BALTIMORE -- State regulators are confronting an increasingly tortured relationship with the FCC, creating a task force to address it Monday at the NARUC meeting. It consists of seven commissioners and is already official and active. Meanwhile, two NARUC resolutions directly address the fractured FCC relationship, as was expected (CD Nov 2 p12), and NARUC adopted both resolutions as policy Tuesday after they advanced through the telecom subcommittee and committee. One urges FCC referral to the Federal-State Joint Board on Universal Service as well as to the Federal-State Joint Board on Jurisdictional Separations on major decisions, and another addresses a pending Supreme Court case on the Chevron doctrine, looking at the risk of federal overreach of authority.

The FCC gave ILECs a “five year competitive head start” when it gave them an exclusive five-year right to Phase I Connect America Fund funds for broadband deployment, and an exclusive right of first refusal to obtain CAF funds in Phase II, CLECs and other challengers argued in briefs filed last week. They're challenging the FCC’s USF/intercarrier compensation order in the Denver-based 10th U.S. Circuit Court of Appeals. The commission’s “disparate treatment” of ILECs and CLECs in distribution of USF support violates its own “competitive neutrality” principle that support mechanisms “neither unfairly advantage nor disadvantage one provider over another,” they said.

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.

The chairman of the FCC, regardless of who won Tuesday’s election, would have had to act on some big telecom issues, from pending follow ups to USF orders to preparing for an incentive auction of broadcast spectrum, government and industry officials said. The difference likely will come on merger policy and on what other issues the next chairman decides to target, as well as the issues Julius Genachowski takes on in his remaining time as chairman, with a Democratic FCC more likely to impose regulation on at least a few fronts.

Change is on the way at the FCC, with Chairman Julius Genachowski widely expected to step down some time next year after nearly four years in the job. Change won’t be nearly as sweeping as what would have followed a Mitt Romney victory and the likely reversal of several key Obama administration policy calls, starting with 2010 net neutrality rules, government and industry officials told us Wednesday.

State and local advocates cautiously praised Tuesday election results and President Barack Obama’s victory. Local governments will face major considerations involving municipal broadband, USF reform and FirstNet, they told us in interviews. “We're pleased to see that team continue,” said Joanne Hovis, president of the National Association of Telecommunications Officers and Advisors board. She referred to officials in the Department of Commerce, Agriculture and at the White House. She praised American Recovery and Reinvestment Act initiatives and focus on broadband as “really successful” and a “credit” to the administration. NATOA doesn’t foresee another recovery bill but is happy with the administration’s overall direction of national communications policy, she said.

State utility commissioner elections saw widespread Republican victories Tuesday. There were 16 Republican wins, 10 featuring incumbents, and three Democratic wins. That includes three Montana Republicans, who maintain leads but weren’t formally declared as of Wednesday afternoon. Four Republicans ran unopposed, as did a Democrat.

The Texas Public Utility Commission is pleased with how its state USF fund has operated in the last year, according to a report submitted to the Texas Legislature Thursday. The USF fund is “fulfilling the fund’s purposes” and “the Commission’s rulemakings and contested cases being conducted regarding the Large and Small Company High Cost programs will result in continued decreased costs for those programs,” the PUC said (http://xrl.us/bnxn8e). The Thursday report discusses the 11 programs the fund supports as well as talks about the process of determination eligible telecom providers and gives a history surrounding the fund, it said. A 2011 Texas Senate bill requires the PUC to evaluate the USF fund, it said. Programs that receive funding include Texas’s high-cost universal service initiative for big companies as well as for small and rural ILECs, Lifeline, Relay Texas and IntraLATA. Its disbursement in fiscal year 2011 was $426 million, a decline over the past half decade, according to a chart in the report. In fiscal year 2011, “disbursements from the Large Company Area High Cost Program accounted for 63 percent of the fund’s total disbursements,” the report said. “Disbursements from the Small Company Area High Cost Program to providers serving the small ILEC study areas accounted for 19 percent of the fund’s total.” The nine remaining programs comprise 17 percent, or $77 million, of disbursements, it said.

Nov. 5 Practising Law Institute “talk like a geek” webcast, 9 a.m. -- http://xrl.us/bnudjr

New York is moving forward with its state USF talks in the form of litigation. The New York State Public Service Commission adopted its $17 million fund in August and tried to move forward with Phase III talks in September, but ran into stumbling blocks in the weeks since (CD Oct 18 p11). Phase III issues include intrastate access charges and the New York Targeted Accessibility Fund, the PSC has said. Administrative Law Judge Howard Jack scheduled a Nov. 27 procedural conference for Phase III litigation, according to a Thursday ruling (http://xrl.us/bnxf3r). Several stakeholders had argued in a joint letter they could discuss and resolve pending issues but AT&T disagreed and demanded litigation in late October, the ruling said. There’s no consensus because AT&T and Sprint are “the two biggest proponents of access reform,” as the telco told Jack. “I believe the interests expressed by both the Signatories and AT&T can be accommodated,” he said. “It is not clear right now, in advance of the procedural conference, what specific issues and procedural steps Phase III litigation will entail, including the extent to which evidentiary hearings might be included.” All parties are free to negotiate toward a joint proposal on Phase III issues in the coming weeks, the ruling said.