The Internet voice industry is divided on a popular proposal to base universal service fund contributions by carriers on phone number count rather than interstate revenue. Vonage and other interconnected VoIP carriers support a numbers approach as making the fund technology- neutral. Others say a numbers world would force overhaul of business models at Google’s GrandCentral and other enhanced service providers. That shouldn’t be, Feature Group IP CEO Lowell Feldman said in an interview. Ten- digit phone numbers represent “1970 technology, not 2008 technology,” he said. “The numbers scheme is really a sleight of hand to try to force the industry to always use numbers.”

FCC action on early termination fees (ETFs) is expected early in 2008, with the commission expected to refocus at least in part on telecommunications issues following a major fight over media consolidation. The Universal Service Fund, 700 MHz auction, future use of the broadcast white spaces, and 800 MHz rebanding also are expected to get agency attention.

The Federal-State Joint Board on Universal Service issued long-awaited recommendations for reforming the Universal Service Fund late Tuesday that generally followed an outline released in September. The goal of the wide- ranging group of proposals is to reform the high-cost portion of the USF, which subsidizes service in rural areas. The FCC has a year to act on the recommendations.

The Federal-State Joint Board on Universal Service issued long-awaited recommendations for reforming the Universal Service Fund late Tuesday that generally followed an outline released in September. The goal of the wide- ranging group of proposals is to reform the high-cost portion of the USF, which subsidizes service in rural areas. The FCC has a year to act on the recommendations.

Seeking Universal Service Fund reform they can live with, telecom companies have been meeting in small groups for months trying to agree on proposals for the Federal-State Joint Board on Universal Service. As the joint board’s self- imposed Nov. 1 deadline nears, meeting participants have become more closed-mouthed about progress.

Colleges’ Universal Service Fund (USF) costs will rise “astronomically” if the FCC moves fund contributions from a revenue- to a numbers-based approach, universities and a higher education group told Communications Daily. Colleges could have to choose between removing dormitory phones and paying the drastically higher fees, they said. Either way, there will be “negative financial, technical and social impact,” said Jeri Semer, executive director of the Association for Communications Technology Professionals in Higher Education (ACUTA). FCC chairman Kevin Martin last May said he has “long favored” a numbers-based model and plans to propose to reform USF contribution this fall (CD May 15 p1).

Arguments against capping universal service subsidies to competitive carriers are based on “short-term self interest rather than long-term public interest,” OPASTCO told the FCC. “Excessive growth in the High-Cost program that is threatening its sustainability is attributable solely to competitive ETCs,” said OPASTCO in reply comments on the cap proposal. On the other hand, extending the interim cap to all rural telecom companies would “seriously threaten” wireline rural carriers, OPASTCO said. “At greatest risk would be continued service to subscribers in the most remote and highest-cost regions that may not have other reliable service options,” said the group, which represents wireline LECs.

N.Y. residents would pay $150 million more into the Universal Service Fund (USF) if the contributions system is changed as proposed, consumer groups said Tues. Contributions are made by telecom providers, which charge consumers for them. Plans to shift from a revenue-based payment to a per-connection charge, such as one based on phone numbers, would boost N.Y.’s share from $407 million to $555 million, said the League of United Latin American Citizens, N.Y. State Alliance for Retired Americans and the Keep Universal Service Fund Fair Coalition. The connections- based proposal would “take a bad situation and make it even worse” because New Yorkers already pay more into the fund than they get back, the groups said in a press teleconference. Accusing “big phone companies” of pushing the connections system, the groups said the FCC shouldn’t move from “a consumer-friendly, pay-for-what-you-use tax on long-distance to a regressive per-connection charge that would be imposed on every phone line whether or not consumers made any long distance calls at all.”

Rep. Boucher (D-Va.) asked OPASTCO to promote his Universal Service Fund (USF) bill (HR-2054) on the Hill Wed. at the group’s legislative conference. The measure would revamp the USF program by widening the contribution base to include all those providing network connections, and expand services to pay for broadband. “We are in a hypercompetitive global market,” Boucher told OPASTCO members, stressing the importance of getting faster broadband deployment throughout the country, especially in rural areas. USF is under stress “today as never before,” Boucher said, adding that he and the bill’s chief co-sponsor, Rep. Terry (R-Neb.), have worked 3 years on “comprehensive” legislation to deal with problems in the system. Boucher’s bill has 11 co-sponsors, all but one Republicans. It has attracted support from AT&T, Qwest, Embarq and Alltel and NTCA, Boucher said, and the challenge is to encourage trade groups that like the bill to urge other lawmakers to sign up. “This bill will not be passed into law without your personal assistance,” Boucher told OPASTCO members. OPASTCO Pres. John Rose said the group applauds the bill but thinks it wise to pursue regulatory as well as legislative fixes.

FCC Chmn. Kevin Martin plans to proceed as soon as the fall on a proposal to change how telecom providers contribute to the Universal Service Fund, he said Mon. after a speech. Martin told reporters he is waiting for a U.S. Appeals Court, D.C., decision on a related universal service issue before teeing up a proposal to replace the revenue-based contribution system with one relying on phone numbers.