FCC Chairman Julius Genachowski has asked cable lobbyists about what the commission should do with carrier of last resort (COLR) obligations as it contemplates universal service reform, cable executives told us Wednesday. Wireline staff have also asked questions about whether cable companies would be willing to go through the eligible telecommunications carrier process if the commission gets rid of the provision for ILEC right-of-first refusal in the proposed America’s Broadband Connectivity plan, executives said in a reporters’ briefing Wednesday at NCTA headquarters in Washington.

CTIA said any Mobility Fund created as part of FCC Universal Service Fund reform must be sufficient to meet the needs of wireless subscribers in high-cost areas. The remarks came in meetings with various FCC officials, including aides to all four FCC commissioners (http://xrl.us/bmc7ou). CTIA did not file reply comments in the USF rulemaking, though it did offer initial comments questioning whether the $300 million proposed for the fund in the ABC Plan is adequate (CD Aug 25 p8). CTIA again questioned during the meetings whether proposed funding levels are sufficient. “Consumers are rapidly migrating to mobile broadband, and a sufficient mobility fund that ensures that Americans have access to those services is consistent with the goals of Congress, the National Broadband Plan, and the Commission,” CTIA said. “In determining the appropriate size of a proposed Mobility Fund, the Commission must engage in a fact-based analysis and take account of the fundamental nature of mobile networks, which must be available wherever Americans live, work, and travel.” CTIA’s two biggest members, Verizon Wireless and AT&T support the ABC Plan and CTIA has been relatively quiet on the issue (CD Aug 25 p1). CTIA officials were last at the FCC in July to discuss changes to the USF, according to on ex parte filings at the agency.

Package bidding, as proposed in the FCC’s Mobility Fund notice of proposed rulemaking, would be bad for smaller carriers, said Rural Cellular Association General Counsel Rebecca Thompson in a call with Wireless Bureau officials (http://xrl.us/bmc7kr). Package bidding “typically benefits the larger carriers with nationwide footprints and resources to outbid another applicant for the sole purpose of blocking competition or off-setting contributions,” RCA said. “Use of reverse auctions to distribute USF funds, whether the FCC includes package bidding or not, perpetuates a monopoly at the expense of market-based competition, innovation, consumer choice, competitive prices and new technology.”

The FCC should abolish access charges immediately, George Washington University telecom professor Gerald Brock argued in a paper published by the Free State Foundation. He said wireless carriers have “prospered and pioneered important innovations such as distance insensitive rates” because of their exemption from rates in the 1990s. He also said the current system “retards technological progress,” and creates “high transaction costs as companies seek ways to profit from access charge arbitrage.” The early access charges were designed as a subsidy, but “identifiable subsidies have already been removed from access charges and the previous subsidy revenue incorporated into USF payments,” Brock said. He’s also concerned that because “the same facilities can be used for regulated telephone service and unregulated services, the regulatory procedures used to compute access charges cause them to sometimes subsidize competitive services or provide windfall profits."

The FCC should follow the industry, state government and public interest commenters that reject the universal service fund reform plans brokered by incumbent local exchange carriers, which represent the “parochial interests of a very narrow industry segment,” said satellite broadband providers in joint comments (http://xrl.us/bmcq7u). The providers, which include Spacenet, ViaSat and ViaSat’s subsidiary WildBlue, Dish Network, its sister company EchoStar, and EchoStar subsidiary Hughes, filed reply comments in docket 10-90 on USF proposals. (See separate story this issue). Suggestions that satellite broadband is inferior to terrestrial are based on satellite offerings that are congested due to oversubscription, they said. Coming ViaSat and Hughes high-throughput satellites will add speed, quality and capacity, they said. Satellite broadband will meet the requirements of the program and has been recognized by the agency as qualified for universal service support, they said.

Wireless carriers other than AT&T and Verizon Wireless, which signed the ABC Plan for Universal Service Fund and intercarrier compensation reform, hope to win concessions as proposed changes to the program move forward at the FCC. With the wireless industry presenting a divided front, it’s unclear how much leverage smaller wireless carriers will have and what changes they will be able to push through at the commission.

State regulators took aim at the industry-endorsed proposals for universal service and intercarrier compensation regime reforms, in reply comments on docket 10-90. Drawing the heaviest fire was the incumbent-backed America’s Broadband Connectivity plan. Regulators from Maine to Alaska blasted the proposals. State regulators have formed themselves into a task force hoping to convince the FCC that it’s too early to create uniform compensation rates (CD Sept 2 p7).

Comments continued to pour in Tuesday as the deadline for filings on industry-proposed universal service and intercarrier compensation regime changes expired. Incumbent telcos were mostly fighting a holding action, while a handful of rural carriers recommitted to fighting against the broader industry consensus. The six companies behind the so-called America’s Broadband Connectivity plan (CD Aug 1 p1) said in a statement that they had come up with a “detailed and workable proposal for fixing the outdated and unsustainable universal service and intercarrier compensation programs.” The companies -- AT&T, Verizon, Frontier, CenturyLink, Windstream and FairPoint -- added: “Adoption of the ABC Plan will lead to greater broadband deployment in rural America. The plan enjoys broad support on issues that have paralyzed the industry for years."

State regulators formed a NARUC task force hoping to convince the FCC to create financial incentives to states to lower their intercarrier compensation rates, Vermont regulator and NARUC telecom committee Chairman John Burke told us Thursday. The task force is chaired by New York Commissioner Maureen Harris, Burke said. Members of the task force hope to have recommendations before the October open meeting, when many expect the FCC to move to orders on universal service fund and intercarrier compensation regime reforms, Burke said. Some state regulators are hoping to keep the FCC from preempting state authority with the reforms, he said.

The FCC should consider limiting Lifeline/Link-Up reimbursement to a single line per qualifying adult rather than the proposed single line per residential address, CompTel said in a filing at the FCC (http://xrl.us/bmbmta) on the commission’s further notice of proposed rulemaking. No one should be denied a phone because they live in a group facility, CompTel said. The FCC should also reject arguments that Link-Up reimbursements for non-recurring costs should be limited or eliminated, the group said. “Doing so would recreate a barrier to subscribership for low income consumers,” CompTel said. “The Link-Up program was created to reimburse [eligible telecommunications carriers] for the revenues they forgo in providing low income consumers a discount on service activation fees. Service activation fees are standard in both the wireline and wireless industries and in the absence of Link-Up assistance, consumers will be forced to pay 100 percent of those charges, which very well may discourage consumers from signing up for telephone service.” A beefed up Lifeline/Link-Up program could eventually supplant other Universal Service Fund programs and the FCC should resist “artificially constraining the size of the program, especially now when the nation’s consumers are in the midst of difficult economic times,” the Free State Foundation said Friday in a filing at the FCC (http://xrl.us/bmbk9j). “We support ongoing efforts, such as some the proposals put forward by the Commission, to ensure the programs operate with integrity and efficiency,” the filing said. “For example, we support pro-efficiency and anti-fraud measures to eliminate duplicate enrollment by the same customers with multiple [eligible telecom carriers], to provide Link-Up support to reimburse only costs actually incurred for initiating service, and to improve methods for verifying customers’ eligibility.” The group said the Lifeline program is inherently more efficient than other USF programs. “A primary strength of the Lifeline/Link-Up programs is that their subsidies are targeted to those low-income persons that need them,” the filing said. “Subsidies targeted to individuals are more efficient and can be more reliably monitored for accountability than subsidies targeted more broadly to service providers."