The FCC shouldn’t get bogged down in questions of how to classify text messaging for Universal Service Fund contributions or any other piecemeal approach to universal service contribution reform, USTelecom warned the commission in comments posted to docket 06-122 and released Tuesday. “Universal service contribution issues need to be addressed in a comprehensive proceeding, not through ad hoc proceedings, such as those for which the Commission requests comment here,” USTelecom executives David Cohen and Jonathan Banks wrote in their comments.

The House Commerce Committee is content to let the FCC take a first run at the Universal Service Fund overhaul, a committee spokeswoman told us Friday. “We are waiting to see what the FCC decides to do before we make a decision on whether legislation is necessary,” the spokeswoman said. Congress’ tacit approval of the FCC’s reform schedule had been expected (CD Feb 8 p1) but Friday’s statement comes amidst a blitz by rural telcos trying to get the Hill to intervene in the USF proceedings (CD May 25 p8). On the Senate side, Commerce Committee Chairman Jay Rockefeller, D-W.Va. has said D-block legislation is his “highest priority” (CD Feb 17 p4).

Correction: Wayne Jortner, senior counsel with Maine’s Public Advocate Office, is a member of the Board of the Universal Service Administrative Company, not the Federal-State USF Joint Board (CD May 31 p7).

The FCC’s quiet but determined diplomacy with state regulators has helped ease Chairman Julius Genachowski’s path through key elements of the National Broadband Plan, state and federal officials told us. In early May, for instance, the Joint Board on Universal Service filed comments on Genachowski’s proposed Universal Service Fund and intercarrier compensation system revisions. Whatever the Joint Board’s other recommendations, it did not insist that the matter should have been referred back to the Joint Board. FCC officials took that as an implicit endorsements of their efforts, which in turn undermined criticisms from rural carriers that the FCC didn’t have jurisdiction (CD May 4 p2). “There really has been a lot of outreach from this FCC,” Vermont Public Service Board Member John Burke told us at the time. “I think it’s fair to say that the FCC here was pretty much unprecedented on how they reached out to members.”

The FCC’s comment period has closed and industry officials are pressing their cases for Universal Service Fund and intercarrier compensation regime updates at venues from the Hill to the commission. Talks continue, with the hope of reaching an industry-wide consensus, but each sector has already begun pressing cases in ex parte meetings and Hill visits. Rural telcos have been dropping letters off on the Hill, asking legislators to urge FCC Chairman Julius Genachowski “strongly” to “consider the proposals put forward by the rural associations (OPASTCO, WTA, NTCA and NECA).” OPASTCO Vice President Randy Tyree said he hopes Congress will “weigh in and let the FCC know the importance of rural cooperatives that are out there serving and doing a good job.”

The FCC can hand Universal Service Funds to non-Title II services, Public Knowledge said in a meeting with FCC officials. “While it continues to believe that the best legal framework to support USF for broadband is Title II, the theories articulated by the Commission in its NPRM … can provide adequate authority to direct funds to providers of information services,” the group said in an ex parte notice posted on docket 10-90 and published on the commission’s website Wednesday. Public Knowledge argued that the FCC ought to set a Universal Service Fund goal of 100 percent broadband penetration. “In particular, PK discussed its proposal that fund recipients be required to provide interconnection points to allow unserved communities to provision their own broadband service,” the group said of its Tuesday meeting. “Under this self-provisioning model, communities that would be otherwise unserved have the option of deploying a network suitable to local conditions, gaining connectivity from a nearby USF recipient.” The group urged the commission to consider one-time grants for equipment. But Public Knowledge “also argued that metrics other than speed” be considered in reforms. “For instance, some providers (such as many satellite broadband operators) only offer service with restrictive network management practices and usage caps,” the group said.

The Florida Public Service Commission settled with Associated Telecom Management Services over violations of state Lifeline rules, the commission said. ATMS companies operating in Florida include American Dial Tone (ADT), Bellerud, LifeConnex and All American Telecom. A recent PSC staff investigation uncovered unusual growth in Universal Service Fund disbursements for some ATMS Florida companies. ADT received $6.2 million in state USF funds. The investigation also indicated from multiple anonymous sources that ATMS’s Florida subsidiaries allegedly failed to obtain certification of Lifeline applicants, misrepresented customer enrollments when claiming reimbursement and improperly shared customer information. As part of the settlement, ATMS will pay $4 million to Florida’s General Revenue Fund, in $250,000 quarterly installments, with the chance to suspend $2 million of payments if the company shows all terms of the pact were met. The company committed to a four-year agreement of enhanced monitoring and compliance, with penalties for non-compliance. It will surrender all competitive local exchange company certificates except American Dial Tone and agree to suspension of ADT’s eligible telecom carrier designation for two years, with the option to request that the PSC lift suspension after one year for demonstrated compliance.

Industry remains divided on how best to fix the Universal Service Fund and intercarrier compensation regimes, with a few months left before an FCC-promised deadline. Despite broad agreement that USF and intercarrier comp need fixing, reply comments show deep divisions over such questions as how quickly to transform to an all-IP network, how to treat VoIP service and the role of satellite and wireless technologies. “There is no doubt that the current universal service fund … and intercarrier compensation regimes are not sustainable in light of market and technological changes,” the Independent Telephone & Telecommunications Alliance said. “The comments show that there is no industry consensus in favor of the reforms outlined in the Notice or any other plan to promote broadband deployment to unserved areas.” The replies were posted in docket 10-90.

The House would cut the broadband loans program at the Rural Utilities Service under fiscal 2012 budget legislation moving through the Appropriations Committee. The panel’s Agriculture Subcommittee late Tuesday approved an agriculture bill that counts the RUS program among its cuts. House Communications Subcommittee Ranking Member Anna Eshoo, D-Calif., slammed the proposed cut. USTelecom and the NTCA supported giving $22 million to the loans program under an amendment submitted by Rep. Cynthia Lummis, R-Wyo. At our deadline, the subcommittee voted not to adopt the Lummis amendment.

The FCC should impose a date certain for the end of the high-cost Universal Service Fund, the Free State Foundation said in reply comments on a rulemaking on the future of USF and intercarrier compensation. The fund imposes a 15 percent “tax” on all long distance calls to support universal service subsidies, the group said. “The Commission’s end game for its comprehensive USF and ICC reforms should be the eventual elimination of all high-cost fund and related subsidies,” the foundation said. “Placing a hard cap on the high-cost fund and lowering it over time in tandem with a decreasing fund size constitutes a realistic means for achieving that end."