A dismal budget climate shouldn’t preclude support for broadband in tribal lands, Sen. Daniel Inouye, D-Hawaii, said at a Senate Commerce Committee hearing Tuesday. Inouye, the Appropriations Committee’s chairman, signaled that he would support increased FCC funding for that purpose. Advocates for Native American communities sought additional broadband funding, including through the Universal Service Fund and a new Native Nations Broadband Fund.
Federal Universal Service Fund
The FCC's Universal Service Fund (USF) was created by the Telecommunications Act of 1996 to fund programs designed to provide universal telecommunications access to all U.S. citizens. All telecommunications providers are required to contribute a percentage of their end-user revenues to the Fund, which the FCC allocates for four core programs: 1. Connect America Fund, which subsidizes telecom providers for the increased costs of offering services to customers in rural and remote areas 2. Lifeline, which directly subsidizes low-income households to help pay for the cost of phone and internet service 3. Rural Health Care, which subsidizes health care providers to offer broadband telehealth services that can connect rural patients and providers with specialists located farther away 4. E-Rate, which subsidizes rural and low-income schools and libraries for internet and telecommunications costs The Universal Service Administrative Company (USAC) administers the USF on behalf of the FCC, but requires Congressional approval for its actions. Many states also operate their own universal service funds, which operate independently from the federal program.
AT&T and USTelecom are trying to revive dormant efforts to create an industry-wide proposal on Universal Service Fund and intercarrier compensation regime reforms ahead of the FCC’s rigid schedule, multiple industry officials told us. Similar efforts have foundered in the past -- including a concerted attempt in 2006-07 -- but this time, “I think there is a possibility for a very broad industry coalition on this,” said USTelecom Vice President Jon Banks. “The FCC knows we're trying to do this,” he added. “Everybody -- ILECs, CLECs, cable wireless, rurals -- is trying to put together a path for the FCC to follow.”
AT&T will have a “steep climb” if it wants to take over T-Mobile, FCC Commissioner Michael Copps said. “You will remember in the Comcast merger that I said at the outset that it would have been a very steep climb for me. I ended up voting against it,” he said in a videotaped interview for C-SPAN’s The Communicators. “This is maybe even a steeper climb from the standpoint of a lot of power, a lot of influence given to one company in a world where two companies are going to control, like, 80 percent of the spectrum.” Copps worries about “what residue of competition will be left if the merger is approved,” what impact it will have on U.S. jobs and whether the bulk of the proceeds will flow into Europe’s telecom market, he said. T-Mobile’s parent is based in Germany.
A recent audit that criticized the FCC for not following federal guidelines on tracking public spending (CD March 28 p11) “may come up” when Chairman Julius Genachowski testifies before a House appropriations subcommittee, said a spokesman for Rep. Jo Ann Emerson, R-Mo. The chairman of the subcommittee on Financial Services and General Government “is aware of the situation,” her spokesman said. Managers at both the FCC and the Universal Service Administrative Co. were recently ordered to “update and reinforce” rules for entering expenses into the federal accounting system, after outside auditors labeled the commission’s accounting system “a significant deficiency."
Two similar Texas bills would define VoIP and prohibit state regulation for IP-enabled services and VoIP. SB-980 also seeks to exempt telecom companies from reporting requirements. It and SB-985 are sponsored by Republican Sen. John Carona.
CenturyLink and Qwest promised that if their proposed deal is approved by the FCC, the new company will offer discount broadband with download speeds of at least 12 Mbps to 60 percent of their customers within seven years of the transaction being completed. The merged company will also phase out accepting federal support for local switching by 2014, forgo federal safety net additive payments and come up with a plan to freeze interstate common line support “on a per-line basis” by the beginning of 2012, CenturyLink and Qwest said. Chairman Julius Genachowski’s staff has been working on an order approving the transaction for at least two weeks, FCC officials said. Qwest spokesman Tom McMahon said the letter is the product of meetings with “FCC staff and the chairman’s office over a number of days, and we believe they reflect what the FCC will find to be in the public interest.”
Sprint Nextel has lost its effort to stay an Iowa order requiring payment of intrastate access of interconnected VoIP. That may be the beginning of a series of battles over VoIP as the FCC moves ahead with its Universal Service Fund revamp, said state and industry officials. Meanwhile, the U.S. District Court for the Eastern District of Virginia recently ruled that by refusing to pay access charges for VoIP traffic, Sprint Virginia is in violation of 19 interconnection agreements with CenturyLink business units.
Even historically nonpartisan telecom issues have become political in an increasingly divided Congress, and it’s become increasingly difficult to pass substantive legislation, former Sen. Byron Dorgan, D-N.D., said in an interview Thursday with Communications Daily. The Commerce Committee alum urged the FCC to complete what Congress couldn’t: an overhaul of the Universal Service Fund. Dorgan blamed radio talk show hosts for politicizing the net neutrality debate, but he predicted demise for Republicans’ effort to overturn the FCC’s December order using the Congressional Review Act.
The FCC Thursday unanimously approved three items aimed at improving communications and radio service on tribal lands. Commissioners also heard testimony from tribal leaders about the state of communications in Indian country. The meeting came as the White House held a follow up meeting on last year’s Tribal Nations Summit.
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.