CenturyLink Q4 profit declined 16 percent to $867 million from a year ago, the company said. With the implementation of the FCC’s Universal Service Fund and intercarrier compensation order, the company’s access revenue will decline over the next few years, Chief Financial Officer Stewart Ewing said during a conference call. But the company’s hopeful of some broadband-related USF revenues, he said. Broadband subscriptions are a bright spot: Subscribers rose 4.5 percent to 5.55 million. The company is on track with its integration of Qwest and Savvis this year, Ewing said. Helped by growth in wireless backhaul and wholesale Ethernet, the wholesale unit reported $564 million in strategic revenue, up 5.4 percent. The company expects operating revenue between $18.2 billion and $18.4 billion for 2012.

Universal Service Fund contribution reform is on the way, but likely at a slower pace than expected last year, after the commission wrapped up distribution reform. FCC Chairman Julius Genachowski told the House Communications Subcommittee Thursday he expects work to start within six months.

Rural telecom companies protested the FCC’s Universal Service Fund and intercarrier compensation revamp efforts, in testimony at a hearing Wednesday of the House Small Business Subcommittee on Healthcare. Witnesses also complained about high administrative costs to apply for federal grants and loans. Subcommittee leaders urged accelerated broadband buildout, particularly in rural areas. Chairman Renee Ellmers, R-N.C., urged passage of her bill (HR-2128) to stop the federal government from imposing penalties on health care providers who can’t make electronic prescriptions.

AT&T’s proposed buy of T-Mobile “clearly” crossed a line and posed a risk to competition, FCC Chairman Julius Genachowski said Monday at a Silicon Flatirons conference on “The Digital Broadband Migration.” Genachowski also indicated the FCC may reopen its receiver standards inquiry.

Correction: The FCC was on firm ground bringing all traffic under the 1996 Act but the agency didn’t justify bill-and-keep in its USF Order, said Joseph Gillan, consultant with Gillan Associates (CD Feb 8 p4).

Implementing the Universal Service Fund and intercarrier compensation order, tackling consumer issues like bill shock and cramming, and developing a framework for Next Generation 911 are priorities for FCC this year, bureau chiefs said during NARUC’s telecom committee meeting Tuesday.

The universal service contribution base has long been broken, and will be insufficient to deploy ubiquitous broadband service unless major reforms are made. That was the consensus among industry panelists at NARUC Tuesday. But there was no agreement on how to draw funds from a system in which some customers pay for telecommunication services and some pay for information services, and panelists said figuring out interstate retail revenue is complicated.

The FCC Wireline Bureau released an order Friday clarifying the USF/ICC Transformation Order and modifying some initial filing deadlines. The order amended section 54.318(d) to clarify that support reductions associated with the Universal Service rate floor will offset frozen CAF Phase I support only to the extent that the frozen CAF Phase I support replaced high-cost loop support and high-cost model support (http://xrl.us/bmq567). The order also clarified that, in implementing the new intercarrier compensation for VoIP regime adopted in the USF Order, when a carrier’s intrastate access rate is lower than its corresponding interstate access rate, the carrier may not include a rate for toll VoIP-PSTN traffic in its intrastate tariff that is higher than its intrastate access rate. The clarification order is helpful because it facilitates to a degree the states’ work evaluating various intrastate tariffs that deal with wholesale carrier access rates for VoIP traffic, a state official said. It’s one of the many clarification orders that the FCC is expected to issue as the agency deals with several pending reconsideration petitions of its USF order, he said. However, the core issues involved in the pending federal appeals of the USF Order aren’t being undermined by the clarification orders, he said.

Consolidated Communications agreed to buy SureWest for $341 million in cash and stock, the companies said. The deal gives Consolidated SureWest’s 130,000 residential subscribers and 15,700 commercial businesses in the greater Sacramento and Kansas City areas. The combined companies will have about 1,775 employees. The move came less than two weeks after an analyst said Google could buy SureWest to boost its fiber initiatives. Consolidated will pay $23 per SureWest share, or an equal amount of Consolidated common stock. The per-share price represented a 47 percent premium to SureWest’s Friday closing stock price. The deal is expected to save $25 million in operating cost and $5 million to $10 million in capital expenditure, the companies said. Consolidated expects to incur merger and integration costs, excluding closing costs, of around $20 million to $25 million over the first two years after closing.

NARUC’s telecom committee passed its resolution on VoIP outage reporting requirements at its winter meeting Monday. But the risk of VoIP service outages doesn’t justify the burden on VoIP providers to report outages to the FCC, industry officials said at a committee meeting Sunday. Meanwhile, the 1996 Telecom Act is “growing long in the tooth” and there would be heavy discussions about what comes next over the next year, said Michael Powell, head of the National Cable Telecom Association, during a general session Monday.