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.”

Wireline and wireless carriers said the FCC should back away from the controversial finding in its most recent Section 706 report that the commission couldn’t conclude broadband is being deployed to all Americans in a “reasonable and timely” way (CD July 21 p1). But Free Press said the commission was on the right track when it approved its sixth broadband deployment report during the summer and the seventh report should have the same finding. CTIA said the sixth report put too much emphasis on the speed of connections, to the detriment of wireless.

A Universal Service Fund overhaul “would best be grounded on classification of broadband Internet connectivity as a telecommunications service” by the FCC, said the Media Access Project in a meeting last week with the Wireline Bureau. “Such a decision would minimize the chance of an anomalous and undesirable outcome in which the Commission plausibly might require contributions from broadband providers but have no authority to provide explicit support for broadband deployment and adoption.” MAP can’t yet endorse either revenue-based or numbers-based contribution to USF, because of the current legal uncertainty about the commission’s broadband authority, it said. Whatever method is chosen, the group said it shouldn’t “increase the relative contribution burden passed through to providers’ residential subscribers, nor promote more regressive assessments."

Imposing Universal Service Fund obligations on satellite providers that don’t receive USF support isn’t a “fair or rational way” to provide broadband to remote areas, a group of satellite companies said at a meeting with the Wireline Bureau’s Telecommunications Access Policy Division. Inmarsat, Iridium, Intelsat, SES World Skies, Spacenet and WildBlue representatives were at the meeting, an ex parte filing said. The satellite companies urged the bureau to “think broadly about alternative contribution methodologies,” though each would raise definition and classification questions, the filing said.

The FCC should formally deny states’ regulatory authority over entry, rates and other conditions of VoIP services, said a group of 12 Internet, telecom and VoIP companies, Thursday. Google, AT&T, Verizon, Skype, Microsoft and eight other companies and associations asked the FCC to “exercise caution” as it considered a petition filed by the Kansas and Nebraska commissions to require interconnected VoIP providers to pay state universal service fees.

The FCC should formally deny states’ regulatory authority over entry, rates and other conditions of VoIP services, said a group of 12 Internet, telecom and VoIP companies, Thursday. Google, AT&T, Verizon, Skype, Microsoft and eight other companies and associations asked the FCC to “exercise caution” as it considered a petition filed by the Kansas and Nebraska commissions to require interconnected VoIP providers to pay state universal service fees.