A “pure” numbers-based USF contribution methodology is still the FCC’s “best option” to reform the contribution system, the Ad Hoc Telecommunications Users Committee told advisers to Commissioners Mignon Clyburn, Jessica Rosenworcel and Ajit Pai, an ex parte filing said (http://xrl.us/bntatu). It would let business users contribute their “fair share” while not unduly burdening consumers, and it would be easy to implement and monitor, Ad Hoc said. It said connections-based method is “viable” depending on the details of implementation: A broadened revenues-based system could improve the current problems but still has “inherent flaws” that “plague” the existing funding mechanism.

State regulators asked the FCC Friday to suspend an updated method of determining high-cost support from the USF (http://xrl.us/bnsr4j). The motion comes after months of debate and allegations from national and state entities that the year-old reform will hurt companies due to its unpredictability. “Clearly [the FCC model] is going to have the most impact on high-cost, rural-type carriers,” NARUC Telecom Committee Chair John Burke told us. It will impact states differently depending on how many such companies they have, he said. The FCC’s methodology of quantile regression analysis was introduced in its November USF/intercarrier compensation order, adjusted in April and determines more than 700 companies’ high-cost support as of this July. Other NARUC telecom committee members are “concerned,” Burke said.

The FCC granted a request from Border to Border Communications to correct its study area boundaries used in the regression analysis establishing USF reimbursement benchmarks for high-cost loop support, the Wireline Bureau said in an order (http://xrl.us/bnsmzo). The telco provided the updated wire center boundary information in July. The revised information reduces the company’s 90th percentile capital expenditure cost per loop (CPL) estimate by about $200 and its operating expenditure CPL estimate by $170. Border to Border has also submitted a broader petition for waiver of the high-cost support benchmarks generally (CD July 13 p16). Wednesday’s order correcting the study area boundaries “in no way prejudges the resolution of that pending petition for waiver,” the bureau said.

Over 83,000 new U.S. road miles in 31 states will get access to mobile Internet within 3 years, the FCC said Wednesday as it disclosed results of its Mobility Fund “Auction 901” to allocate $300 million toward closing gaps in mobile coverage. Carriers that received funding must complete projects within three years, and must make their networks available to other providers for roaming, the commission said. The Competitive Carriers Association praised the one-time “infusion” of support, but said the agency needs to make more funding available on an annual basis if it wants to achieve its universal service goals.

Small and mid-sized cable operators are watching how the FCC develops Connect America Fund Phase II before deciding whether to bid for federal funds to expand broadband networks to unserved rural areas, industry officials told us. They said the Phase II CAF cost model, on which the FCC held a workshop earlier this month (CD Sept 14 p3), is one element that could prompt cable operators to compete for the funding. But plans haven’t been firmed up, and none may come to fruition on the part of cable operators, industry officials said.

Telcos and carriers expressed strong support for a USTelecom petition for reconsideration of an FCC public notice that imposed various obligations on eligible telecommunications carriers that deal with tribal groups. The rules violate the Administrative Procedure Act (APA), the Paperwork Reduction Act (PRA), and the First Amendment, groups say. But tribal groups that commented strongly objected to the petition, calling it “misguided” and “deeply disappointing.” The public notice (http://xrl.us/bnro5r) offered “further guidance” on the tribal government engagement obligation provisions in the USF/intercarrier compensation order, and USTelecom took issue with its calls for “culturally sensitive” marketing and in-person meetings between telecom executives and tribal leaders.

Telcos and associations challenging the FCC’s USF/intercarrier compensation order filed a joint preliminary brief Monday presenting 18 issues for the 10th U.S. Circuit Court of Appeals to decide (http://xrl.us/bnrd3e). Questions include whether the FCC overstepped its authority by preempting the states’ authority to set intrastate rates, designate eligible telecom carriers and set service areas; requiring recipients of USF support to provide unregulated “information services”; and modifying or eliminating high-cost support mechanisms. Petitioners are also challenging the commission’s move to a “bill-and-keep” system of intercarrier compensation; a new obligation barring call blocking on VoIP providers; and the infringement of tribal sovereignty. Petitioners include CenturyLink, tw telecom, U.S. Cellular, National Association of Regulatory Utility Commissioners, National Association of State Utility Consumer Advocates, and several state public utilities commissions and rural telephone cooperatives.

LAS VEGAS -- Competitive Carriers Association officials warn that unless the FCC approves a mandate requiring that all devices built for lower 700 MHz spectrum work across the band, CCA members are unlikely to make much of a play in the upcoming incentive auction of broadcast spectrum. CCA officials cite what they say is a statistic that shows why an interoperability mandate is critical -- members of the group invested some $2 billion in the 700 MHz auction and most to date have been unable to roll out service.

Colorado Public Utilities Commission staff argued its case in the state’s ongoing telecom overhaul, in reply comments posted Friday (http://bit.ly/TqW3UE). The state shouldn’t tie its high-cost USF fund to effective competition rulings, staff argued. Colorado should also retain 911 obligations on a “technology neutral” basis, anticipating next-generation 911 systems, the staff said. The commission should continue to oversee service quality and receive consumer complaints -- and it should “update its service quality rules and require compliance on a technology neutral basis,” staff recommended. The PUC “has and should assert authority over Internet Protocol to Internet Protocol ('IP-to-IP') interconnection,” the comments said. It should skip the FCC debates over VoIP’s definition, and simply say VoIP is a technology and provide no definitions, staff said. Its comments frequently compared and contrasted the different industry positions on these questions in detailed charts. Staff submitted its reply comments well after the deadline due to travel delays (CD Sept 21 p10).

Supporting broadband without expanding the contribution base to include broadband, one-way VoIP, text messaging and enterprise services will lead to older households “shouldering an unfair and an inequitable share of USF assessments,” AARP representatives told FCC Wireline Bureau officials Friday (http://xrl.us/bnq8ma). The commission should assess all services that benefit from the USF program, AARP said.