With less than four months to go before an FCC-promised deadline for Universal Service Fund and intercarrier compensation regime reforms, industry appears to be divided on how to fix the system. The American Cable Association, for instance, said its “diverse and interested membership” meant the association “has had to navigate and balance strongly competing interests, while ensuring any policy proposals are in the public interest.” The FCC’s proposed rewrites at least “provide a good starting point to bring broadband to unserved areas, and, through refinements and targeted rebalancing, there is the potential to adopt reforms this year to reorient the High-Cost fund to improve efficiency and achieve universal broadband service,” ACA said in its comments. All comments were posted to dockets 10-90, 09-51, 07-135, 05-337, 01-92, 96-45 and 03-109.

The FCC should “immediately” tackle phantom traffic and traffic pumping but should provide “careful transitions” as it reforms the Universal Service Fund and intercarrier compensation regimes with “great care,” USTelecom said in comments posted to dockets 10-90, 09-51, 07-135, 05-337, 01-92, 96-45 and 03-109. “Until targeted universal service support provides sufficient explicit funding for networks in high-cost areas, any mandated rate reductions must be coupled with a reasonable opportunity for providers to replace the revenues lost … through a combination of increased retail rate flexibility and a supplement fund,” USTelecom said. USTelecom is leading talks to try to come up with an industry-wide reform. But the commission has made clear that it wants to move to orders on USF and intercarrier comp distribution by the end of the summer. “Intercarrier compensation reform must be accomplished by providing opportunities for carriers to replace lost revenues in order to allow the continuation of support for networks, particularly those in high-cost rural areas,” USTelecom said in Monday’s comments.

The North Carolina Utilities Commission should rule it has authority to require wireless carriers and VoIP providers to contribute to a proposed Universal Service Fund, AT&T North Carolina, the RLEC Coalition and the North Carolina Telephone Membership Corporations said. The commission has the authority to mandate such contributions and that “any fund that exempts these technologies will create a mechanism that is not technologically and competitively neutral and will impose a disproportionate burden on certain consumers, which is greater than necessary,” they said in a joint filing. The decision regarding whether certain parties can be legally required to participate in a USF that’s related to a comprehensive intrastate access revamp isn’t ripe for a decision and “must not be addressed at this time,” said the North Carolina Cable Telecom Association (NCCTA). Should the commission decide that the matter is “ripe,” NCCTA asked the commission to issue an order concluding that the agency doesn’t have the legal authority to establish a “revenue recovery” fund as commended by the Movants, the group said. Verizon agreed, saying “not only is this issue not ripe for review, but the requested ruling would violate North Carolina law, which exempts these categories of services from Commission regulation.” Even if the issue were ripe for decision, the commission doesn’t have the authority to require wireless carriers, VoIP providers and interexchange carriers to pay into a universal service fund, Verizon said. The state’s General Assembly has exempted wireless, VoIP and interexchange services from commission jurisdiction, the telco said. The commission initiated the proceeding in 2009 when Sprint Nextel petitioned to reduce intrastate access rates of ILECs, requesting that the commission reduce ILECs’ access rates to cost, or alternatively, to parity with the ILECs’ corresponding interstate access rates. Commission staff said in a filing that the issue of whether the commission has the authority to compel wireless carriers, interconnected VoIP providers, and IXCs to contribute to a state USF is ripe for adjudication. A decision by the commission on the issue would determine the parties to any further proceeding and frame and narrow the issues, the staff said.

The North Carolina Utilities Commission should rule it has authority to require wireless carriers and VoIP providers to contribute to a proposed Universal Service Fund, AT&T North Carolina, the RLEC Coalition and the North Carolina Telephone Membership Corporations said. The commission has the authority to mandate such contributions and that “any fund that exempts these technologies will create a mechanism that is not technologically and competitively neutral and will impose a disproportionate burden on certain consumers, which is greater than necessary,” they said in a joint filing. The decision regarding whether certain parties can be legally required to participate in a USF that’s related to a comprehensive intrastate access revamp isn’t ripe for a decision and “must not be addressed at this time,” said the North Carolina Cable Telecom Association (NCCTA). Should the commission decide that the matter is “ripe,” NCCTA asked the commission to issue an order concluding that the agency doesn’t have the legal authority to establish a “revenue recovery” fund as commended by the Movants, the group said. Verizon agreed, saying “not only is this issue not ripe for review, but the requested ruling would violate North Carolina law, which exempts these categories of services from Commission regulation.” Even if the issue were ripe for decision, the commission doesn’t have the authority to require wireless carriers, VoIP providers and interexchange carriers to pay into a universal service fund, Verizon said. The state’s General Assembly has exempted wireless, VoIP and interexchange services from commission jurisdiction, the telco said. The commission initiated the proceeding in 2009 when Sprint Nextel petitioned to reduce intrastate access rates of ILECs, requesting that the commission reduce ILECs’ access rates to cost, or alternatively, to parity with the ILECs’ corresponding interstate access rates. Commission staff said in a filing that the issue of whether the commission has the authority to compel wireless carriers, interconnected VoIP providers, and IXCs to contribute to a state USF is ripe for adjudication. A decision by the commission on the issue would determine the parties to any further proceeding and frame and narrow the issues, the staff said.

