The “rumor” is that the FCC is considering granting Vonage’s waiver request and then opening a rulemaking on access to numbering, NARUC General Counsel Brad Ramsay reported telling an aide to Commissioner Ajit Pai on Wednesday (http://xrl.us/bnhkca). That’s neither “efficient nor logical,” and a rulemaking is the proper way to proceed, NARUC said. The FCC must also protect funding streams for state programs as it reforms the contribution side of the USF, the association said. “The FCC should not increase pressure on the State programs and at the same time undercut -- inadvertently or otherwise -- funding sources for these crucial State programs,” NARUC wrote in an ex parte filing.

The FCC approved a fourth order on reconsideration on rules for the USF Mobility Fund, which said “if a petition for reconsideration simply repeats arguments that were previously considered and rejected in the proceeding, it will not likely warrant reconsideration.” The order (http://xrl.us/bnhfr8) affirmed the FCC’s earlier adoption of a reverse auction mechanism. But the commission turned down several requests for changes, including requests that the FCC: restrict or prohibit Tier I carriers from receiving Mobility Fund Phase I support; hold applications for eligible telecom carrier status in abeyance pending completion of the auction and then automatically qualify any winning bidder as an ETC; and deem a carrier to be a Lifeline-only ETC to be eligible to participate in the Mobility Fund without first obtaining general ETC status. The FCC also rejected “for purposes of the auction of Mobility Fund Phase I support, arguments that the Commission provide for bidding preferences to small or rural entities and extend eligibility for the Tribal lands bidding credit to entities that are not Tribally-owned or controlled.”

Massachusetts officials defended technology-neutral cramming rules, third-party blocking and the creation of a Do-Not-Cram registry, in a July 13 meeting with FCC representatives, according to an FCC notice released Tuesday (http://xrl.us/bnha9a). The Massachusetts Department of Telecommunications and Cable Commissioner Geoffrey Why and Deputy General Counsel Kalun Lee also discussed Lifeline, with the commissioner encouraging “revision of FCC Form 499 to obtain more granular data regarding state contributions, which would allow the states to determine whether all stakeholders were fairly contributing to the USF,” and asking “the FCC to prohibit all Lifeline eligible telecommunications carriers (ETCs) from passing along to their Lifeline consumers the obligation to contribute to the USF,” according to the FCC’s notice. Also of concern were Massachusetts’ Lifeline broadband pilot program and the service quality of 911, both of which the state officials are reviewing and may return to in the coming months, the filing said.

The FCC must take steps to simplify and reduce the costs for small carriers to apply for waivers to the commission’s recent USF reform program, said members of the House Small Business Committee during a hearing Wednesday. Subcommittee Ranking Member Nydia Velázquez, D-N.Y., and Rep. Jeff Landry, R-La., said the waiver process is overly burdensome for small businesses, while Rep. Mark Critz, D-Pa., said small carriers are paying up to $300,000 to apply for the program.

State utility commissioners will consider four potential telecom resolutions at NARUC’s midyear meeting in Portland, Ore., on July 22-25. The resolutions ask the FCC to revisit telecom rules, sometimes lauding the federal commission but often asking it to take action. NARUC posted both the resolution drafts (http://xrl.us/bng7ny) and the conference’s final agenda (http://xrl.us/bng7n6) online, the association said late Monday. The resolutions will, according to NARUC, be debated throughout the Portland conference and may become a part of the association’s policy if they are voted out of the telecom committee and are approved by the board July 25.

A federal circuit court opinion affirming an FCC order on the use of high-cost universal service money supports the FCC’s argument in a case over its new quantile regression analysis to limit USF support for high-cost infrastructure, the commission argued in a letter to the court Friday in case number 11-9900. The U.S. Court of Appeals for the D.C. Circuit ruled for the agency Friday in a challenge from competitive carriers, who sued when the FCC set aside USF money to be used later for broadband (CD July 16 p1). In its letter to the 10th U.S. Circuit Court of Appeals, the FCC said the court decision was a “pertinent authority” that supports the commission’s argument that it would not be in the public interest to stay implementation of the new methodology for imposing limits on expenses that rate-of-return regulated LECs can recover through USF. The FCC also noted that the D.C. Circuit “discussed, with approval,” an FCC waiver process used to provide additional subsidies to telecom carriers. “The Court’s holding is entirely consistent with the FCC’s position … that a waiver for an individual carrier -- rather than a stay of the benchmarks -- is the appropriate remedy where the impact of the benchmarking methodology could undercut consumer access to voice and broadband services,” the FCC wrote.

The regression analysis-based caps on USF support appear to have been implemented without any publicly available testing to confirm or falsify them, the NTCA told FCC Commissioner Ajit Pai and advisers Friday (http://xrl.us/bng3ej). If such testing has been conducted, the commission should produce the results; if not, the commission should suspend the caps, conduct testing and ultimately provide much clearer rules to enable company managers in the field to understand which investments will be recoverable through USF support, NTCA said. Otherwise, the association cautioned, “rural broadband investment by small rural carriers may grind to a halt."

Deciding whether to accept FCC broadband funding under Phase 1 of the Connect America Fund will depend on many factors, not just on the amount of per-household support available, Verizon told an aide to Commissioner Ajit Pai on Thursday (http://xrl.us/bng3br). The company was awarded $20 million to deploy broadband to unserved areas at a subsidy of $775 per location, and has until July 24 to state whether it will take the money (CD July 10 p5). Regarding frozen universal support for broadband operational expenses, carriers should be afforded maximum flexibility in using the funds if the permanent Connect America Fund is delayed, Verizon said. It offered suggestions for near-term changes to the USF contribution system, including annual modifications to the Form 499 instructions for notice and comments, resolution of issues regarding potential contributions on multi-protocol label switching-enabled service, and cleaning up the reseller exemption process. Verizon also opposed subjecting text messaging revenues to USF assessments for the first time.

The FCC opposed a motion for stay filed by the National Telecommunications Cooperative Association in the 10th U.S. Circuit Court of Appeals. NTCA had asked the court to suspend implementation of a Wireline Bureau order adopting a methodology for limiting capital and operating expenses that rate-of-return regulated LECs can recover through the USF (see related story in this issue). In its filing Thursday, the commission opposed NTCA’s request, arguing the association had not demonstrated the irreparable harm needed for a stay. “Even beyond that, NTCA does not contend that the economic harm caused by the modest reductions in support resulting from the benchmarks, which are being phased-in over 18 months, imminently threaten the existence of any carrier,” the FCC wrote. Staying implementation of the Regression Order would “perpetuate the problematic incentives and funding inequities associated with the Commission’s existing rules and delay much-needed reforms intended to benefit consumers,” the FCC said.

More than 650 telecom providers signed a letter to commissioners “to ensure” the FCC and Congress “have clear and unambiguous notice of our collective concerns with the ‘regression analysis'-based caps” on USF support (http://xrl.us/bngrm9). A NTCA spokeswoman said the letter was an industry-wide effort in which several national and state associations, other groups and individual members “all reached out collectively to raise the visibility of this issue among policy makers in Washington.” The commission has received eight waiver petitions dealing with support reductions, of which one has been granted interim relief, a spokesman said. The commission also got two expedited waiver petitions dealing with boundary data, which it granted.