No significant universal service fund reform in Congress is likely to be enacted until at least 2007, two members of Congress told a Center for the New West forum Fri. Sen. Craig (R-Ida.) and Rep. Cannon (R-Utah) said other legislative priorities, coupled with the issue’s complexity, make 2007 a likelier timeline for enactment. These members’ evaluation is noteworthy, since neither sits on his chamber’s Commerce Committee. They said their judgments are based on members’ knowledge and attitudes, not on the expert Committees.

Wireless carriers disagreed on whether the CMRS market was competitive enough. As the FCC gathers information for its annual report on CMRS competition, smaller wireless carriers expressed concern about the problems they had experienced in obtaining commercially reasonable roaming agreement with large nationwide carriers. SouthernLinc Wireless complained that Nextel and Nextel Partners -- the only domestic carriers SouthernLinc could roam with -- had repeatedly “engaged in unreasonable roaming practices to the detriment of wireless consumers,” especially those who relied on iDEN networks. It said the FCC “should be aware that there is already market failure for iDEN roaming, and that serious questions remain regarding the availability of roaming in the United States.” Separately, Virgin Mobile said the FCC should focus its attention on “the significant regulatory barriers to entry that threaten the viability of innovative wireless service plans,” instead of technical and economic concerns. It called on the Commission to protect the wireless industry against state and local efforts to “regulate rates, limit wireless products and services to more affluent users and constrain competition.” It also said as the FCC reforms the USF system, it should exempt lower income, lower usage prepaid customers from payment of any USF connections-based fee. Leap Wireless said the CMRS market remained “highly competitive” from the consumer’s standpoint, but it said the Commission should understand the disparity between “the big carriers who possess national market power and the small carriers who do not” and it should “assist the smaller companies in their effort to keep the market competitive.” Dobson Communications and T-Mobile agreed with CTIA earlier comments that the wireless marketplace was “vibrantly competitive.” Dobson urged the FCC to reaffirm its prior finding that “effective CMRS competition exists in rural areas.” T-Mobile said the main concern expressed by rural wireless carriers was about competition from national carriers. “If anything, this demonstrates that the Commission is achieving its goal of increasing competition in rural areas,” it said. T-Mobile said the policy changes proposed by some rural carriers would interfere with competition and its benefits to consumers. It urged the FCC to retain its current licensing rules and avoid intervening in roaming negotiations between rural and national carriers.

Congress is seeking a law that would create a regulatory class for Internet Protocol platforms. It would likely cover services such as VoIP, video over IP and standard broadband, whether delivered by cable providers, phone or power companies. The House will likely seek to keep these services mostly free of regulation, especially by the states. But it will probably try to ensure that VoIP meets public service obligations such as 911 and the Communications Assistance to Law Enforcement Act (CALEA), which would allow police to wiretap Internet phone calls.

Rural telecom groups said Wed. they have “serious concerns” with recommendations for telecom reform by TeleConsensus, a new coalition. TeleConsensus -- which includes SBC, BellSouth, Verizon and NCTA -- was launched Tues. by the U.S. Chamber of Commerce (CD April 13 p6). But the Independent Telephone & Telecom Assn. (ITTA), NTCA, OPASTCO and the Western Telecom Alliance (WTA) said they're concerned about the coalition’s “apparent failure to take into account the distinct needs of community-based providers.” For example, they said, a “consumer voucher system” to distribute USF funds that the coalition backs would be “administratively unworkable and ignores the fact that the single greatest hurdle to high-quality telecommunications service in rural America is high network costs.” They said the voucher system would “inhibit rural carriers’ network deployment ability because there would be no consistent, long-term support for that network infrastructure.” The rural groups complained that the coalition lacks community-based carriers, adding that the firms the group represents emphasize urban areas. “The coalition’s failure to take into account the rural perspective could harm high-tech investment and jobs in those areas and result in policy detrimental to rural consumers and the communities in which they live and work,” the rural groups said.

Senate Commerce Committee Chmn. Stevens (R-Alaska) said Mon. he fears federal funding for school internet services, rural telephone service and library computers could be threatened temporarily. Stevens said a tight calendar could keep Congress from fixing problems the Anti-Deficiency Act creates for the Universal Service Fund, in turn suspending USF payments.

