The controversy over the GOP’s efforts to use the Universal Service Fund to pay down the nation’s deficit ought to remind the telecom industry that the money is “finite,” AT&T Vice President Hulk Hultquist said Tuesday. Last week, the industry went into uproar when it emerged that House Republicans were considering using $1 billion from the fund to help close the budget gap (CD July 14 p1). Telcos small and large, which had disagreed over how to fix universal service, united in their condemnation. “There are definitely legal issues with that … that aren’t well understood,” Hultquist said at a Broadband Breakfast in Washington: “You know, there are limited means to do what we want to accomplish.”

LOS ANGELES -- There’s no time to lose in addressing issues with call completion because public safety, homeland security and economic well-being in rural America are threatened, said panelists at the National Association of Regulatory Utility Commissioners meeting. Meanwhile, no commitments were made during Chairman Julius Genachowski’s meeting with the USF Federal/State Joint Board and the NARUC Telecom Committee.

LOS ANGELES -- Panelists at NARUC’s summer meeting urged the FCC to address the missing pieces in the Universal Service Fund and intercarrier compensation revamp. Those are contribution, speed and roles for small and rural phone companies, speakers said Sunday. Meanwhile, FCC Chairman Julius Genachowski was expected to meet with the NARUC Telecom Committee and the Federal/State Joint Board at NARUC’s summer meeting late Monday.

Rural telcos opened their Washington blitz this week and pressed their case to protect Universal Service Fund revenue, ex parte notices filed in FCC docket 10-90 showed. In a meeting Thursday with Chairman Julius Genachowski’s aide Zac Katz, rural executives and leaders from their associations promoted their own reform proposals, said an ex parte notice. In a separate meeting with Christine Kurth, aide to Commissioner Robert McDowell, rural executives said their companies need “predictable and sufficient high-cost support and [intercarrier compensation] revenue streams” to “repay their outstanding Rural Utilities Service and private sector loans,” rural telco executives and members of the Western Telecommunications Alliance said. Rural carriers have promised to blitz the Capitol to protect their USF revenue.

Lawmakers shouldn’t tap into the Universal Service Fund, said NARUC President Tony Clark and Telecom Committee Chair John Burke. House Republicans are thinking about using USF to help pay down the budget deficit (CD July 14, p1). Congress is considering tapping the fund to help pay down federal debt. To divert the funds from their intended use would be counterproductive and may undermine the country’s broadband goals, they said. USF receives no federal monies and shouldn’t even be under consideration in the budget debate, they said. USF is funded by fees consumers pay through their phone company to ensure affordable access across America, they said.

Promised FCC deadlines for Universal Service Fund and intercarrier compensation regime reform have been pushed back and Commissioner Robert McDowell said he’s worried that reforms may “slip away.” In an appearance on C-SPAN’s The Communicators, he said “I get concerned when I see dates continue to slip away.” And “I've seen this movie before,” he said in the videotaped interview.

The Universal Service Fund “is not materially increased by requiring very small companies to contribute,” the American Association of Paging Carriers said in a telephone conference with Wireline Bureau staff. The association “pointed out that the exemption level of $10,000 has remained unchanged since the USF was implemented as a result of the Telecommunications Act of 1996,” according to an ex parte released Thursday in docket 09-229. “AAPC further noted that some of its members include small companies with paging service revenues of less than $1 million,” the group said. “Using the 12% ’safe harbor’ interstate allocation allowed by the Commission, the contribution factor of 5.9% for the first quarter of 2000 exempted carriers from contributing to USF until they generated approximately $1.425 million in total service revenues. However, using the ’safe harbor’ allocation during the current quarter, the contribution factor of 14.4% requires contributions from carriers with as little as $590,000 in total service revenues. Similarly, the highest contribution factor to date (15.5%, during the first quarter of 2011) required carriers using the ’safe harbor’ allocation to contribute to USF with as little as $538,000 in total service revenues."

Congress will finish off Universal Service Fund reform, Rep. Lee Terry, R-Neb., said at a press conference Thursday kicking off rural telecom associations’ marketing push on rural broadband. Terry said he’s “extremely optimistic” there will be a deal by the end of August that’s supported by industry, the FCC and the House Commerce Committee. Also at the event, Sen. Mark Begich, D-Alaska, predicted that the Senate will get “very aggressive” on the issue.

The FCC must not remove state jurisdiction over intrastate communications and preserve the joint governmental structure in its Universal Service Fund and Intercarrier Compensation proceeding, state officials said during a seminar held by the National Regulatory Research Institute Wednesday. Other top concerns for state regulators include cost and contribution methods, they said.

House Republicans are thinking about using the Universal Service Fund to help pay down the budget deficit, Congressional documents show and Hill and industry officials told us. Majority Leader Eric Cantor, R-Va., circulated a slide presentation among his colleagues Tuesday that contained cuts and savings proposed in talks with Vice President Joe Biden, including between $20 billion and $25 billion in “spectrum/USF” savings.