The FCC should “immediately” tackle phantom traffic and traffic pumping but should provide “careful transitions” as it reforms the Universal Service Fund and intercarrier compensation regimes with “great care,” USTelecom said in comments posted to dockets 10-90, 09-51, 07-135, 05-337, 01-92, 96-45 and 03-109. “Until targeted universal service support provides sufficient explicit funding for networks in high-cost areas, any mandated rate reductions must be coupled with a reasonable opportunity for providers to replace the revenues lost … through a combination of increased retail rate flexibility and a supplement fund,” USTelecom said. USTelecom is leading talks to try to come up with an industry-wide reform. But the commission has made clear that it wants to move to orders on USF and intercarrier comp distribution by the end of the summer. “Intercarrier compensation reform must be accomplished by providing opportunities for carriers to replace lost revenues in order to allow the continuation of support for networks, particularly those in high-cost rural areas,” USTelecom said in Monday’s comments.

Four commenters weighed in on the Paperwork Reduction Act implications of the FCC’s net neutrality order. USTelecom, CTIA, NCTA and the Independent Telephone and Telecommunications Alliance (ITTA) raised questions about the transparency requirements in the rules, saying they should be rejected by the Office of Management and Budget as too burdensome and expensive. A split commission approved the order in December, but it hasn’t been in the Federal Register because of the act’s comment cycles. The Court of Appeals for the D.C. Circuit has already turned aside a court challenge because the rules have not formally been posted (CD April 5 p1).

Rep. Cliff Stearns, R-Fla., called for major reforms in how the FCC does business. The chairman of the Commerce Committee’s Oversight and Investigations Subcommittee spoke Tuesday at a Free State Foundation event. Stearns said change is overdue and promised his subcommittee will focus on regulatory reform in a series of upcoming hearings.

USTelecom’s proposal on dealing with phantom traffic was backed by CenturyLink Vice President Melissa Newman and NTCA Vice President Michael Romano. “It’s a great starting point,” Newman said Wednesday at the FCC’s day-long workshop on intercarrier compensation overhaul. The plan would create per-minute benchmarks for calls to signal what some in the industry call phantom traffic. “It’s all about costs and volumes and the original premise of these tariffs in rural areas was based on low volumes,” Newman said: She hopes FCC officials realize that “there’s agreement on this panel."

Clarification: Talks among a broad range of parties to find an industry consensus on intercarrier compensation and Universal Service Fund overhaul have been ongoing for some time (CD April 5 p4). The USTelecom-led talks are aimed at giving carriers a change to recoup some losses from reductions in access charges and to aim universal-service support better at high-cost areas. Gary Epstein, retired from Latham & Watkins, now works at the Aspen Institute.

AT&T and USTelecom are trying to revive dormant efforts to create an industry-wide proposal on Universal Service Fund and intercarrier compensation regime reforms ahead of the FCC’s rigid schedule, multiple industry officials told us. Similar efforts have foundered in the past -- including a concerted attempt in 2006-07 -- but this time, “I think there is a possibility for a very broad industry coalition on this,” said USTelecom Vice President Jon Banks. “The FCC knows we're trying to do this,” he added. “Everybody -- ILECs, CLECs, cable wireless, rurals -- is trying to put together a path for the FCC to follow.”

Giving ILECs a break on pole attachment rates could help save $100 million yearly in broadband subsidies, USTelecom wrote FCC Chairman Julius Genachowski. “While quantifying the benefits to the Connect America Fund requires some assumptions, we estimate that approximately one-third to one-half of the current unreasonable electric utility pole attachments are in rural areas,” President Walter McCormick said in the letter, released late Thursday. This suggests “that a strongly and clearly articulated reduction of ILEC attachment rates to the cable benchmark” could reduce the burden on the Connect America Fund “by more than $100 million each year,” he said.

Many cable companies backed a “telecom rate” for pole attachments last week, as the FCC got set to vote April 7 on an order that could lower rates some attachers pay to utilities (CD March 9 p5). Bright House Networks, Charter Communications and Comcast were among those that held lobbying meetings with agency officials, filings in docket 07-245 show. Comcast said it backs the rate formula in a rulemaking notice, and its conclusion that the telecom rate is consistent with Section 224 of the Communications Act. The company said it’s concerned about proposals to change unauthorized attachment and safety violation standards. Currently, telco pole attachment rates are often higher than cable rates.

The FCC should match funds to its “specific broadband objectives” as the commission moves ahead with Universal Service Fund and intercarrier compensation reform, USTelecom and other telcos said in a meeting with commission staff. Windstream’s Michael Rhoda and Eric Einhorn, AT&T’s Joel Lubin, Verizon’s Maggie McCready and USTelecom’s Jonathan Banks met with staff Thursday, according to Banks’ ex parte notice. It was posted Tuesday to docket 10-90. “We discussed the need for a fund designed to support explicitly the delivery of broadband and voice services in high-cost areas as efficiently as possible and stressed the importance of matching funding with the specific broadband objectives that would be contemplated by such a fund,” the filing said. While the lobbyists recognize the need for “careful transitions” to a broadband fund, “relatively rapid movement to reform … would help provide certainty to industry,” it said.

The Alliance for Fair Pole Attachment Rules urged the FCC to reject a USTelecom proposal to create a right to regulated attachment rates for ILEC attachments on electric utility poles. The alliance includes American Electric Power, Duke Energy, Florida Power & Light, Progress Energy and Southern Co. The commission should acknowledge that the Communications Act deprives ILECs of rights as attachers, the alliance said in an ex parte filing.