The state of Washington has moved House Bill 1971 forward from the House Finance Committee to Appropriations and received its first reading on Wednesday, substituting in a new version of the bill. The proposed legislation received a lengthy hearing, with a great show of support, in mid-March and would overhaul the way the state taxes telecom and creates a state USF (CD March 20 p8). The substitute (http://bit.ly/12jCul9) makes several clarifications on what certain terms mean and revises language in several instances, such as specifying how retailers must collect 911 excise taxes on prepaid wireless services.

The FCC Wireline Bureau has chosen a “greenfield” model for Phase II of the Connect America Fund, said industry and agency officials. A greenfield approach estimates the full cost of building and operating a network from scratch. The ABC Coalition, consisting of USTelecom and several ILECs, supports the greenfield approach. The American Cable Association, a primary proponent of the competing brownfield model (CD Jan 16 p3), criticized the choice of a greenfield model as a “wasteful” move that will hurt consumers and small cable operators.

The 2011 FCC USF order has spurred multiple Texas telcos to seek recovery of millions of dollars worth of lost federal support money from the state’s USF. Valley Telephone Cooperative petitioned the Texas PUC on Friday to allow it to hike rates and recover $613,903.69 from the Texas USF, citing the destructive impact of FCC reform. Valley is the latest among many companies that want state USF money for that reason. Valley and other telcos have asked to recover a total of more than $2.6 million in federal support losses from the Texas USF fund, with more companies potentially following suit despite some opposition.

Commenters differed on the proper speed proxy the FCC should use to ensure that recipients of Connect America Fund Phase II money provide broadband service of at least 4 Mbps downstream and 1 Mbps upstream. Commenters in WC docket 10-90 were responding to a Wireline Bureau request on how best to identify unserved areas eligible for CAF Phase II funding, and on how to measure broadband speed, latency and other metrics required of funding recipients.

Kansas lawmakers continued to advance a telecom deregulation bill last week. The Senate approved 36-4 an amended version of House Bill 2201 and returned it to the House, which had previously approved it 118-1. One proposed amendment was accepted, and one was canceled, but neither substantively proposed to change the industry-backed bill. The bill proposes the creation of a Telecom Study Committee, a request to the Kansas Corporation Commission to report on IP-to-IP interconnection issues, a change to how the state USF functions and the removal of certain carrier-of-last-resort obligations, among others, according to the bill’s latest supplemental note (http://bit.ly/YO3b0z).

The push to keep states from regulating Internet Protocol-enabled services goes strong in 2013. Legislators in more than half a dozen states introduced such IP bills this year. More than two dozen states had already passed laws before 2013 began, California prominent among them (CD Oct 2 p7). The IP transition’s urgency escalated when AT&T introduced an FCC petition urging transition trials last November, and it’s widely accepted that much voice traffic will shift to VoIP and IP-enabled frameworks in the next decade amid these transforming state roles. Proponents and observers told us these state laws will keep appearing, while NASUCA and AARP fear they'll create public safety and affordability risks.

The FCC will release a public notice seeking data on pole attachment costs and their impact on the deployment of super fast networks, Chairman Julius Genachowski said at the agency’s first gigabit community broadband workshop Wednesday. The six-hour workshop brought together industry executives, activists and officials to look at the fast networks out there today and see how they're used and what could be done to speed the deployment of more. “We need more gigabit communities in the United States,” Genachowski said. “We need to have a critical mass of a one-gigabit market to spur ultra high speed innovation here in the United States.” He counted off the fast networks developing in the U.S. -- “We're seeing communities and we're seeing companies” -- and suggested more are necessary to compete globally against countries like South Korea and Japan: “If we build super fast networks, the innovators will come."

House Commerce Committee members said they plan a hearing to examine the FCC’s Lifeline program on April 25, according to a letter sent Tuesday. The letter, sent to FCC Chairman Julius Genachowski, asked whether the USF program should be frozen until additional reforms can be implemented to reduce waste and abuse in the program. The letter also asked whether the FCC should reconsider providing waivers for carriers to receive funding “even if they deploy no facilities of their own,” and if the Lifeline program should be put on a budget or capped. The letter was signed by Commerce Committee Chairman Fred Upton, R-Mich.; Communications Subcommittee Chairman Greg Walden, R-Ore.; Joe Barton, R-Texas; Bob Latta, R-Ohio; Marsha Blackburn, R-Tenn.; and Tim Murphy, R-Pa. Witnesses for the hearing were not announced.

Congress voted 46-53 against an amendment aimed at curbing USF subsidies for wireless service during Friday’s Senate budget resolution vote (S. Con. Res. 8). The amendment, proposed by Sen. David Vitter, R-La., would have prohibited subsidizing commercial mobile service with USF funds, without raising new revenue.

Otelco, a wireline provider for several states, filed for Chapter 11 bankruptcy protection in Delaware Sunday, in order to restructure. The company, which is incorporated in Delaware, has $168.5 million in assets and $310.06 million in total debt, according to documents filed at the Wilmington, Del., bankruptcy court. Otelco operates 11 RLECs throughout Alabama, Maine, Massachusetts, Missouri, Vermont and West Virginia as well as two CLECs providing telecom service in Maine, New Hampshire and Massachusetts and is “the sole wireline telephone services provider for many of the rural communities it serves,” the documents said.