There’s no reason to expand telecom outage reporting mandates from traditional phone service to VoIP, broadband and backbone service providers, said all corporate filings to the FCC. There are major differences between outages on public switched telephone networks (PSTN) and on broadband and other newer networks, associations and companies said. But states said such outage reporting is needed, given increasing reliance on VoIP to make calls instead of circuit-switched phone networks, and because Internet networks carry calls to 911. The FCC proposed (http://goo.gl/09KYY), amid concerns of Commissioner Robert McDowell, to extend Part 4 rules to ISPs, backbone services and VoIP for outages of at least a half-hour (CD May 13 p9). Comments were posted Monday and Tuesday in docket 11-82 (http://goo.gl/boqUK).

Northern Valley Communications and Kentucky Telephone complained about rules designed to curb “so-called ‘access stimulation,'” in an ex parte filing in docket 01-92. “Ultimately, at a time when the nation’s economy remains in peril and the Chairman is focused on how technology and innovation can create jobs for Americans, the rules proposed by the FCC are unwarranted,” the companies said. “These proposed new regulatory burdens would serve only to kill jobs in rural America, and by attacking free conference calling services would make it more expensive for small businesses and entrepreneurs to collaborate on their ventures.” The companies also took a look at the USTelecom-brokered agreement on Universal Service Fund and intercarrier compensation reform (CD Aug 1 p1). “While the approach suggested by these carriers has many flaws which counsel against its adoption, we noted that this or similar proposals would effectively moot the need to adopt rules specifically addressed at ‘access stimulation,’ because the industry-wide transition to such low rates would effectively prevent carriers from having sufficient revenues to share with their end user customers,” the companies said.

Windstream’s Q2 profit was $93.2 million, up from $79 million in the same period last year. Though more work needs to be done, the USTelecom-brokered USF proposal is a good start, CEO Jeff Gardner said during an investor call Friday.

FCC Chairman Julius Genachowski’s effort to issue another joint public statement by the FCC commissioners on Universal Service Fund and intercarrier compensation system reform appeared to be in flux late Thursday, agency officials said. Genachowski had hoped to get his colleagues to sign another Web post, as they did in March. Then, the full commission had promised “a busy spring and summer” of reform work and a promise to move to order’s “within a few months” of the comment cycle’s end in May (CD March 16 p10). Commissioners apparently couldn’t agree on language in the proposed new post, the officials said. Efforts to reach Genachowski’s spokesman for comment were unsuccessful at deadline.

The House sponsors of last year’s Universal Service Fund overhaul bill support the FCC acting on the industry USF agreement brokered by USTelecom. Rep. Lee Terry, R-Neb., no longer plans to move USF legislation, aide Brad Schweer told us Wednesday. He said that Terry “will now be encouraging the FCC to produce details that reflect suggestions” proposed by the industry group. Terry’s former co-sponsor Rick Boucher agreed that the commission should move forward on its own.

Nearly all of the telcos that have borrowed from the Rural Utilities Service receive high-cost Universal Service Fund support, RUS said in an analysis (http://xrl.us/bk3xqr). Of the 480 companies that have borrowed for telecom infrastructure, 476, or 99 percent of them, receive interstate universal service cash, the RUS said. More than 70 percent of RUS’ borrowers rely on universal service for more than a quarter of their operating revenue, RUS said. A 5 percent reduction in universal service cash would strand some 98 borrowers, representing nearly $794 million in loans, RUS said. The three largest rural telecom associations, calling themselves the Save Rural Broadband alliance, seized on the RUS filing, saying it was “independent confirmation of a point Save Rural Broadband has long argued -- the FCC’s USF reforms will force many rural broadband providers to either delay their deployment of broadband services or go out of business.” Rural carriers made a separate peace with bigger incumbents last week and filed a “complementary” brief with the USTelecom-brokered industry agreement (CD Aug 1 p1). A spokesman for the three associations said the RUS filing had no bearing on the incumbent compromise.

