The National Broadband Plan’s suggestions for transforming funding support for voice and broadband generated a sharp divide between small, rural carriers and larger carriers that serve both urban and rural districts. The FCC received nearly 100 comments Monday, the deadline for responding to a notice of inquiry and notice of proposed rulemaking on changing legacy support systems, bringing broadband to unserved areas before the Connect America Fund (CAF) is created and using an economic model to target support. The wireless industry also weighed in, with carriers making the case that reforms have to be competitively neutral, not giving wireline any advantages.

FCC data on the Universal Service Fund released by the House Commerce Committee last week (CD July 9 p5) “clearly proves that taxpayers are paying the price” for the government’s delay in overhauling the fund, said Rural Cellular Association President Steve Berry. The commission should cut USF funding for “antiquated technologies and adopt reform mechanisms that reflect consumers’ migration from wireline to wireless,” he said.

House Commerce Committee Republicans criticized the high cost of subsidies under the Universal Service Fund, saying the FCC needs to forget about net neutrality and concentrate on fixing “antiquated voice service subsidies.” That came after the release of information provided to the committee by the commission in response to a June 15 request from Chairman Henry Waxman of California, Ranking Member Joe Barton of Texas, Communications Subcommittee Chairman Rick Boucher of Virginia and Communications Subcommittee Ranking Member Cliff Stearns of Florida.

The House Communications Subcommittee approved Internet accessibility legislation in a voice vote Wednesday afternoon, with a manager’s amendment by Subcommittee Chairman Rick Boucher, D-Va. Boucher said he hoped to offer another manager’s amendment later to address “remaining points of difference,” including those related to video description rules. Meanwhile, disabilities rights advocates were upset after learning the amendment cut out a provision that would subsidize broadband services and equipment for people with disabilities.

Vermont regulators turned thumbs down on a FairPoint proposal for a new regulatory arrangement with the state as part of the company’s Chapter 11 reorganization. The settlement was negotiated with the state Department of Public Service. Earlier, the Maine utility commission approved a variation on the proposal that the Vermont board rejected. New Hampshire authorities are still reviewing the settlement version proposed there.

The FCC plans to complete a USF overhaul next year, said Commissioner Meredith Baker at a Senate Commerce Committee hearing Thursday. Baker and her two FCC colleagues on the Federal-State Joint Board on Universal Service -- Commissioners Mignon Clyburn and Michael Copps -- agreed USF was broken. But they disagreed whether they could revamp USF without first reclassifying broadband transport under Title II of the Communications Act.

The FCC’s “precedents do not clearly establish whether MeetingOne’s IP-based conferencing service is subject to Universal Service Fund contributions,” MeetingOne said in reply comments to its petition regarding USF contributions. The company requested a review of a Universal Service Administrative Co. decision that subjects MeetingOne to contribution obligations for past and future revenue, the FCC said in a public notice. “In the face of uncertainty, MeetingOne has stepped forward of its own accord to ascertain the scope of its obligations.” It “should not have its business obliterated by the imposition of retroactive payment obligations,” the company said. The Voice on the Net Coalition is not taking any position on whether MeetingOne should contribute to USF, “but submits that any commission decision on the MeetingOne petition should specifically delineate the limits of USF application to collaboration and conferencing services,” the VON Coalition said in comments. There continues to be “uncertainty regarding the limits of those information services with respect to collaboration and conferencing. Therefore, the commission should use this opportunity to provide this much-needed clarity."

The “lack of spectrum probably constitutes the greatest threat to a healthy broadband ecosystem in our country 10 years hence,” Blair Levin, Aspen Institute fellow and former director of the FCC’s broadband initiative, said at the NextGenWeb Conference in Washington. There really is no unoccupied spectrum, or “marketing incentives for entities to allocate their spectrum,” he said. The National Broadband Plan’s recommendation for spectrum incentive auctions is aimed at “putting spectrum back in the marketplace,” he said. “If auction proceeds could be shared, the broadband ecosystem would have more spectrum, the entity could perform the same function better and taxpayers could benefit as well.” Levin also discussed the need for Universal Service Fund reform and said “today’s USF creates very significant problems.” He challenged those who have argued that the recommended speeds aren’t sufficient: “What’s not legitimate is to pretend that there are no costs to increasing the speed.” If anyone wants everyone in the country to support higher speeds for people in certain parts of the country, “they should be upfront … about the speeds they want, about their costs and about how they propose to pay for it,” he said. Although the FCC in September released a chart showing that about 70 percent of the country will some day have only one provider capable of delivering 50 Mbps downstream, it is no grounds for an unbundling regime, he said. The chart “is correct in terms of what we know today.” But “it may be wrong five years from now,” due to developments and upgrades from telcos, he said. “The argument for unbundling is premised on a projection that is subject to way too many variables and a policy with a potentially significant downside,” he said.

How universal service fits into Congress’ planned rewrite of the Telecom Act is expected to come up at a Senate Commerce Committee hearing Thursday on the Universal Service Fund, industry lobbyists said Monday. The Senate hearing opens a new avenue of Hill dialog on USF, an issue that lately has been mainly the domain of the House. House and Senate Commerce Committee staff meetings on the telecom law revamp start Friday (CD June 21 p8).

The National Broadband Plan poses a threat to “comparable, affordable voice and broadband service in rural areas,” the National Telecommunications Cooperative Association said in an ex parte filing about a meeting with the FCC Wireline Bureau staff. The threat will result from limiting the Universal Service Fund to support 4 Mbps download and 1 Mbps upload broadband speeds in rural areas, “while promoting 100 Mbps download speeds in urban areas.” NTCA also urged the FCC to consider expanding the USF contribution methodology to include all broadband providers, the association said.