The FCC should ask whether nonrural carriers should be denied further universal service high-cost subsidies in states with “substantially deregulated” phone rates, said Cable One and Metrocast. In meetings last week with the Wireline Bureau and Commissioners Michael Copps, Robert McDowell and Meredith Baker, the cable companies asked the FCC to include the question in a coming notice of proposed rulemaking on a remand by the 10th U.S. Circuit Court of Appeals (CD Aug 11). In 2005, the court ruled unlawful the FCC’s current nonrural rules, which concern carriers like Qwest that serve high-cost areas with too many lines to meet a statutory definition of “rural.” Cable One and Metrocast said the money “could be redirected to the low-income program” to bring broadband to the unserved. “With funds available for low- income eligible recipients, broadband providers could bridge the broadband gap by providing computers and high speed internet connectivity under an expanded low-income USF program.”

AT&T saw wide support from other carriers on its appeal of a decision by the Universal Service Administrative Co. (USAC), which found that the telco submitted inaccurate line count filings during an audit. USAC uses line counts to determine USF support for carriers. In separate comments last week, Verizon, Qwest, USTelecom and the Independent Telephone & Telecommunications Alliance urged the FCC to revise the quantitative standard that USAC used when it determined that three regional AT&T companies’ noncompliance with FCC rules was “material.”

The National Association of State Utility Consumer Advocates opposed a forbearance petition by Consumer Cellular, the latest prepaid wireless provider seeking an FCC exemption so it can take part in the USF Lifeline program. NASUCA “fully supports increasing the options available to Lifeline-eligible consumers,” but “it does not appear that the Commission can find that forbearance is in the public interest here without more specificity as to how CCI plans to apply the federal support it will receive upon designation” as an eligible telecom carrier, the association said.

Affordability, PC ownership issues and lack of broadband content are barriers for broadband adoption among low-income families, children and others, panelists said at the FCC Broadband Workshop late Wednesday.

FCC Chairman Julius Genachowski said Thursday that he will seek a vote by the commissioners on the national broadband plan before it’s sent to Congress. His comment came in an interview in his corner office, still little decorated, on the FCC’s eighth floor. It had been unclear whether the other commissioners would be asked to sign off on the plan or whether it would in effect be released as a chairman’s report. Genachowski also said providing Universal Service Fund support for broadband should be a top FCC priority.

The Universal Service Administrative Co. asked the FCC Wireline Bureau for guidance on USF caps for AT&T and Alltel, plus five other matters. In a letter Wednesday, requested by the bureau, USAC asked whether caps specific to AT&T and Alltel should have applied before the industrywide interim cap on USF high-cost support took effect. USAC believes that it’s required to carry out the caps from their effective date until they were “superseded” by the industry cap, “because the CETC industry-wide cap was effective prospectively and did not state that it superseded the company-specific caps retroactive.” But “at the written direction of Commission staff,” USAC said, it didn’t enforce the caps specific to the carriers, it said. “If USAC were to implement the company specific caps for AT&T and Alltel, significant amounts of funding previously disbursed would be recovered from each carrier.” USAC also asked for guidance on how to deal with carriers that didn’t maintain records for audit periods falling before an FCC rule on documentation for the high-cost program took effect 2008. The rule required carriers to keep funding receipts five years. USAC said the commission’s guidance would affect about 100 audits. “The potential recovery of support paid to beneficiaries is significant, if the support is deemed improper and recoverable due to carrier failure to comply” with document retention rules, it said. And USAC asked for clarifications on several issues related to reporting and classification of income tax and various types of revenue. FCC guidance would affect the amount of money carriers contribute to the USF and receive from it.

OPASTCO Chairman Mark Gailey, the president of Totah Communications, a small, family-owned phone company in rural Oklahoma and Kansas, called preserving the Universal Service Fund critical to small carriers’ ability to provide broadband services. He testified Tuesday at an FCC broadband workshop along with representatives of other rural organizations and of small business and minority groups.

The FCC Wireline Bureau rejected requests by Global Crossing for review of a February 2007 audit by the Universal Service Administrative Co. Global Crossing was found to have incorrectly reported -- as carrier’s carrier revenue instead of end-user revenue on which the company’s USF contribution assessments are based -- 2004 payments by customers that didn’t contribute to the Universal Service Fund. “The record does not support Global Crossing’s contention that it reasonably expected these customers to directly contribute to the universal service fund as resellers, and therefore we find that USAC’s assessment of contributions on Global Crossing based on revenue from these non-contributing customers was proper,” the bureau said.

The FCC Wireline Bureau granted a request by TeleQuality Communications to waive a commission rule regarding timing of reimbursement for services provided under the universal service rural health-care program. The rule requires waiting until the annual true-up before disbursement of rural health care program dollars. The bureau said there’s good cause to waive the rule, because otherwise TeleQuality won’t be able to sustain operations and provide discounted telecom service to its rural healthcare customers. The bureau told the Universal Service Administrative Co. to make an initial reimbursement payment within 10 days without deducting any USF contributions owed by TeleQuality, and to make any additional payments every two months.

Industry executives and others sought new broadband pricing, spectrum and subsidy program policy, at an FCC broadband workshop late Wednesday. Better access to spectrum, capital and network backbone are among the biggest needs in reaching the unserved and underserved, they said.