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.

Along with a cap on universal service subsidies (CD May 2 p1), the recommendations from the Federal-State Joint Board on Universal Service late Tues. could hit wireless carriers with a 2nd reduction in their payments. The Joint Board urged the FCC to “consider abandoning or modifying the so- called identical support… rule.” The rule bases competitive carrier funding on the same per-line support given to the rural ILEC operating in the same area.

A hefty increase in the amount of money telecom carriers, and ultimately consumers, must contribute to the Universal Service Fund beginning in April has triggered renewed calls by industry groups for USF reform. The FCC late Thurs. raised the so-called “contribution factor” -- the proportion of interstate and international revenue that telecom carriers must donate to the fund -- to 11.7% from 9.7% for the 2nd quarter, starting in April. The industry money goes to USF subsidies.

Mass. consumers will benefit if the FCC shifts universal service contributions from a revenue base to phone numbers, a pro-numbers group said Fri., challenging predictions of harm to consumers by the Mass. Consumer Coalition and the Keep USF Fair Coalition (CD March 9 p10). Opponents used “incorrect data and ‘funny math,'” said the USF by the Numbers Coalition. The opposing group “exaggerates how high numbers- based assessments would be” and overstates what Mass. customers now contribute to USF, said USF by the Numbers, composed of AT&T, CTIA, NCTA, USTelecom, Verizon, VON Coalition, DSL.Net, GCI and IDT Corp.

Mass. consumers stand to lose $158 million a year if proposals to shift federal universal service contributions from a revenue base to a numbers or connections base are adopted, according to the Mass. Consumer Coalition and the Keep USF Fair Coalition. The groups, at a news conference in Boston, said the shift would hurt most the rural, minority, low-income and elderly phone customers who make few long distance calls. They said universal service contributions from Mass. would jump to $266 million a year on a connection- based assessment, from $108 million under the current system based on long distance revenues, assuming a fee of $1.50 a connection. The groups said those who use little long distance would suffer mammoth increases in their USF contributions, with the result that those who don’t make long distance calls will be subsidizing those who use lots of long distance.

More than a third of the country’s state regulators want the FCC to alter or kill the Missoula Plan for intercarrier compensation reform, according to comments filed late Wed. Most concerned voices speak for one of 2 types of states: (1) “Early adopters” that already implemented access charge reforms, resulting in higher consumer costs -- and don’t want to do so again. (2) “Payer” states where carriers put more into the universal service fund than they get back. They tend to be urban states with fewer rural LECs and see more payouts as unfair.

Some industry groups are using an FCC notice of proposed rulemaking on USF contribution methodology to argue for moving to a number-based method of calculating payments -- a question the FCC never raised, NASUCA claimed. The VON Coalition, CTIA and other groups said tweaks to current methodology will fall far short of needed reform.

Deregulating the Bells’ broadband transmission services would hurt rural telephone companies that rely on them for Internet backbone service, the National Telecom Co-op Assn. told the FCC in comments filed Thurs. The Bells are the only Internet backbone providers available to rural telephone companies in many areas, NTCA said: “NTCA is concerned for its members who will rely on BellSouth and Qwest for access to the IP backbone.”

Deregulating the Bells broadband transmission services would hurt rural telephone companies that rely on them for Internet backbone service, the National Telecom Co-op Assn., told the FCC in comments filed Thurs. The Bells are the only Internet backbone providers available to rural telephone companies in many areas, NTCA said: “NTCA is concerned for its members who will rely on BellSouth and Qwest for access to the IP backbone.”

More interim changes to the Universal Service Fund (USF) contributions system simply will delay reform, VoIP providers and others told the FCC in comments filed Wed. The FCC in a June order making interim fixes (CD June 22 p1), asked if more temporary changes were due. Commenters told the FCC not to waste time on interim fixes but to replace the revenue- based system.