Adam Bender

Embarq and CenturyTel CEOs were in Washington to lobby acting FCC Chairman Michael Copps on their pending merger, said an ex parte filing. In a meeting Tuesday, Embarq’s Tom Gerke and CenturyTel’s Glen Post urged Copps to promptly sign off on the $11.6 billion deal, which has received all other required approvals. Copps still hasn’t circulated a draft order on the deal, a commission official said Wednesday. But in a recent research note, analysts at Stifel Nicolaus downplayed speculation (CD June 12 p6) that the FCC is waiting for the anticipated incoming Chairman Julius Genachowski. “With the merger review now at 190 days and [Copps'] oversight of the DTV transition successfully behind him, we would expect he will endeavor to wind up the review of this deal while he retains the chairman position, recognizing the risk that decisions that are held over for a new chairman could be held back by several weeks as the new leadership is installed,” they said.

The FCC should block the imposition of a 12.9 percent universal service fund contribution factor, the highest in history, David Bergmann, chair of the National Association of State Utility Consumer Advocates telecom committee, said in an interview Tuesday. The FCC, which released the proposed new factor Friday (CD June 16 p4), has until June 26 to act before the percentage request is deemed granted. The higher factor could mean $1-$2 hikes on some consumers’ phone bills, Bergmann said. In a filing last week at the FCC, NASUCA said the commission could reduce the factor by directing USAC to dip into $1 billion in unused USF E-rate funds, or nearly $6 billion in assets held for the federal fund. NASUCA believes that that’s a good temporary fix but that the FCC ultimately must revamp USF distribution to limit payouts to companies that don’t actually need subsidies, Bergmann said. Moving to a numbers-based system for USF contribution, which has been suggested by wireline companies big and small, isn’t the answer, he said. The existing system of basing contribution on carrier revenue works because it means people who use long distance service more also pay more to USF, he said. However, if the FCC wants to direct USF funds to broadband, NASUCA supports requiring all broadband providers to pay into USF, he said.

The FCC ordered all U.S. carriers to immediately suspend termination payments to Tonga Communications. In an order Monday granting a petition by AT&T, the International Bureau said the Tongan company acted anti-competitively by blocking AT&T and Verizon circuits to Tonga since Nov. 24 (CD June 4 p12). The U.S. companies had refused to pay 30 cents per minute for international calls to Tonga, a new rate set by the Tongan government that’s triple what the carriers agreed to pay.

The FCC extended by more than four months the deadline for people with hearing problems to register 10-digit phone numbers with Internet-based telecom relay service providers. In an order Monday, the FCC said TRS providers may continue to connect calls by unregistered users until Nov. 12. The original deadline, June 30, was criticized by many telecom relay providers (CD May 1 p5), which pointed to unresolved technical problems and low consumer awareness.

Carriers must pay 12.9 percent of their long-distance revenue to the Universal Service Fund in the third quarter, 1.6 percentage points more than this quarter. Big phone companies were quick to note that’s the highest figure in the fund’s history. But some small rural carriers disputed that the high factor shows that a thorough revamp of USF is needed.

U.S. Defense Secretary Robert Gates is still deciding whether to approve a new cybersecurity command under STRATCOM that would “lead, integrate, and better coordinate” day-to- day protection of defense networks, Deputy Secretary of Defense William Lynn told the Center for Strategic & International Studies at an event Monday. Gates is “evaluating proposals,” while “the joint staff is still working out the details of how this command would work and what the reporting relationships are,” Lynn said. No legislation is needed since the command would be a subordinate to the existing STRATCOM, he said. However, the commander of the program would have to be confirmed by the Senate, and Defense plans to “consult actively with Congress before we move forward,” he said. The new command “would not represent the militarization of cyberspace,” he said, because it would be responsible only for defense and military networks, he said. Civilian networks are the Homeland Security Department’s responsibility, he said. Protecting defense computer networks is a top priority for the Defense Department, Lynn said. DoD “has formally recognized cyberspace for what it is: a domain, similar to land, sea, air and space,” he said. However, the U.S. has room for improvement on cybersecurity, Lynn said. DoD is working to improve awareness, training and capabilities for dealing with cyberthreats, he said. Partnerships among the U.S. government, international governments, academia and the private sector will also be critical, Lynn said. “That in the end will be the only way that we'll meet the challenge.”

Congressional committees, agencies and the private sector will have to resolve differences in order to move forward on cybersecurity, industry and government officials said at an FCBA lunch Friday. Many Senate committees are pushing forward on bills, and it’s unclear when they'll have consensus on a single piece of legislation, said Deborah Parkinson, a Homeland Security and Governmental Affairs Committee staffer. However, a big push from the top should keep senators on track, she said.

Qwest urged the FCC not to impose a “complete when filed” rule as the commission seeks to revamp the forbearance process. The commission last month circulated a draft order on a forbearance overhaul (CD June 10 p11). Under a “complete when filed” rule, petitioners would have to include all supporting information in the initial petition or reset the time limit on forbearance proceedings. In meetings with aides to Commissioners Michael Copps and Jonathan Adelstein, Qwest said the rule would unfairly block petitioners “from providing additional data requested by the FCC, from responding to objections or arguments from third parties, or from updating the data if the petition takes 12-15 months to resolve.” But Qwest agreed that the forbearance process “could be improved.” It suggested that the FCC require third parties to produce data relevant to forbearance proceedings. “Petitioners may not have access to all such data but the information is nonetheless critical to make a determination of whether the petition satisfies the statutory criteria for forbearance,” it said. The “complete when filed” rule is receiving much discussion at the commission, said an attorney for competitive local exchange carriers. CLECs believe Qwest’s objections are fair, and would support a “nuanced” rule that would allow the petitioner to provide additional data in certain circumstances, the lawyer said.

With the FCC considering a fifth Internet policy principle, on nondiscrimination, a Comcast executive said the company has always been willing to discuss network neutrality and management issues with policymakers. Existing antitrust and FTC laws address many of the same issues, Executive Vice President David Cohen said in an interview. Last week, Verizon Executive Vice President Tom Tauke similarly told reporters (CD June 5 p1) he’s willing to talk, adding that the phone company could find a way to live with a nondiscrimination principle.

The FCC should set a goal for everyone in the U.S. to have broadband access by early 2014, major phone companies said late Monday as comments for the commission’s national plan continued arriving. There was wide agreement that overhauling the Universal Service Fund must be a high priority.