Sprint Nextel began in Kansas its Lifeline program Assurance Wireless, the company said. The service includes a free cellphone and 250 free monthly voice minutes for eligible residents. Customers eligible for the program, which is funded by federal Universal Service Fund, include those who participate in Medicaid, Food Stamps/SNAP, General Assistance, Head Start, Supplemental Security Income, Temporary Assistance to Needy Families, United Tribes Food Distribution Program, Bureau of Indian Affairs General Assistance, Tribally Administered Temporary Assistance for Needy Families or the National School Lunch Program’s Free Lunch Program. Customers may also qualify based on low household income.

There seem to be many legal issues with the FCC’s USF Order, Wayne Jortner, senior counsel with Maine’s consumer advocate office, board member of USAC and a member of the NASUCA telecom committee, told us. Parts of the order don’t sufficiently adhere to the Telecom Act of 1996, he said. The FCC isn’t authorized to support a service (broadband) that it refuses to designate as a telecom service, he said. The cost model is the “brains behind the broadband plan” but it doesn’t yet exist, causing a great deal of uncertainty and making it hard to evaluate the merits of the program, he said. Consumer advocates aren’t in favor of impeding progress with unnecessary litigation but “if we determine that consumers are being harmed, we will consider legal challenges,” he said. The mandated broadband speeds would be too challenging for some companies while, and in the long term, insufficient for growing bandwidth needs, he said. Additionally, $4.5 billion as a total for all high-cost support, including new broadband subsidies, may not be sufficient to meet the broadband needs, he said. The real cost could be far higher, according to some analysts. But consumer advocates aren’t yet able to project the right number, Jortner said. The intercarrier compensation parts of the order would “artificially” remove a cost of doing business (use of incumbent’s networks) and leave revenue holes to be filled by rate increases, he said. The order also “unlawfully” preempts state jurisdiction of interstate access, he said. The order would increase prices for ILEC customers just as ILECs are losing customers to competitors, he said. Access recovery charge is “unnecessary and deceptive,” he said. The order also fails to address the downside of IP networks, he said.

TracFone took aim at the Link Up for America Coalition in a meeting with FCC staff, according to an ex parte notice filed by TracFone and published on docket 11-42 on Tuesday. “At the outset, there is no need to divert millions of dollars a year from the USF to provide Link Up subsidies (especially to wireless resellers) to provide service to low income households,” TracFone said in its letter, responding to a coalition filing from last week (http://xrl.us/bmjabi): “The Coalition asserts that Link Up support is somehow necessary to enable ETCs to initiate wireless services to low income consumers. That statement is unsupported and is facially false.” TracFone said it’s disturbed that the coalition views Link-Up as “a revenue replacement mechanism” and about the Coalition’s apparent belief that its members are entitled to Link-Up reimbursements for activation fees. “Nowhere has the Coalition provided any documentation as to which of its members -- if any -- are charged activation fees and how much -- if anything -- those members pay in activation fees,” TracFone said, saying the coalition’s claims of other wireless carriers’ activation fees “are especially curious.” Speaking of the coalition’s ex parte notice, TracFone said: “Nowhere does the Coalition offer any explanation as to why its two members’ activation fees are nearly double those charged by every other wireless carrier identified by the Coalition as having an activation fee. Neither does the Coalition indicate whether any of those seven named carriers impose activation fees on Lifeline customers. Not one of those carriers charges Lifeline customers activation fees. Apparently, only the Coalition members and a handful of minor carriers with similar strategies have the temerity to subject Lifeline customers to activation fees and even the greater temerity to ask the USF -- and those who fund the USF -- to subsidize those activation fees.” The FCC was expected to circulate an order on Lifeline Tuesday evening, and much of the recent lobbying has focused on Link-Up reimbursements. The coalition’s lawyer couldn’t be reached for comment Tuesday.

The FCC will take on the contribution side of Universal Service Fund reform early next year, with an order likely by mid-year, FCC Commissioner Robert McDowell predicted Monday during a question and answer session at an Federal Communications Bar Association lunch. McDowell said he has a commitment from Chairman Julius Genachowski to move forward quickly following the commission’s approval last month of an order reforming the distribution side of the USF (CD Oct 28 p1). “The chairman and I have talked,” he said. “Certainly, we have to do something."

The Rural Cellular Association panned the FCC universal service overhaul (CD Nov 19 Bulletin). “I appreciate the FCC’s work to modernize USF, but unfortunately the Order confirms our previous concerns that wireless services are significantly underfunded,” RCA President Steve Berry said. “Adequately funding wireless services would have encouraged competitive carriers to participate -- needless to say, this was a missed opportunity for the FCC to promote industry competition and the build-out of advanced high-speed mobile services."

Paul Clanon, executive director of the California Public Utilities Commission, circulated a memo ordering all interconnected VoIP providers (both nomadic and fixed) to register with the commission within 45 days. California Gov. Jerry Brown (D) recently signed Public Utilities Code Section 285, which mandates that the CPUC require interconnected VoIP providers to collect and remit surcharges in support of the state USF. The new law took effect Oct. 9. The California Competitive Telephone Companies (CALTEL) is seeking clarification of the memo, according to a letter by its executive director Sarah DeYoung. The group had questioned the effectiveness and efficiency of certificated carriers registering with the CPUC. Many CALTEL members offer both VoIP and circuit-switched services and they should have the ability to remit fees for all of the services they offer via a single transaction, CALTEL said. The Utility Reform Network had similar concerns, said staff attorney Christine Mailloux.

Rep. Lee Terry, R-Neb., has recurring concerns about whether the FCC’s Universal Service Fund order, approved last month, does enough to spur the growth of wireless (CD Oct 28 p1), the vice chairman of the House Communications Subcommittee said Wednesday at a National Journal conference on the future of technology. Spectrum and regulatory reform largely dominated the discussions.

The GOP overcame Democratic opposition to FCC process reform proposals, approving two bills Wednesday in the House Communications Subcommittee. On a party line vote, the subcommittee voted 14-9 on HR-3309, which requires rulemaking shot clocks, cost-benefit analyses and a variety of other process changes. However, Democrats supported HR-3310, a bill that would consolidate many FCC reports and eliminate others. The subcommittee approved that bill by voice vote but said more work needs to be done before the next markup in the full committee.

ST. LOUIS -- While some panelists at NARUC’s annual meeting see a continuing state role in a broadband world, others urged regulators to be mindful of market changes that have resulted in loss of revenue. And while some said they can live with the FCC’s Universal Service Fund order, others find it unacceptable.

The FCC “put the cart before the horse” when it ordered that relinquished Universal Service Fund cash shouldn’t be redistributed among a state’s eligible telecom carriers, telecom lawyer Todd Daubert told an appellate panel Tuesday. That January order paved the way for last month’s universal service order (CD Jan 4 p2), but Daubert,representing the Rural Cellular Association and the Universal Service for America Coalition before a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit, said the FCC exceeded the “plain language” of Section 254(d) of the Telecom Act.