The 10th U.S. Circuit Court of Appeals will hear challenges to the FCC’s Universal Service Fund order, it was announced late Wednesday. At least 13 challenges have been filed in various circuits; the 10th in Denver was picked in the judicial lottery to take the case. But even as the case was winding its way through the system, FCC officials on Thursday warned lawyers and lobbyists for wireless companies that the commission was hoping to launch a further rulemaking on reverse auctions as early as next month, with a goal of having the first auctions by the end of Q3 2012.

The telecom world largely responded cautiously as the FCC on Thursday adopted its Universal Service Fund and intercarrier compensation regime changes. But telecom officials and observers predicted lawsuits would begin pouring in after the 400-plus page order is published and digested. Meanwhile, the order itself hadn’t been finished, an FCC official told us. Staff were continuing to incorporate edits agreed upon by the commissioners late in the process but before the vote, and the order won’t be ready for release until at least the end of next week, the official said. Less-substantive changes are also still being made.

FCC Chairman Julius Genachowski offered reassurance Thursday, in a speech at FCC headquarters as he prepared to circulate the FCC’s version of Universal Service Fund and intercarrier comp overhaul, most likely late Thursday evening. Genachowski’s speech was short on details on how his proposal differs from plans already before the commission, particularly the ABC plan. Instead, he reassured consumers they have nothing to fear and that the proposed reforms will, in the long run, drive down the size of their monthly phone bills.

Cable advocates have taken their fight against the right-of-first-refusal provisions in America’s Broadband Connectivity plan to Capitol Hill, hoping to keep Congress from supporting the incumbent-backed plan, NCTA Executive Vice President James Assey told us Wednesday. President Michael Powell and Comcast/NBC Universal Washington President Kyle McSlarrow have been pressing their cases on the Hill. The goal is to keep legislators from signing incumbent-circulated letters to the FCC supporting the ABC plan, he said.

A group of consumer advocates and public officials urged the FCC to reject the incumbent-backed America’s Broadband Connectivity plan and the rural “consensus framework” for universal service reform. In a joint letter posted as an ex parte notice to docket 10-90 and organized by the National Consumer Law Center and the Utility Reform Network, the advocates said industry’s reform proposals should be “flatly rejected” (http://xrl.us/bmdmo8).

The House sponsors of last year’s Universal Service Fund overhaul bill support the FCC acting on the industry USF agreement brokered by USTelecom. Rep. Lee Terry, R-Neb., no longer plans to move USF legislation, aide Brad Schweer told us Wednesday. He said that Terry “will now be encouraging the FCC to produce details that reflect suggestions” proposed by the industry group. Terry’s former co-sponsor Rick Boucher agreed that the commission should move forward on its own.

The Universal Service Fund “is not materially increased by requiring very small companies to contribute,” the American Association of Paging Carriers said in a telephone conference with Wireline Bureau staff. The association “pointed out that the exemption level of $10,000 has remained unchanged since the USF was implemented as a result of the Telecommunications Act of 1996,” according to an ex parte released Thursday in docket 09-229. “AAPC further noted that some of its members include small companies with paging service revenues of less than $1 million,” the group said. “Using the 12% ’safe harbor’ interstate allocation allowed by the Commission, the contribution factor of 5.9% for the first quarter of 2000 exempted carriers from contributing to USF until they generated approximately $1.425 million in total service revenues. However, using the ’safe harbor’ allocation during the current quarter, the contribution factor of 14.4% requires contributions from carriers with as little as $590,000 in total service revenues. Similarly, the highest contribution factor to date (15.5%, during the first quarter of 2011) required carriers using the ’safe harbor’ allocation to contribute to USF with as little as $538,000 in total service revenues."

A handful of rural rate-of-return telco executives took aim at the USTelecom-led efforts to create cost models for Universal Service Fund and intercarrier compensation regime reforms, an ex parte notice released Monday showed. USTelecom had brought in analyst CostQuest to create cost models as it continues to lead industry-wide talks on wholesale reform. CostQuest executives have been sitting in on ex parte meetings since at least May to discuss some of their findings (CD May 24 p14).

The FCC shouldn’t get bogged down in questions of how to classify text messaging for Universal Service Fund contributions or any other piecemeal approach to universal service contribution reform, USTelecom warned the commission in comments posted to docket 06-122 and released Tuesday. “Universal service contribution issues need to be addressed in a comprehensive proceeding, not through ad hoc proceedings, such as those for which the Commission requests comment here,” USTelecom executives David Cohen and Jonathan Banks wrote in their comments.

Small carriers, wireline and wireless, opposed to reverse auctions as part of Universal Service Fund overhaul could be fighting a losing battle in an effort to reverse a move in that direction by the commission. FCC Chairman Julius Genachowski appears to have at least three votes in favor of a controversial reverse auction plan, FCC and industry officials said.