Some changes proposed as part of Universal Service Fund reform, such as single-winner reverse auctions, would create much more harm than good, especially for smaller carriers, representatives of SouthernLINC Wireless said in meetings last week with FCC officials. “As the industry continues to consolidate, the presence of regional mobile service providers who focus solely on their local service areas -- as opposed to national wireless service providers whose primary focus traditionally has not been the rural, insular and high cost areas of our country -- provides the types of alternatives which are necessary to ensure that consumers and businesses enjoy the benefits of competition,” SouthernLINC said in an ex parte filing. The filing said that USF reform “should not lead to the inadvertent elimination of these alternatives in the name of achieving slightly faster broadband speeds by subsidizing only a single service provider.” If the FCC gets the rules wrong, the result could be the “remonopolization of communications services” in rural America, the carrier said.

Top congressional staffers are lending a hand in the ongoing talks on an industry-endorsed Universal Service Fund reform proposal, telco and Capitol Hill officials said in interviews. Ray Baum, senior policy adviser on the House Communications Subcommittee and longtime friend of Rep. Greg Walden, R-Ore.; Nick Degani, legal counsel to the subcommittee; and Brad Schweer, legislative director to Rep. Lee Terry, R-Neb.; have all taken an active part in the industry talks in recent weeks, telco officials and Baum said. Since the November elections, Congress had steered clear of USF, focusing on net neutrality, spectrum, FCC reform and AT&T’s plan to buy T-Mobile. Walden earlier this month said he was “encouraged” by the FCC’s USF efforts, and urged industry to come up with a reform package soon (CD June 8 p5).

The House Commerce Committee has asked the FCC for “more targeted data” on the Universal Service Fund. The request came in a letter to Chairman Julius Genachowski, signed by Committee Chairman Fred Upton, R-Mich., and Ranking Member Henry Waxman, D-Calif., and telecom subcommittee Chairman Greg Walden, R-Ore., and Ranking Member Anna Eshoo, D-Calif. Wednesday’s letter continues a years’ long tradition by the committee, seeking data on USF. It asks for state-by-state and company-by-company lists of who got what and for how much money.

The record developed by the FCC makes clear that SMS is an information service and carriers should not have to pay into the Universal Service Fund based on SMS revenue, CTIA said in reply comments. The Wireline Bureau asked for comments on the topic, in response to an April 26 letter from the Universal Service Administrative Co. seeking guidance on the reporting of text messaging revenues for purposes of the USF.

The New York Senate passed legislation that would prevent state regulation of VoIP services. The bill, introduced by GOP Sen. George Maziarz, might not be going anywhere because the state Assembly session ended Monday, his legislative aide told us. Maziarz is working with the Assembly to try to pass the bill in potential extended session, the aide said. S-5769 passed Monday.

Senate Minority Leader Mitch McConnell, R-Ky., sent the White House a letter asking President Barack Obama to nominate Ajit Pai for the Republican seat on the FCC vacated by Meredith Baker. Industry and government officials we spoke with Friday said Pai is likely to be nominated and should face a relatively easy time being confirmed, barring unforeseen complications. Pai’s nomination is likely to be paired with that of Jessica Rosenworcel, an aide to Sen. Jay Rockefeller, D-W.Va.Rosenworcel is expected to be the nominee to replace Democrat Michael Copps on the commission. Copps must leave the FCC when the current session of Congress ends.

CHICAGO -- The FCC’s overhaul of the Universal Service Fund and intercarrier compensation system may take a little longer than had previously been anticipated, an aide to Chairman Julius Genachowski said at the Cable Show in Chicago. Finishing an order on the subjects may take until the fall, said Sherrese Smith, who advises Genachowski on media issues. “I'm only talking about a month or two delay,” not a longer period of time, she told us during a Q-and-A Wednesday. She also said an item on program carriage will be out soon.

Some rural carriers want policymakers to address problems with the existing Universal Service Fund Lifeline program before transitioning it to broadband as proposed in a bill (HR-2163) introduced Tuesday (CD June 14 p6) by Rep. Doris Matsui, D-Calif. The National Telecommunications Cooperative Association supports the “idea” of helping low-income households get broadband, but government should tighten control of the fund before expanding it, said NTCA Senior Vice President Mike Romano in an interview Tuesday. Expanding the Lifeline program should not reduce money for the high-cost program to bring broadband to rural areas, Romano said. Taking away high-cost money could cancel out the effects of expanding Lifeline because, without high-cost subsidies, rural carriers might be forced to raise prices, he said. A new addition this year to Matsui’s USF bill prohibiting duplicate Lifeline awards to a single household is a “good starting point,” but the FCC ultimately will determine how it’s enforced, Romano said. The Independent Telephone & Telecommunications Alliance also cautioned government not to forget rural areas as it tries to improve broadband adoption. “ITTA supports efforts to increase current low broadband adoption rates among many Americans living in urban and rural America,” ITTA President Genevieve Morelli said in a statement. “However, in many parts of rural America consumers lack the basic broadband infrastructure required to take advantage of broadband adoption programs.”

CHICAGO -- Some House Commerce Committee members are skeptical of the need for AllVid rules the FCC has been aiming to propose, its Republican counsel said. The rulemaking notice being worked on by the commission doesn’t seem likely to be finished soon, said an aide to Senate Communications Subcommittee Chairman John Kerry, D-Mass. Both aides, who spoke at the Cable Show Tuesday, said an earlier panel demonstrated that cable operators and programmers are trying to make content more accessible to subscribers. (See separate story in this issue.)

Rep. Doris Matsui, D-Calif., plans Tuesday to reintroduce her broadband adoption legislation to create a USF Lifeline program subsidizing high-speed service for low-income Americans, a Matsui spokeswoman said. Matsui is a member of the House Communications Subcommittee. This year’s bill is largely the same as HR-3646 from the 111th Congress, but adds a provision to prevent duplication of subsidies. The bill may have to overcome concerns about government spending and balancing support to urban and rural areas.