Sprint Nextel and AT&T oppose a joint proposal put forward in the New York Public Service Commission’s proceeding on its state USF and intrastate access charges. The two major telcos have argued for months that intrastate access issues should be resolved in litigation, not as part of a multiparty negotiation. “There should be no further delays in reforming New York intrastate originating access rates,” Sprint said Friday in its comments to the PSC (http://xrl.us/bn9sqr), calling Verizon’s current proposal, introduced in November and attracting wide support, “an effort to delay reform further.” Parties who signed on to the November joint proposal include PSC staff, the New York State Department of State Utilities Intervention Unit, the Cable Telecom Association of New York, Verizon, Verizon Wireless, Frontier, Level 3, a group of smaller ILECs, Time Warner Cable, tw telecom and Windstream.

The November 2011 FCC USF order cost a rural Texas telco more than $500,000 in support, the company said. Hill Country Telephone Cooperative asked the Texas Public Utilities Commission for money from the state’s USF this fall to make up for the loss. “I've been in telecom for 34 years, and I find these days the most challenging of my career,” Hill Country General Manager Delbert Wilson told us. “This whole [FCC] transformation order has filled our industry with chaos and uncertainty."

The FCC mass-media agenda may be light in 2013, compared with work on USF and spectrum issues that will take up much of the eighth floor’s and many bureaus’ and offices’ attention, commission and industry officials predicted in interviews last week. They said Media Bureau staff may find the new year sharpens their focus on spectrum, with Chairman Julius Genachowski hoping to finish an order for the voluntary incentive auction by the end of next year. He would need rules for how to change the channels of stations that don’t agree to sell all or some of their frequencies.

Smart meters and smart grids should be excluded from assessable services that are subject to USF contributions, the National Rural Electric Cooperative Association, Edison Electric Institute, and Utilities Telecom Council told FCC Wireline Bureau officials Tuesday, an ex parte filing said (http://xrl.us/bnqofz). “Smart meters and smart grids are not interstate telecommunications or interstate telecommunications services, nor would the public interest be served by subjecting smart meters and smart grids to USF contributions,” the groups said. “Moreover, it would conflict with the regulatory authority of other agencies and would be administratively infeasible to collect USF from utility customers.” Excluding smart meters and smart grids would promote marketplace innovation, energy efficiency, reliability and security, they said.

Higher education is ready to work with the commission on a connections-based contribution system, or an adjusted revenues-based system, the nonprofit association Educause told FCC officials (http://xrl.us/bnodj9). Under a numbers-based regime, higher education would pay up to 20 times more in USF fees than under the current revenues-based system, Educause said. Without end-users from whom to recover these additional fees, the added funds would ultimately have to come from staff salaries, and reduced student services, the group said.

Recent news reports suggesting that the FCC may levy a new “tax” on Internet service are sparking a wave of negative reaction from both free market-oriented and public interest groups. Free Press has had longstanding concerns. On Tuesday, the free-market Heartland Institute joined in. But it remains unclear at this point how much support there is at the FCC for contribution reform or a move to broaden the program to place a fee on retail Internet access service.

Recent news reports suggesting that the FCC may levy a new “tax” on Internet service are sparking a wave of negative reaction from both free market-oriented and public interest groups. Free Press has had longstanding concerns. On Tuesday, the free-market Heartland Institute joined in. But it remains unclear at this point how much support there is at the FCC for contribution reform or a move to broaden the program to place a fee on retail Internet access service.

FCC Commissioner Robert McDowell will continue to push for USF contribution reform, though he still has an “open mind” about steps to take next, he said in an interview. McDowell has long championed taking on the contribution side of USF (CD Jan 9 p1). The FCC approved an order in October addressing the distribution side of USF and an order on the USF’s Lifeline program in January. In May, the FCC released a 182-page further notice of proposed rulemaking on contribution reform.

Comments filed on USF contribution reform show little agreement and point to the need for more discussion, Verizon and Verizon Wireless said in FCC reply comments. That conclusion was seconded by many companies and groups filing replies this week. Though many suggested short-term fixes, most agreed there is little consensus to move to a numbers-based or connections-based approach.

The FCC should broaden the range of companies paying into the USF so the fund will remain sustainable in the long term, said the NTCA, OPASTCO and Western Telecommunications Alliance in an FCC filing Monday. The groups filed in response to an FCC request for comment on its proposed rule on USF contribution reform (CD April 30 p4). The groups said they support assessing USF fees on text messaging, one-way VoIP calls, retail broadband Internet access and any enterprise communications service that utilizes a telecom component. The FCC should also adopt a “bright line” contributions rule that would determine service-specific designations, the groups said. The commission should continue to levy USF fees based on revenue, and should adopt contributions reform in stages, the groups said. “The Commission should first expeditiously resolve basic approaches and certain major issues that are ripe for action, and do so in the manner as discussed herein,” the groups said. “Following that, it should deal with more complex and less ripe issues at a later date in an ongoing further rulemaking and/or separate clarification orders as the consequences and unresolved issues of the initial reform become more apparent” (http://xrl.us/bnjnf2).