A broad state role is critical to modernize and streamline Universal Service and Intercarrier Compensation policies, state members of the Federal-State USF Joint Board told an FCC workshop Thursday. Speakers debated proposed changes in fund size.

The FCC took its first steps toward remaking the Universal Service Fund and the intercarrier compensation system Tuesday with a 5-0 vote in favor of a broadly worded rulemaking notice. The commission also voted to adopt a notice for a separate rulemaking that commission officials said will “streamline its data collection program” and eliminate “unneeded data collections that impose unnecessary burdens on filers.”

FCC Chairman Julius Genachowski is taking an aerial view of revamping universal service and intercarrier compensation in a new rulemaking notice. It takes up in general the necessity of subsidizing and deploying high-speed broadband but leaves contentious questions like the contribution factor for another day, commission and industry officials said. As expected, the FCC circulated a rulemaking notice late Tuesday for the commission meeting Feb. 8. The commission wants to use “market-driven, incentive based policies and increased accountability” to shift universal service money to “near term support for broadband deployment in unserved areas,” the agency said in a news release. It seeks to adopt measures to address intercarrier compensation (ICC) “arbitrage, as well as a long-term transition from current high-cost support and ICC mechanism to a single, fiscally responsible Connect America Fund,” the FCC said.

FCC Chairman Julius Genachowski is taking an aerial view of revamping universal service and intercarrier compensation in a new rulemaking notice. It takes up in general the necessity of subsidizing and deploying high-speed broadband but leaves contentious questions like the contribution factor for another day, commission and industry officials told us. As expected, the FCC circulated a rulemaking notice late Tuesday for the commission meeting Feb. 8. The commission said in a news release that it wants to use “market-driven, incentive based policies and increased accountability” to shift universal service money to “near term support for broadband deployment in unserved areas” and adopt “measures to address ICC arbitrage, as well as a long-term transition from current high-cost support and ICC mechanism to a single, fiscally responsible Connect America Fund.”

A GOP wave claimed longtime telecom heavyweight Rep. Rick Boucher, D-Va., and other Democrats in rural states, as Republicans seized control of the House Tuesday. The Republicans also won seats in the Senate, but the Democrats maintained power there. The GOP gain is seen as bad news for net neutrality supporters, while the loss of House Communications Subcommittee Chairman Boucher is a setback for rural telcos who supported his efforts to overhaul the Universal Service Fund.

Small carriers need money to build out their networks and the Corr Wireless order was wrong to not redirect surrendered funds back to other competitive eligible telecommunications carriers (CD Sept 7 p1), the Rural Telecommunications Group said in a filing at the FCC. In the order and notice of proposed rulemaking, the FCC declined to redistribute reclaimed high-cost support to other CETCs and proposed amending its Interim Cap Rule so that a state’s interim cap would be adjusted if a CETC relinquishes funds, as Verizon Wireless and Sprint Nextel did through merger commitments. In September, the commission ruled that the Universal Service Administrative Co. can’t modify the interim cap by deducting Verizon’s and Sprint’s contributions, but ruled that other eligible telecommunications carriers aren’t entitled to divvy up the left-over cash. The commission has since opened up to comments on how to handle surrendered USF funds (CD Sept 7 p6). “Existing wireless CETCs will use additional support to deploy advanced networks, cover unserved areas, and make available mobile broadband, ensuring that consumers in all regions of the nation have access to affordable services,” RTG said. “The Commission has recently acknowledged that while some areas lacking 3G coverage have some level of mobile voice service, other areas have no mobile wireless service at all.”