Converting the Universal Service Fund to broadband could cause the fund to balloon unless policymakers first reexamine “the purpose, design, and management” of the subsidy program, the GAO said in a report. The report dated Tuesday deals with opportunities to reduce duplication in government, save tax dollars and increase revenue. GAO recommended that Congress give USF increased attention since it falls outside of the annual appropriations process. In a speech Wednesday, Aspen Institute’s Blair Levin said “waste, fraud and abuse” are buzz words that don’t grasp the USF’s real problems.

The FCC should phase out Lifeline and Link-Up and “build on a new foundation” rather than tweak the systems, National Broadband Plan architect Blair Levin said Wednesday. There’s too much “dead weight loss” in the programs, because it’s not enough to make broadband available -- it has also to be adopted, he said. “How will the public react if they find out we're subsidizing other people so they can watch funny cat videos on YouTube?” Levin said at a Joint Center for Political and Economic Studies conference.

SAN JOSE, Calif. -- The complexity of content licensing deals is among factors slowing the rollout of TV Everywhere services from the pay-TV operators, panelists said at the OTTCON Wednesday. “If you're an HBO customer in a house that you own in Connecticut, but you're a Qwest customer at your ski lodge in Vail, are you going to be entitled to have HBO to Go in Vail even though” the local pay-TV operator isn’t getting a portion of that subscription fee, asked David Price, vice president of cable vendor Harmonic. “We have a boundary issue, which is really causing some consternation around the business modeling,” he said at the conference on over-the-top video.

Harbinger Capital Partners and Solus Alternative Asset Management are seeking to buy bankrupt S-band licensees TerreStar and DBSD for $2.6 billion, said bankruptcy court filings late Tuesday. The offer hasn’t been finalized and was made through a bidder letter Monday. The bid led to further delay of a bankruptcy court decision on whether to accept Dish Network’s $1 billion offer for DBSD (CD Feb 2 p8). The bankruptcy judge, expected to rule on Dish’s plan Wednesday, would have to approve either transaction, and the FCC probably would, too. Acquiring the companies would give Harbinger, which owns LightSquared, access to an additional 40 MHz of S-band spectrum as it continues to try to build out a wireless network in the L-band. LightSquared has recently run into GPS spectrum interference concerns over the use of its L-band spectrum.

AT&T isn’t entitled to “personal privacy” protections of the Freedom of Information Act, the U.S. Supreme Court ruled Tuesday. The company acknowledged in 2004 that it may have overbilled the FCC’s E-rate program that year. When CompTel tried to obtain records about the disbursements and payments, AT&T sued to block disclosure, saying FOIA allowed records to be withheld if they violate “personal privacy.” In an 8-0 vote, the justices disagreed. Justice Elana Kagan sat out the case.

House Commerce Committee Democrats said it’s too soon to vote on legislation to kill the FCC’s December net neutrality order. The Communications Subcommittee plans to mark up a Congressional Review Act joint resolution of disapproval at a business meeting Wednesday morning. But the committee and subcommittee’s ranking members -- California Democrats Henry Waxman and Anna Eshoo -- said they want a “legislative hearing” first. Meanwhile at the NAB State Leadership Conference, Committee Chairman Fred Upton, R-Mich., predicted quick House passage of the joint resolution.

FCC Commissioner Robert McDowell said broadcasters and pay-TV providers alike must negotiate retransmission consent deals in good faith and not deviate from that because of a forthcoming FCC rulemaking notice (CD March 1 p6) on retrans. Of the notice, set for a vote at Thursday’s agency meeting, he told an audience of broadcast executives visiting Washington to lobby on Capitol Hill for them and pay-TV rivals to “please don’t use this as an excuse” to not negotiate fairly. But most broadcasters and cable companies won’t wait for the FCC to change the dynamic, McDowell said Tuesday at an NAB conference. He also used FCC figures his office received to show that the agency is whittling down the number of indecency complaints against broadcasters, something he’s said should be reduced, although many license renewals are pending.

The FCC should proceed with caution as it considers the use of unmanned aerial vehicles (UAVs), balloon-mounted systems and other aerial base stations that could be quickly dispatched to disaster areas to keep communications alive when other systems falter, CTIA said. The Public Safety Bureau sought comment about low-altitude aerial telecommunications systems in a Jan. 28 public notice. Many of the responses were posted by the FCC Tuesday.

Rural carriers are gearing up to fight against the proposed cap on the Universal Service Fund and other objections they've found to the FCC’s rulemaking notice, association lobbyists said Tuesday. The cap, which would freeze the fund at 2010 levels, “has to be proven flawed,” Organization for the Promotion and Advancement of Small Telecom Companies Vice President Randy Tyree said on a conference call for members of several rural associations. It’s important that rural telcos and their supporters convince policy makers and legislators that the telcos are handling their USF cash well and that broadband will expand even further if the fund is allowed to expand, too, he said.

Dynamic spectrum sharing can go a long way toward addressing a pending U.S. spectrum crisis, Microsoft and Google told the FCC in separate comments on a notice of inquiry. CTIA encouraged the FCC to press forward, but warned against imposing “involuntary spectrum easements on commercial mobile spectrum.” The FCC approved an NOI on dynamic spectrum access (DSA) at its Nov. 30 meeting (CD Dec 1 p2).