Rural Cellular Association President Steve Berry sharply criticized the Universal Service Fund/intercarrier compensation proposal formally filed by a U.S. Telecom-organized group of carriers at the FCC Friday (CD Aug 1 p1). He argued it’s a wireline-centric plan that largely leaves wireless in the cold. Berry called the proposal “a joke.” RCA represents small to mid-sized carriers. Satellite broadband companies, who also were not part of negotiations on the proposal, also criticized it Monday. Consumer groups and states’ rights advocates expressed concerns, while executives representing small and mid-sized cable operators expressed support for elements of the plan.

Incumbent telcos were able to bang out an agreement on the Universal Service Fund and intercarrier compensation regime reforms after months of negotiations. The rest of industry said the real debate has only begun. The USTelecom-brokered agreement won a last-minute okay from the three biggest rural telecom associations Friday. Left out of the discussions, though, were cable, CLECs, states’ rights and consumer advocates, many of whom were already slinging arrows at Friday’s announcement. CompTel, XO Communications, NARUC, NCTA, Sprint Nextel and the Rural Cellular Association all issued statements praising the agreement as a step forward but raising substantive questions about the deal.

"The odds favor” the FCC adopting the USTelecom-brokered agreement on the Universal Service Fund and intercarrier compensation regime reforms, MF Global analyst Paul Gallant said Thursday. The so-called framework could be filed as early as Friday (CD July 28 p8). It “would be a neutral-to-positive” for publicly-owned, mid-sized rural carriers such as Frontier, CenturyLink and Windstream, Gallant said. “We also believe the plan would be a boost for AT&T and Verizon by reducing their overall payments into the federal and state subsidy mechanisms.” Despite some opposition, he expects the commission to adopt the USTelecom-brokered deal more or less as-is because FCC Chairman Julius Genachowski has made USF and intercarrier comp reforms “a centerpiece of his National Broadband Plan” and the framework “would redirect federal subsidies from voice to broadband buildout, which is what the Broadband Plan called for.” Also, he said the proposal “has the support of a strong coalition” and Gallant “would not be surprised if it gained additional support” in the next few weeks, and “key legislators have indicated that the FCC is better suited than Congress to reform USF/ICC because of the level of detail required for reform. Congress’s key asks are that rural and urban interests are both clearly recognized, and that the overall USF … not grow larger -- and ideally shrink over time. We think the FCC’s final rules this Fall are likely to satisfy those criteria."

Companies that buy telecom services have “a healthy skepticism” about claims that changes in network technology require changes in regulation, Ad Hoc Telecommunications Users Committee counsel Colleen Boothby said Thursday. Most businesses see claims that switching to all-IP networks means the federal government doesn’t need to regulate the markets anymore as mere “marketing.” Businesses require someone to make sure that infrastructure monopolies don’t drive up prices, she said on a panel at Wiley Rein Thursday. “It’s just a new transmission technique,” she told us later. AT&T Vice President Hank Hultquist, who was more sanguine about the transition away from the PSTN, said policymakers, industry and customers ought to do “a gap analysis” to try to figure out what regulations, finances and technology will be needed as telephony moves to IP. “We need a lot of work by experts and not necessarily the regulatory experts,” Hultquist said. Boothby agreed, saying, “The role of Congress is to give the FCC enough money so they can hire more engineers and fewer lawyers.” But Boothby and tw telecom outside counsel Thomas Jones clashed with Hultquist over whether the Telecom Acts of 1934 and 1996 need to be overhauled. Jones and Boothby said current law is “sufficient” to protect customers and markets. “The extent to which people talk about the need for a new statute, what they mean is the FCC should have less authority,” Jones said. Boothby said that even in IP traffic, there are appearances of competition, but businesses often find that most of the vendors in a given market are merely reselling access from a monopoly. Hultquist, who is active in the USTelecom-led talks to come up with an industry-wide universal service reform package, said he has learned from his involvement that “there are smart lawyers in this town who say the FCC can’t do it.” He and his company agree, but it at least demonstrates that there are gaps in the law, Hultquist said.