The disparate lobbying on Universal Service Fund and intercarrier compensation regime reform has continued even as industry-wide consensus building talks press on. Last week, executives from mid-sized carriers CenturyLink, Frontier and Windstream joined an analyst from CostQuest on a conference call with commission staff to lobby on Universal Service Fund reform, CenturyLink said in an ex parte notice released Monday in docket 10-90. The telco executives urged “immediate adoption of reforms that would redistribute ongoing support within price cap carriers’ areas based on cost conditions in individual wire centers, rather than costs averaged across study areas or entire states,” the ex parte said. “We also explained how a regression analysis could enable prompt identification of the relative costs to serve price cap carriers’ individual wire centers,” the ex parte said. CostQuest has recently been retained to help industry come up with cost models as companies and trade associations try to come up with an industry endorsed universal service reform package (CD June 6 p1).

Finishing public safety network legislation before Sept. 11 will be a challenge, said Senate GOP aides at an event Thursday hosted by Politico and Microsoft. The Senate Commerce Committee approved the spectrum bill (CD June 9 p2) by Chairman Jay Rockefeller, D-W.Va., and Ranking Member Kay Bailey Hutchison, R-Texas, on Wednesday. But the bill must still get floor time in the Senate and win over House Commerce Committee Republicans who are skeptical of giving away the 700 MHz D-block for free to public safety, the aides said. Also at the event, an FCC aide provided an update on the agency’s work revamping the Universal Service Fund.

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.