Rep. Jeff Landry, R-La., introduced a bill to neuter the FCC’s USF reform order. The Restore Effective Statistics to the Calculation of USF Expenditures (RESCUE) Act would ensure that the order on the commission’s Connect America Fund and high-cost USF support would no longer have force or effect and require the FCC to prepare a report on alternatives. The bill introduced Friday said the order will “invariably” lead to the closure of many small businesses, was made in direct conflict with the USF mandate, relies on unpredictable regression models and “unfairly manipulates” federal support for carriers. The bill’s a “significant step to correct the FCC’s deeply flawed method for limiting USF support for rural telecommunications providers,” NTCA CEO Shirley Bloomfield said in a news release. “This bill highlights three of the most significant shortcomings of the commission’s new statistical caps on universal service support: their disregard for statutory mandates requiring that federal universal service support be predictable; their alarming inaccuracy; and their retroactive nature that penalizes prior commitments made in good faith by job creators all over this country.”

Broadband ISPs excoriated the FCC for adopting unrealistic standards for its Section 706 report on the state of broadband deployment, in comments filed Thursday and Friday in docket 12-228. In response to a notice of inquiry asking what factors the commission should consider for its ninth report (http://xrl.us/bnqtzn), the telcos and cable companies aired some longstanding grievances about the commission’s findings the last three years that broadband was not being deployed on a “reasonable and timely fashion” (CD Aug 22 p1). States spoke of the need for the commission to tweak its USF rules to enable faster deployment of broadband, and interest groups expressed a need for a faster definition of broadband to enable more data-hungry applications.

The National Telecommunications Cooperative Association and 17 representatives of rural telcos met with FCC Commissioner Ajit Pai Monday to discuss the “serious problems created by the lack of transparency and predictability in the regression analysis-based caps” on USF support, an ex parte filing said (http://xrl.us/bnqogj). The potential for future caps is “exacerbating uncertainty in the marketplace,” they said. They also asked Pai to reconsider eliminating the Safety Net Additive, which amounts to a “flash cut” despite commission promises that there won’t be any, they said. “The Commission should permit those carriers who would have qualified for SNA specifically based upon investments in 2010 and 2011 to obtain such support as part of the phase-out of that program,” they said.

Smart meters and smart grids should be excluded from assessable services that are subject to USF contributions, the National Rural Electric Cooperative Association, Edison Electric Institute, and Utilities Telecom Council told FCC Wireline Bureau officials Tuesday, an ex parte filing said (http://xrl.us/bnqofz). “Smart meters and smart grids are not interstate telecommunications or interstate telecommunications services, nor would the public interest be served by subjecting smart meters and smart grids to USF contributions,” the groups said. “Moreover, it would conflict with the regulatory authority of other agencies and would be administratively infeasible to collect USF from utility customers.” Excluding smart meters and smart grids would promote marketplace innovation, energy efficiency, reliability and security, they said.

EchoStar, Dish and Hughes urged the FCC to finish its work on the structure of the Connect America Fund before expanding the base of services contributing to the universal service fund. Until that work is complete, it’s difficult for satellite broadband providers “to evaluate whether the new contribution regime is equitable and non-discriminatory as required by statute,” they said in a joint filing in docket 06-122 (http://xrl.us/bnqnsw). The USF contribution mechanism “must be updated to better reflect the marketplace,” the filing said. The CAF, if not structured properly, “could subsidize less-efficient terrestrial technologies to provide service to the same customers that satellite broadband providers are investing their own funds to serve.” It wouldn’t be competitively neutral or equitable to mandate that satellite broadband providers contribute to USF “if they are arbitrarily excluded from receiving support in areas where they are the most-efficient provider, and high-cost funding instead is channeled to subsidize their less-efficient competitors to extend service to areas where satellite service would be more efficient,” the companies added.

The FCC is unlikely to even start collecting data on special access rates until next year, Wireline Bureau Chief Julie Veach conceded at an FCBA lunch Wednesday. She said the data collection order is almost ready, but once it’s finalized by the commission it still faces review by the Office of Management and Budget. The OMB must vet it under the Paperwork Reduction Act.

The FCC needs to act on the application of Adak Eagle Enterprises and Windy City Cellular for a waiver of USF rules, CEO Larry Mayes said in a meeting with Priscilla Argeris, aide to Commissioner Jessica Rosenworcel. The companies serve remote Adak Island, Alaska. “WCC and AEE emphasized that it has been 163 days since the WCC Petition was filed and 114 days since the AEE Petition was filed,” the companies said in an ex parte filing (http://xrl.us/bnqbvm). “The companies have received no indication of when the Commission will move forward with a final decision on either Petition,” the filing said. “The companies have promptly responded to all requests for information, and have consistently offered to provide whatever additional information staff desires in order to expeditiously reach a decision.” Costs continue to mount, Mayes said. “The waiver process has been extremely expensive, onerous and frustrating for a small carrier that is now operating at a loss for both its wireless and wireline services while continuing to provide these services to remote Adak Island.” For WCC to continue providing wireless service to residents of Adak, it will need a two-year delay and five-year phased-in implementation of certain universal service rules, the filing said: “At a minimum,” WCC will need “funding sufficient to cover operations until Mobility Fund Phase II support is made available."

The FCC should use an annual USF access tariff allocation method based on total eligible recovery amounts rather than interstate base period revenue, the National Exchange Carrier Association told Wireline Bureau officials, an ex parte filing said (http://xrl.us/bnp6na). NECA intends to propose to continue the pooling process by reallocating billed switch access revenues to pooling companies with positive eligible recovery, it said.

In light of “ballooning federal USF charges,” the FCC should shift to a “fair, workable and future-proof” connections-based contribution mechanism, Google representatives told FCC Wireline Bureau officials and aides to commissioners Mignon Clyburn and Ajit Pai Wednesday, an ex parte filing said (http://xrl.us/bnp6k3). “A wide cross-section of commenters have described numerous benefits that could flow from a connections-based system, including greater equity, reduced administrative burdens, and greater simplicity,” Google wrote.

The FCC should make clear that Short Message Service revenue is exempt from the USF and “will remain so until all competing services (such as iMessage, Facebook messaging, and Google’s GChat, among others) are required to contribute, in order to prevent competitive imbalance,” MetroPCS officials said in a meeting with aides to Chairman Julius Genachowski and Commissioner Robert McDowell. MetroPCS also made other suggestions (http://xrl.us/bnprp4). The FCC should also “create a system where carriers can seek informal guidance on USF contribution matters, perhaps in a manner similar to the Internal Revenue Services’ private letter ruling process” and “extend the time for carriers to seek refunds on USF contribution overpayments and eliminate the asymmetry between a carrier’s ability to file for a refund and the Commission’s ability to recoup past underpayments, as the current system artificially encourages carriers to be more aggressive in their revenue classification positions,” the carrier said.