Federal Universal Service Fund

The FCC will likely get lengthy input on a vast array of controversial telecom issues, as it attempts to develop a national broadband plan, said industry officials we polled for reaction Thursday. In a 52-page notice of inquiry released Wednesday (CD April 9 p1), the FCC asks questions on universal service reform, open networks and nondiscrimination, the role of competition, how to define broadband, and several other big issues. The FCC is required under the American Recovery and Reinvestment Act to deliver its national broadband plan to Congress by Feb. 17.

The FCC opened a proceeding to develop a national broadband plan, at its meeting Wednesday. Commissioners unanimously approved a notice of inquiry on the plan, asking a laundry list of questions on how to effectively and efficiently spur broadband deployment and adoption. The FCC must deliver a plan to Congress by Feb. 17, under the American Recovery and Reinvestment Act.

Congress should make cybersecurity, not net neutrality, its main communications priority in the year ahead, James Cicconi, AT&T senior executive vice president, told reporters. He said he expects quick action from the FCC and Congress on a Universal Service Fund overhaul because of growing recognition that the current system is broken. And he endorsed Verizon’s position that the 700 MHz D-block should be given to public-safety agencies for immediate use rather than go through a second auction.

Regulations such as a la carte and net neutrality won’t help consumers and should be opposed, Senate Commerce Committee ranking member Kay Hutchison of Texas told the NCTA convention. “I want to hold back on regulations that are going to stifle innovation,” she said. “I am very skeptical about Congress being able to do it right.” Minority House Whip Eric Cantor of Virginia delivered a similar but broader message at an NCTA lunch: “You don’t need to over-regulate. You need smart regulation.”

There appeared to be little new in the more than 100 comments that flooded into the FCC this week about how to develop a comprehensive broadband strategy for rural parts of the U.S. The recommendations of the commission are expected to be given weight at NTIA and RUS as the agencies develop their respective broadband stimulus programs.

Broadband funds made available through the economic stimulus package and Universal Service Fund monies could play a big role in moving public safety answering points into a new world where they have to take a growing number of VoIP calls and otherwise modernize their systems, Greg Rohde, executive director of the E911 Institute said Wednesday. Rohde spoke at an FCC summit on the future of 911 and the problems local governments face trying to keep up in an IP era.

Broadband stimulus efforts may influence debates on the Universal Service Fund and pole-attachment fees, Medley Global Advisors said in a research note. As the FCC develops a national broadband strategy, required by the American Recovery Act, the commission probably will decide whether to expand the USF high-cost fund to cover broadband, Medley said. The effort could face obstacles, however, since it will come “on the heels of a large capital infusion of federal grant and loan money for broadband network investment entering the telecom market.” Meanwhile, the stimulus program could reinvigorate the debate over pole-attachment fees, because rural carriers “will need pole space and possibly more poles installed in rural areas to reach customers.” On the business side, stimulus should be a boon for broadband equipment makers, since the whole communications industry will need to buy gear for new network facilities, Medley said. That should translate into higher sales from Q2 through 2010, it said. Medley expects all sizes of broadband providers to apply for grants, it said. Even large incumbent phone companies will take part, to defend themselves against “cable applicants or municipal entities seeking grant money to build out their existing network footprint,” it said. The big telcos, and possibly large cable companies, “may decide to apply for grant money in certain areas and do so with a public sector partner” to increases their chances of getting an award, it said.

The FCC, states and cellular carriers should come to terms on early termination fees and remove that “distraction” for good, Nebraska Public Utility Commissioner Ann Boyle said on a panel Tuesday at NARUC’s winter meeting in Washington. The group seeks to draft consumer-protection standards for cellphone users.

FCC Commissioner Robert McDowell, the FCC’s lone Republican, weighed in Tuesday with additional recommendations for FCC reform, starting with a “thorough operational, financial and ethics audit” of the agency. McDowell acknowledged, as interim Chairman Michael Copps and Commissioner Jonathan Adelstein did Monday, the need for basic change now that former Chairman Kevin Martin has left the commission.

AT&T agreed to pay $10,080,600 in a consent decree to end FCC investigations into whether the company violated FCC rules on customer proprietary network information and recovery of universal service fund contributions from customers, the FCC said late Tuesday. AT&T also agreed to develop, within 60 calendar days, plans to ensure future compliance with FCC rules, the FCC said. The investigations related to complaints about AT&T’s CPNI opt-out mechanism, and a voluntary disclosure by AT&T that it had recovered federal USF contribution costs from end users in excess of permitted amounts. “While these were inadvertent errors, we regret that they occurred,” AT&T said in a statement. “To resolve these matters, we have entered into a consent decree, which includes implementing additional internal controls.”