T-Mobile agreed to accept a numbers- and capacity-based contribution methodology for USF provided it is structured so it doesn’t discriminate against wireless carriers. T-Mobile, which previously urged a revenue-based approach, said last week in a filing a numbers-based approach would be acceptable if subscribers on family plans don’t have to pay USF fees beyond what the primary subscriber pays. T-Mobile said the FCC should recognize that “the family is an economic unit sharing one ‘bucket’ of minutes and that each family member will need a mobile phone, with its own number, to replace the single wireline number formerly used by the entire family.” T-Mobile also said the FCC shouldn’t assess a monthly fee for prepaid plans, but that any fee should be included in the price at which the cards are sold to customers. On Mon. TracFone, a 2nd carrier, disagreed with T-Mobile’s approach on prepaid plans, saying a numbers-based methodology remains “wholly inappropriate for prepaid wireless services.”

LAS VEGAS -- Ore. PUC Comr. Ray Baum -- chairing a NARUC-sponsored group offering the latest proposal for intercarrier compensation reform -- said he hopes to present a final version to the FCC by May 15. But he conceded that wireless and cable companies are generally unlikely to support that plan, and many members of NARUC and NASUCA have questions. Baum has asked industry to finish its review of the plan and report back by April 21.

FCC Chmn. Martin’s universal service fund plan could cause lower-income seniors to cut back long distance calling, according to a study funded by the Seniors Coalition, which bills itself as an alternative to AARP. Estimating the Martin plan would add $1-$2 monthly to phone bills, the group said 83% of seniors oppose changing the USF fee.

More industries would contribute to the Universal Service Fund (USF), with distributions more tightly controlled, under a bill introduced Thurs. by Reps. Terry (R- Neb.) and Boucher (D-Va.). The bill would allow USF funds to go to pay for broadband services. “Reforming USF is a significant step in closing the gap between rural Americans and urban Americans, allowing for all of America to compete in the global marketplace with both products and ideas,” Terry said in a statement.

Consumers in 12 states would be hardest hit by a proposal before the FCC to move to a numbers-based system for contributing to the Universal Service Fund, the Keep USF Fair Coalition said Thurs. The coalition said consumer bills would go up the most in Cal., Fla., Ill., Md., Mass., Mich., Minn., N.Y., O., Pa., Tex. and Va. In all of those states except Tex. and Minn. “consumers already pay more in federal USF taxes than their states get back for schools, hospitals and rural connectivity and that disparity would grow even wider” under the plan supported by FCC Chmn. Martin, the group said. Tex. and Minn. would move from being USF “winners,” taking in more USF funding than paying out, to being USF “losers,” the coalition said.

The rising cost of universal service subsidies might be stemmed through a new system based on “reverse auctions,” FCC Chmn. Martin said in a Q&A session at a Bank of America conference Wed. in N.Y.C. Martin said the idea, which has been proposed in the past, would let phone companies bid to provide universal service in rural areas, with the winners offering the lowest per-subscriber subsidies. For example, a bidder might say service could be guaranteed at $100 a subscriber, he said. “They'd be bidding on how little subsidy you need,” he said. What’s nice, he said, is that such a system would be technologically neutral.

CTIA, which views USF as one of the most significant regulatory issues for wireless carriers, told the FCC as it crafts new rules for distributing universal service support to Qwest and other “non-rural” carriers that its primary goal must be not to give an advantage to some carriers at the expense of others. The FCC in Dec. sought comment on how to change its rules after the 10th U.S. Appeals Court, Denver, twice remanded the FCC rules for high-cost support, most recently a year ago. “It’s a serious flaw with the current system that it’s based on what carriers spend and not necessarily on where they provide service or who they are providing service to,” Paul Garnett, dir. of regulatory policy at CTIA, said Tues. at the Catholic U. symposium on telecom. “You can end up with a carrier in a very urban or suburban area that happens to spend a lot of money, gets access to high cost universal service support, then have another carrier… that offers service in very rural areas and gets absolutely no universal service support.” Garnett said the CTIA spent about a year developing its numbers-based proposal on USF reform, which represents the group’s “very diverse” membership. “Basing all high-cost universal service support on efficient costs is long overdue,” CTIA said. “Whatever changes are made to the underlying mechanisms, the FCC must ensure that universal service support continues to be distributed in both a competitively- and technologically- neutral manner, as required by the [Telecom] Act. That way, consumers, and not state or federal regulators, will determine who competes for and delivers services to them.” CTIA said the FCC should adopt a “single, simplified, and unified support mechanism,” replacing the 5 high-cost mechanisms now in place. Wireless carriers believe they don’t get their fair share of USF money, the Assn. said, with wireless carriers responsible for some 34% of contributions to universal service, while receiving only about 12% of payments. Dobson Cellular, meanwhile, said in a filing that any changes should follow broader themes of the need for reform. “Through several pending proceedings, the Commission is in the process of considering fundamental reforms to the high-cost program, for both the rural and non-rural mechanisms, as well as possible reform to the overall administration and management of the universal service program,” the wireless carrier said: “Comprehensive reform is needed with regard to all high-cost support mechanisms, and the Commission must take a comprehensive, ‘big picture’ approach to such reform.”

Asked what they would do to increase broadband deployment, a panel of attorneys Tues. offered a panoply of ideas, ranging from tax incentives to better consumer education to more reliance on powerline communications. Some panelists at a symposium sponsored by Catholic U.’s law school Tues. also recommended more dependence on the marketplace and less on regulation, although others said regulators better be sure that marketplace remains open to competition.

The Universal Service Fund hearing set for today (Tues.) on distribution methodologies has been moved to Thurs. at 10 a.m., the Senate Commerce Committee said Mon. The date moved to permit a hearing on port security. The USF witness list will be the same (CD Feb 24 p8). A hearing on VoIP originally set for 10 a.m. Thurs. will be rescheduled, the panel said.

FCC Chmn. Martin and others are using a “phony crisis” to justify a proposal to change how Universal Service Fund (USF) contributions are collected, the Keep USF Fair Coalition told reporters Mon. The group, which opposes Martin’s proposal of a flat collection method based on telephone numbers, said the current revenue-based method isn’t broken. Coalition Exec. Dir. Maureen Thompson released a report she said “debunks the hoax” that USF collection reform is needed. The report shows the long distance revenue base for USF contributions isn’t dwindling, as opponents argue, Thompson said. According to the report, long distance revenue base, $76.6 billion in 2003, is projected to be $78.9 billion in 2006. Projected revenues drop slightly in 2007 to $76.8 billion -- still slightly over the 2003 level, Thompson said in an audio news conference. If needed, the current revenue base easily could be expanded by making it more “technology neutral,” meaning revenue could be added from VoIP and other advanced technologies not directly contributing to the fund now. If that were done, the expanded revenue base for USF would be $104.5 billion in 2006 and $105.9 billion in 2007, Thompson said, calling that a more “common-sense” approach to enlarging the fund. The coalition opposes a numbers-based system because it might lead to higher fees for low-volume users of long distance service. Although contributions to the fund come from companies that offer long distance service through a percentage of revenue, the firms pass the fees onto users. The coalition’s announcement came on the eve of a Senate Commerce Committee hearing on USF contributions today (Tues.). The Pacific Research Institute (PRI) took advantage of today’s scheduled hearing to issue a call for more sweeping USF change. The think tank said the USF has “spiraled out of control,” giving “wasteful subsidies [to] entrenched local carriers.” Rather than expand USF to include contributions from high-tech services such as VoIP, Congress should target needy consumers with vouchers and add rules that “ensure public accountability and safeguard cutting-edge innovations,” PRI said.