Federal Universal Service Fund

Don’t dip into the Universal Service Fund, rural telecom associations wrote the Joint Select Committee on Deficit Reduction. The super committee is mandated to seek $1.5 trillion in savings. USF is federally mandated, but privately funded and maintained outside the U.S. Treasury, OPASTCO, the NTCA and the Western Telecom Alliance wrote Monday. “Legal precedents and guidance definitively confirm that the USF monies do not constitute ‘public monies’ that are received for the use of the United States, but rather are private funds that are merely derived and distributed at the discretion of federal statute,” they said. “Any taking of money from the Universal Service Fund would not result in an actual cut in the federal deficit,” said OPASTCO Vice President Randy Tyree. “This sort of taking would only result in job loss and inadequate communications services."

The FCC delayed the October meeting until Oct. 27 largely at the urging of staff working on universal service/intercarrier compensation, so they'd have more time to work out the details on a final order, agency officials said. Officials said they would prefer not to let a vote slip until Nov. 30, the Wednesday after Thanksgiving. Meanwhile, state members of the Federal/State USF Joint Board are not expected to make any additional recommendations before the October meeting date and have many continuing concerns about proposals now before the agency, especially the America’s Broadband Connectivity Plan.

The adoption of the America’s Broadband Connectivity Plan (ABC Plan) for Universal Service Fund and intercarrier compensation revamp would drive small rural carriers out of business, several state commissioners said during a FCBA briefing Monday. Meanwhile, all three revamp proposals ignore the role of wireless, industry officials said.

The FCC is likely to get the Universal Service Fund revamp done in 2011, panelists said during a Regulatory 2.0 workshop Thursday. Congress should give the FCC as much flexibility as possible as it considers legislation giving the commission authority for incentive auctions for broadcast and other spectrum, they said.

State regulators took aim at the industry-endorsed proposals for universal service and intercarrier compensation regime reforms, in reply comments on docket 10-90. Drawing the heaviest fire was the incumbent-backed America’s Broadband Connectivity plan. Regulators from Maine to Alaska blasted the proposals. State regulators have formed themselves into a task force hoping to convince the FCC that it’s too early to create uniform compensation rates (CD Sept 2 p7).

Comments continued to pour in Tuesday as the deadline for filings on industry-proposed universal service and intercarrier compensation regime changes expired. Incumbent telcos were mostly fighting a holding action, while a handful of rural carriers recommitted to fighting against the broader industry consensus. The six companies behind the so-called America’s Broadband Connectivity plan (CD Aug 1 p1) said in a statement that they had come up with a “detailed and workable proposal for fixing the outdated and unsustainable universal service and intercarrier compensation programs.” The companies -- AT&T, Verizon, Frontier, CenturyLink, Windstream and FairPoint -- added: “Adoption of the ABC Plan will lead to greater broadband deployment in rural America. The plan enjoys broad support on issues that have paralyzed the industry for years."

State regulators formed a NARUC task force hoping to convince the FCC to create financial incentives to states to lower their intercarrier compensation rates, Vermont regulator and NARUC telecom committee Chairman John Burke told us Thursday. The task force is chaired by New York Commissioner Maureen Harris, Burke said. Members of the task force hope to have recommendations before the October open meeting, when many expect the FCC to move to orders on universal service fund and intercarrier compensation regime reforms, Burke said. Some state regulators are hoping to keep the FCC from preempting state authority with the reforms, he said.

The adoption of the America’s Broadband Connectivity Plan (ABC Plan) for Universal Service Fund and intercarrier compensation revamp would “send us to the nearest federal court of appeals,” James Cawley, state chairman of the USF Federal/State Joint Board, told us. Most of the state commissions that filed with the FCC on the agreement oppose preemption of state role in determining USF eligibility. But Wisconsin regulators support some limited preemption of state authority and unified access charge rates.

Small and mid-sized wireless carriers, cable operators and competitive local exchange carriers all criticized parts of the America’s Broadband Connectivity (ABC) plan for making major changes to the Universal Service Fund and intercarrier compensation regimes. The plan, a compromise among major telecom carriers and rural local exchange carriers, is unlikely to be approved without some changes, said industry and FCC officials. The trick for the FCC will be keeping ILECs on board while accommodating other interests (CD Aug 25 p1). The FCC also asked for comment on a “complementary” filing by rural carriers as well as proposals by the Federal-State Joint Board on USF, also discussed in many of the comments.

Building a national wireless broadband network for public safety is the top telecom priority this fall for the Senate Commerce Committee, committee aides said. House Democratic and Republican staff, meanwhile, have continued discussions on spectrum legislation through the August recess, House officials said. Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., also is closely watching the FCC as it attempts to overhaul the Universal Service Fund and the committee may have a hearing on the AT&T/T-Mobile deal, his spokeswoman said. Senate Republicans, meanwhile, are poised to move their Congressional Review Act rebuke of the FCC’s net neutrality order.