The U.S. Court of Appeals for the D.C. Circuit upheld the FCC in a challenge from competitive carriers, who argued that the FCC “put the cart before the horse” when it ordered that relinquished USF monies shouldn’t be redistributed among a state’s eligible telecom carriers. Instead, the FCC set aside the money to be used later to pay for broadband. The Rural Cellular Association, joined by the Universal Service for America Coalition, argued that the January 2010 order violated the Communications Act and FCC regulations and was arbitrary and capricious in that it fell short of explaining how it ensures the “sufficient” level of support for CETCs required by the act.

NASUCA has asked that all interested parties get a 30-day extension to file reply comments on changes to the USF contribution methodology (http://xrl.us/bngnky). NASUCA argued the 28-day reply period is inadequate to review the 1,465 pages of comments in 79 filings made as of noon Wednesday. “Additional time is needed to review and study the initial comments and potentially to formulate thoughtful reply comments,” the association told the FCC, asking for the reply deadline to be extended from Aug. 6 to Sept. 6.

NTCA met with FCC Commissioner Jessica Rosenworcel’s wireline aide, Priscilla Argeris, to discuss concerns over the lack of transparency and predictability in the new regression analysis-based caps on USF support, said an ex parte filing detailing Monday’s meeting (http://xrl.us/bngevj).

Cox Communications executives spoke about the “overlap” in locations where the cable operator’s phone customers are and those of a telco in Arizona, a filing on their meeting with an aide to FCC Chairman Julius Genachowski said. “Cox competes with Accipiter in portions of the fast-developing North Valley and West Valley areas outside of Phoenix,” the filing in docket 10-208 said (http://xrl.us/bngebi). “Most of the places where Accipiter and Cox compete are within master-planned developments and connecting areas. Accipiter has been spending most of its efforts to build out in places where it competes with Cox, not to serve underserved populations in sparsely populated areas.” The cable operator has opposed Accipiter’s USF waiver request (CD June 8 p15).

Sprint Nextel asked Texas to eliminate the company’s status as an eligible telecom carrier (ETC) in the state, in a Monday filing with the Texas Public Utility Commission (http://xrl.us/bngdxe). The company said it “plans to continue to provide wireless service in Texas as a non-ETC,” after holding ETC status for the past seven years. The effective date of its ETC relinquishment is in well over 90 days and not until Dec. 31, the company said. Sprint plans to stop accepting new Lifeline customers after Nov. 30, and will inform existing customers that its Lifeline credit will be discontinued, Sprint said. The telco noted that AT&T Texas and Verizon Southwest hold ETC status in Texas and thus, “Sprint, in its ETC capacity, does not provide service in an area that is not served by another ETC.” Sprint attributes its decision to relinquish ETC status to its “high-cost USF phase-out obligation,” part of the FCC’s 2010 implementation order.

Of the dozens of comments filed this week in response to the FCC’s rulemaking on USF contribution reform, there was little agreement about whether to stick with a revenue-based system for assessing contribution fees, to move to a system that uses connections or numbers, or even whether to assess fees on broadband service. The only universal sentiment that might be teased out of the plethora of comments filed is that, as AT&T put it, the current system is “dysfunctional.” Carriers differed, but generally supported a modified revenue-based system, while VoIP providers preferred a connections-based system.

The FCC’s plans for special access reform became a prominent issue during a House Communications Subcommittee hearing Tuesday where members queried the commissioners on a broad spectrum of regulatory issues. Chairman Julius Genachowski conceded that the current framework for special access is “not working” but said the commission lacks the necessary data to determine how exactly it should be reformed.

Leading House Commerce Committee members from both parties asked the FCC Monday for more data about how the USF is funded (http://xrl.us/bngawg). They asked for up-to-date state-by-state information on the commission’s high-cost and low-income programs. The committee members also asked for a timeline of the commission’s decisions related to the USF/intercarrier compensation order. The letter was signed by Chairman Fred Upton, R-Mich., Ranking Member Henry Waxman, D-Calif., Communications Subcommittee Chairman Greg Walden, R-Ore., and Ranking Member Anna Eshoo, D-Calif.

About 200,000 rural Americans could get broadband for the first time as Frontier announced Monday it would accept nearly $72 million from the FCC’s Connect America Fund. The commission announced the funding in April, allocating a total of $300 million to ten carriers if they agreed to deploy broadband to unserved areas (CD April 26 p1). Frontier is the first carrier to say it will accept the funding.

South Carolina conditionally approved Allied Wireless Communications to be designated an eligible telecom carrier (ETC), in a Thursday order after nearly two years of proceedings (http://xrl.us/bnfrct). Allied applied for ETC status Nov. 24, 2010, but in July 2011, the South Carolina Public Service Commission “held Allied’s application in abeyance in anticipation of the FCC’s action” in reforming the USF, which happened in November. Allied requested the PSC grant continued abeyance in February 2012 (http://xrl.us/bnfree) as the FCC continued to work out its list of unserved areas and Mobility Fund eligibility requirements, which it concluded in May. Mobility Fund eligibility calls for ETC status and will be considered at the FCC’s phase 1 auction set for Sept. 27, with a filing deadline of July 11. Allied applied for expedited ETC consideration with the South Carolina PSC on June 7 (http://xrl.us/bnfrdf), and the PSC complied without opposition in granting conditional ETC status to let the carrier bid for Mobility Fund money, the state commission said, with the approval’s condition based on successful bidding. The PSC called the company “uniquely positioned” to “bring service to these unserved areas in South Carolina."