending finding that it had remedied problem. Bill is similar to Ohio law that state regulators last year used against Ameritech because of company’s inadequate service. Both N.J. bills are before Assembly’s Telecom & Utilities Committee.

FCC asked for comment on Rural Task Force (RTF) proposal for reforming universal service program for rural telcos. Federal- State Joint Board forwarded plan to FCC Dec. 22 (CD Dec 26 p4). In proposed rulemaking issued Jan. 12, FCC said it sought comments on: (1) In general, whether RTF plan should be adopted “as a means of providing stability to rural carriers,” whether it provided “sufficient” universal service support. (2) Effect of plan on competition, how small ILECs and new entrants would be affected. (3) More specific implementation details such as proposed “safety valve mechanism” for providing additional support to rural carriers. For example, agency asked how that support should be distributed if rural carriers were eligible for more than proposed fund cap. (4) Implementation of RTF proposal to fix per-line support at a specific level in competitive study areas. (5) Implementation issues involving “safety net additive support.” Comments will be due 30 days after proposal is published in Federal Register, probably this week.

Since 9th U.S. Appeals Court, San Francisco, ruling classifying cable modem service as telecom service are “nonbinding dicta,” FCC is free to embrace Cox’s position that it’s pure information service devoid of telecom service component, Cox told Commission in reply comments in open access inquiry. Explaining recent decision to stop paying franchise fees on cable modem service to local govts. in 9th Circuit jurisdiction, Cox said court decision meant it had no choice but to suspend payment and collection of fees pending further clarification of issue by FCC. Recognizing its decision would have adverse financial impact on some local franchise authorities, company said it was in discussion with local govts. “in hopes of reaching a mutually satisfactory resolution.” Referring to criticism by National Assn. of Telecom Officers & Advisers (NATOA) that Cox was refusing to pay franchise fees mandated under Title 6 after declining to contribute to universal service fund and failing to secure necessary state or local certificates required under Sec. 253, company said it continued to pay cable franchise fees on all services that had been deemed Title 6 cable services. It would have continued to pay franchise fees on cable modem services in 9th Circuit jurisdiction states but for Portland decision, Cox said, pointing out it was paying such fees in other states. As for USTA’s charge that Cox hadn’t shown any intent to make payments to universal service fund despite concluding data service was telecom service, company said its telephone subsidiaries in 9th Circuit states paid “significant portion” of revenues into state and federal universal funds. “Far from ‘reasoning’ that its cable services are telecommunications services, as USTA claims,” Cox has “vigorously” and “repeatedly” disputed such suggestion, company said, and not until FCC determines that cable Internet service should be subject to Title 2 common carrier requirements can Cox comply with them.

If competition is subsidized it can become artificial, said White Paper released Thurs. by National Telecom Coop Assn. (NTCA). “The Cost of Competition” argues that competition doesn’t necessarily work in rural areas and it shouldn’t be forced. Bottom line is “permit competition to develop in rural areas but don’t subsidize it,” NTCA said in news release. Authored by economist Dale Lehman, White Paper questioned wisdom of making universal service funds available to competitive entrants, saying that might undermine viability of broadband deployment by incumbent rural LEC. There isn’t real strong business case for broadband deployment in rural areas in first place, report said. Solution might be to increase universal service fund so more money would be available to all carriers, Lehman concluded -- www.ntca.org.

Bills introduced in Neb. and Wyo. would make wireless carriers eligible for state universal service support. Neb. bill (LB-389) would give Neb. PSC limited jurisdiction over wireless phone carriers for universal service purposes. It would authorize PSC to require that wireless carriers contribute to state universal service fund and adopt rules under which wireless carriers could receive subsidies from state fund for local service to high-cost areas. Wyo. measure (HB-52) would make flat-rate wireless local service eligible for state universal service support. Bill would authorize Wyo. PSC to determine amount of money available for wireless universal service subsidies and adopt disbursement rules for payments to wireless carriers. Present law in both states denies commissions any authority over wireless services. Another new Neb. bill relating to universal service (LB-89) would annually earmark 1% of money in state universal service fund to subsidize broadband telecom services for county and municipal govt. agencies, starting in 2002.

FCC asked Fri. whether it should adopt access charge reform plan for rural carriers in its entirety, as proposed by Multi- Assn. Group (MAG), or whether certain parts should be adopted or incorporated into other proceedings. Plan was developed by coalition of groups representing rural telcos -- National Telephone Cooperative Assn., National Rural Telecom Assn., OPASTCO, USTA. Comments will be due 30 days from publication in Federal Register, with replies due 15 days later. Federal Register publication generally occurs within days after item is released by FCC.