Qwest asked the Neb. PSC to reconsider a March decision requiring facilities-based VoIP providers to pay a state universal service fund contribution on the intrastate portion of their services. Qwest said the PSC order conflicts with federal and state law. It also challenged a PSC finding that Vonage isn’t a facilities- based VoIP provider while Qwest is one. Qwest said the FCC has preempted all state regulation of IP-enabled services like VoIP. Qwest (Case NUSF-40/PI-86) argued that VoIP is an information service, not telecom, and so entirely outside PSC jurisdiction. Qwest said the PSC followed a tortured line of logic in exempting Vonage-type VoIP providers as not facilities-based. The PSC in its order last month had said the FCC hasn’t specifically exempted VoIP from state universal service assessments and surcharges can be levied based on separate prices for the information and telecom components of VoIP service. The PSC said the intrastate portion of VoIP service can be based on actual call data or the FCC’s default safe-harbor allocation.

Bell companies and competitive carriers urged the FCC to deny an AT&T request for stay of the prepaid calling card order pending an appeal filed in U.S. Appeals Court, D.C. The stay would delay AT&T payment of past-due contributions to the universal service fund (USF)and bar phone companies from suing AT&T for unpaid access charges. AT&T has offered to post a letter of credit to secure more than $150 million in USF payments due this month if the stay is granted; opponents said that won’t stop immediate harm to the USF from AT&T’s nonpayment. The FCC’s order (CD Feb 24 p1) told AT&T to pay universal service contributions and access charges retroactively, though carriers would have to sue to get the access payments. AT&T withheld regulatory payments based on revenue from its prepaid calling card service, arguing that it is an exempt interstate information service.

NTCA’s Foundation for Rural Service (FRS) on Mon. unveiled an “educational paper” supporting the Universal Service Fund (USF). FRS presented the paper Mon. during a luncheon on Capitol Hill. Speakers emphasized USF’s importance and how changes to USF have bolstered the program’s scope and size. The paper, “One Nation Indivisible: The Case for Universal Service and Rural Connection in the Broadband Age,” explained USF to the audience of mostly young Hill staffers. The paper, and speakers, asked if the USF fund and the Telecom Act’s goals for competition were compatible. “Is true compatibility possible between universal service and competition in the rural areas served by community based telecom providers?” the paper asked. “Industry experience since the passage of the 1996 Telecommunications Act suggests that success in achieving these divergent policy objectives is illusory, at best. It remains essential that consideration be given to the economics of rural markets, where it is ‘costly’ for one network to serve but ‘doubly costly’ for two.” Speakers said changes in access charge regulations have caused a rise in the USF. The Interstate Common Line Support (ICLS) mechanism, which lets long-distance providers use USF to cover interstate common carrier line access charges, now accounts for nearly 40% of USF funding. Douglas Meredith, dir.- economics & policy for John Staurulakis, Inc., said the policy change has helped fuel USF growth, leading some on Capitol Hill to suggest slashing the program. House Commerce Committee Chmn. Barton (R-Tex.) recently questioned USF’s relevance in light of high telephone connection rates in the U.S.

Congress returns tomorrow (Tues.) after a 2-week recess, but communication issues seem destined to wait at least another week to be addressed. Despite talk of hearings by several committees, none are set for this week. Universal Service Fund, telecom mergers, and IP- enabled video are all topics sources said would likely be subjects of Hill hearings in coming weeks. Industry and Senate sources said the Senate Commerce Committee seemed ready to begin holding hearings on telecom issues. And new FCC Chmn. Martin could make his official Hill debut soon.

The Neb. PSC said VoIP providers are subject to state universal service fund assessments on the intrastate portion of their services. The PSC said the jurisdictional nature of VoIP calls can be found using their ultimate termination point, even though VoIP providers claimed it’s impossible to know where a VoIP call goes. The PSC (Case NUSF-40/PI-86) said if a VoIP provider can’t set a jurisdictional allocation based on a reasonable sampling of actual call data, the PSC will base the assessment on the FCC’s default safe-harbor allocation of 71.5% intrastate and 28.5% interstate. The PSC said this approach won’t put VoIP providers at an unfair competitive disadvantage but will result in “equitable contributions” toward the state USF. The PSC said the FCC hasn’t explicitly preempted states from requiring VoIP providers to pay into state universal service funds. The PSC disregarded VoIP provider claims that no portion of a VoIP call can be deemed jurisdictionally intrastate, and that VoIP as an information service is totally beyond state jurisdiction. The order will take effect April 1.