FCC Chairman Julius Genachowski told lawmakers in a letter published last week that while it’s important to “keep moving” on USF and intercarrier compensation reform, the commission would work closely with affected carriers to ensure that residents in rural areas receive adequate voice and broadband services (http://xrl.us/bnnwcg). Genachowski responded to letters from nearly 50 House and Senate members that urged the commission not to undermine the network investments of rural carriers with its regulatory reforms. The FCC’s revised methodology “takes recent investment into consideration; it accounts for several additional drivers of cost in comparing spending between carriers; it extends the transition period to give carriers time to adjust; and it provides a streamlined process to address any concerns about the accuracy of carriers’ data,” Genachowski wrote.

The New Mexico Public Regulation Commission isn’t prepared to discuss its findings against Sacred Wind Communications (CD June 28 p13), commissioners wrote in an Aug. 28 letter to State Senator Timothy Keller (D) released Wednesday. The commission had denied Sacred Wind state USF funds in a lengthy proceeding, and Keller had questioned the process. “You might not be aware that Sacred Wind has appealed the case to the Supreme Court,” the PRC said. “Accordingly, it would not be appropriate for us to discuss the merits of the case.” The commissioners noted they had removed a prior finding in late July, which had asserted that Sacred Wind is not an incumbent rural carrier. The PRC also said it wished the proceeding had taken fewer than 20 months but partially blamed Sacred Wind: “At each point in the process, Sacred Wind and its opponents contested and litigated every conceivable issue and used every available procedural device to present their positions.” Sacred Wind CEO John Badal declined to comment for the moment in an exchange late Thursday, citing the possibility of meeting with commissioners next week to discuss matters.

The record before the FCC “reflects a broad consensus in favor of taking measured steps to broaden the [USF] contribution base and to reduce uncertainty and eliminate competitive distortions,” representatives of the Rural Cellular Association said in a meeting with an aide to Commissioner Ajit Pai. “In particular, we noted that most parties support extending contribution obligations (or clarifying existing obligations) for enterprise services that include a telecommunications component and for so-called ‘one-way’ VoIP services,” they said (http://xrl.us/bnnryk). “We further observed that the record supports reducing the safe harbor interstate revenue allocation for wireless carriers and clarifying the contribution obligations of wholesale carriers."

In a motion released Tuesday, the FCC asked for dismissal of a case brought by Accipiter Communications seeking judicial review of an FCC order denying petitions to clarify and reconsider revisions to the FCC’s USF and intercarrier compensation rules. In the motion dated July 30, the FCC argued the case should be dismissed by in the U.S. Court of Appeals for the D.C. Circuit for lack of jurisdiction, saying agency orders that deny a petition for reconsideration are “'unreviewable except insofar as the request for reconsideration was based upon new evidence or changed circumstances.’ … Accipiter did not base its reconsideration petition on either new evidence or changed circumstances” (http://xrl.us/bnnrov). Accipiter opposed the motion, prompting the FCC to issue a reply in support of its initial motion to dismiss (http://xrl.us/bnnrp2). Accipiter moved to strike portions of the FCC’s reply, which the FCC opposed in a response Tuesday (http://xrl.us/bnnrqk).

Terral Telephone asked for a waiver of the FCC’s frozen category rules in a petition filed at the commission. Terral operates a copper and fiber network in the southern part of Jefferson County, Okla. “Waiver of these rules would allow Terral to properly allocate its costs enabling the Company to receive the appropriate cost-based settlements while lessening the burden on the [USF] high cost fund,” the petition said (http://xrl.us/bnnrny). “As demonstrated herein, grant of this waiver is warranted due to the fact that the ‘good cause’ waiver standard has been satisfied, and grant of this waiver would be in the public interest."

A pair of House lawmakers discussed USF contribution reform following recent news reports that suggested the FCC may levy a new “tax” on Internet service (CD Aug 29 p1). Rep. Bobby Rush, D-Ill., said in an email statement that the government should generally refrain from adopting a USF contribution mechanism that is “likely to cause broadband subscribers to seriously reconsider whether to maintain their broadband subscription” “Accordingly, I'd encourage the FCC to review how price sensitive consumers might be to varying Connect America Fund assessment levels on their broadband service bills,” he said. Separately, a spokesman for Rep. John Shimkus, R-Ill., said the congressman supports using the USF funds for broadband deployment in rural areas but “does not support any additional fees on top of the current fee.”

General Communication would be able to continue and even expand service to Alaska’s Adak Island if Adak Eagle Enterprises is forced to shut down, General’s attorney told FCC Wireline Bureau officials, an ex parte filing said (http://xrl.us/bnnnba). Adak has applied for a waiver of certain USF rules limiting reimbursable capital and operating expenses (CD Aug 20 p1). GCI explained its opposition to AEE subsidiary Windy City Cellular’s petition for waiver, “as this would prematurely allow Windy City to become the sole 3G provider on Adak Island without due process mandated by the USF/ICC Transformation Order,” GCI said. GCI also discussed its efforts to model the cost of providing mobile wireless service, and the modeling challenges facing any Alaska cost model.

Matanuska Telephone Association seeks a waiver of new USF rules limiting reimbursement for capital expenditures. The quantile regression model used to calculate costs “has the effect of penalizing MTA for its efforts to deploy an efficient network to serve a vast and challenging service area,” MTA wrote in its petition (http://xrl.us/bnnmnz). The model’s Alaskan coefficient of -0.6223 doesn’t account for the high costs of deploying infrastructure in MTA’s rural territory, and leads to the conclusion “that MTA’s infrastructure costs are currently too high when compared to carriers in the rest of the country by extrapolating costs from the operations of other Alaska carriers that simply do not apply to MTA’s operations,” the petition said. “This result simply does not jibe with the facts."

Oppositions to Allband’s request for a 15-year waiver of certain USF rules (CD Aug 27 p1) are due Sept. 11 in docket 10-90, a public notice said (http://xrl.us/bnnih7). Allband filed the application for review of the FCC’s waiver order that granted it a 3-year waiver of the $250 per-line per-month cap on total high-cost support. Allband also wants a waiver of the rules establishing limits on reimbursable capital and operating expenses within high-cost loop support. Replies to oppositions will be due Sept. 21.

Recent news reports suggesting that the FCC may levy a new “tax” on Internet service are sparking a wave of negative reaction from both free market-oriented and public interest groups. Free Press has had longstanding concerns. On Tuesday, the free-market Heartland Institute joined in. But it remains unclear at this point how much support there is at the FCC for contribution reform or a move to broaden the program to place a fee on retail Internet access service.