When the USF was new, Franklin Roosevelt wasn’t halfway through his first term. Even so, the venerable program still has a startling capacity to make news.

The FCC Office of Inspector Gen. (OIG) made “significant progress” in designing and carrying out its Universal Service Fund (USF) oversight program, but “more work remains to be done,” OIG said in a semiannual report to Congress. “The primary obstacle to implementation of effective, independent oversight has been a lack of adequate resources to conduct audits and provide audit support to investigations,” OIG said: “This lack of resources has prevented us from completing the body of work necessary to assess fraud, waste and abuse at the program level.” But progress has been made. OIG added 2 people, bringing to 5 the number of employees dedicated to USF oversight, and expects to get 2 more. OIG said it sought $3.17 million for USF oversight in the FY2006 budget and began to explore alternatives for getting contract audit support. “Through our participation in the fourth large-scale round of E-rate beneficiary audits with USAC and through audits that we anticipate conducting under our 3-way agreement with USAC we are moving forward to evaluate the state of the program and identify opportunities for programmatic improvements,” OIG said.

Rep. Cubin (R-Wyo.) introduced a bill (HR-2533) late Mon. that permanently would exempt the Universal Service Fund (USF) from Antideficiency Act (ADA) accounting standards. The bill is a companion to S-241, introduced by Sens. Snowe (R-Me.) and Rockefeller (D-W.Va.). The ADA bars federal agencies from incurring obligations in advance of appropriations. The FCC last year ruled the ADA applies to the USF, meaning the fund administrator would have to have cash on hand before sending commitment letters to fund recipients. The immediate impact was on the E-rate program, but rural ILECs fear their payments also could be affected. Congress in Dec. passed a bill exempting the USF from the ADA through 2005.

Congress will weigh key technology issues this year. Some bills will stir fierce fights, while industry will get quick wins on others, Rep. Boucher (D-Va.) told the Computer & Communications Industry Assn. (CCIA) Wed. The Congressional Internet Caucus co-founder predicted easy decisions on sweeping patent reform, a hard deadline and subsidy model for DTV transition and Internet-specific Telecom Act updating. But the broadcast flag and digital content reproduction and fair use issues will be more contentious.

An order to require VoIP providers to give customers access to E-911 service is on the agenda for the FCC’s open meeting Thurs., as expected, but it’s not clear if that order will be as strongly worded as proponents want. The order is expected to require VoIP providers to offer adequate access in 120 days, which probably would put the deadline in mid or late Sept. The order probably won’t set any requirements for ILECs to open network facilities VoIP providers say they need to offer full 911 service.

Putting spectrum out, ensuring there’s no interference and getting out of the way is govt.’s appropriate role in the wireless industry, analysts said Fri. at a CTIA Wall Street Analyst Roundtable in Washington. As Congress prepares to rewrite the Telecom Act, legislators should remember the U.S. wireless market is highly competitive and will remain so even after pending mergers, they said. “The government should set the rules and let the market play it out,” said Ovum Wireless Telecom Vp Roger Entner. Until only one wireless carrier remains in the U.S., “I don’t think regulation has a significant role to play in the wireless and I hope the rewrite of the Telecom Act will reflect that view,” he said.

Several telecom groups wrote the Senate Commerce Committee leadership Wed. to express support for S-241, legislation that would permanently exempt the Universal Service Fund (USF) from Anti-Deficiency Act (ADA) requirements. The Committee has held a hearing on the bill (CD April 12 p1), introduced by Sen. Snowe (R-Me.) and co-sponsored by Senate Commerce Committee Chmn. Stevens (R-Alaska), Committee ranking Democrat Inouye (Hawaii), and Sen. Rockefeller (D-W. Va.). No markup’s scheduled for the bill, and the groups urged quick action in the letter. “Given the potential disruption to all universal service programs, it is vital for the Commerce Committee to address this issue as soon as possible, so that the uncertainty that currently hangs over these programs can be permanently eliminated,” the letter said. Since the Office of Management & Budget (OMB) required the FCC to apply ADA rules to USF last year, the program has needed funds in hand to make disbursement commitment. Congress last year passed a temporary one-year exemption from ADA, since it would have resulted in missed payments from USF and the E-rate program. The letter said: “Without such an exemption, millions of people will undoubtedly experience service disruptions and significant increases in the universal service contribution factor.” Signers of the letter include Alcatel, Apple, Independent Telephone & Telecom Alliance, NARUC, NASUCA, National Education Assn., NTCA, OPASTCO, TIA, U.S. Conference of Mayors and Western Wireless.

More than 100 rural telecom executives hit Capitol Hill Tues. to start 2 days of lobbying for universal service and broadband issues as part of an annual event sponsored by OPASTCO. In a morning briefing, OPASTCO staff told rural ILECs Antideficiency Act (ADA) legislation should top their agendas as they visited representatives and senators from their home states.

WILLIAMSBURG, Va -- Comr. Abernathy called for a change in the Sunshine rules to let FCC commissioners meet in private as needed to get consensus on complex issues out of the public eye. Abernathy told the FCBA annual retreat held here Fri. and Sat. that 1970s-vintage rules work against development of policy on critical but complicated issues.

Rep. Terry (R-Neb.) is working on universal service fund reform legislation designed to appeal to rural advocates and House Commerce Committee Chmn. Barton (R- Tex.), a House source told us. USF reform is a major goal of rural telecom interests this session and the issue is high on Senate Commerce Committee Chmn. Stevens’ (R- Alaska) agenda, sources said. But Barton has raised questions about the program and said Fri. an “academic argument” could be made for its elimination, though he admitted the political impossibility of ending the program. The House source said Terry’s bill would be a full restructuring of the USF program, but specific details weren’t available. But the source said Terry’s staff is considering a “hybrid model” for USF contribution that could include elements of a revenue-based system and a numbers-based system. A system of contribution based on telephone numbers probably would create more contributors to USF, since the existing system relies specifically on long-distance revenue. AT&T had backed a numbers-based approach, but it’s unclear whether the proposed merger with SBC has changed the company’s position. Also, FCC Chmn. Martin has spoken in favor of a number-based approach. The House source said the bill would aim to expand the contribution base of USF and try to expand USF’s jurisdiction to allow collection on intrastate calls. Now, only interstate calls can be used in assessing funds. It’s unclear how the bill would handle USF distributions, the source said. The source said the bill wouldn’t address E-rate funding, which Barton wants eliminated. And it’s unclear whether the bill will include a provision to modify the USF’s non-rural high- cost portion. Terry introduced a bill last year that would change how this fund is distributed to large ILECs. Under the existing system, Miss., Ala. and W. Va. ILECs get the most funding, since they serve the most rural consumers. But western states say the fund, which totals about $260 million yearly, should be distributed more evenly to their states since geography and distance raise the cost of deploying telecom service to these rural areas. Qwest would be a primary beneficiary of this change. Sen. Smith (R-Ore.) has introduced legislation (S-284) this session that would make that change.