Needless regulation threatens democracy, USTelecom President Walter McCormick told a Wednesday Media Institute lunch. “The Internet today is driving tremendous diverse participation in the democratic process in the absence of government management,” he said. The same freedom of speech isn’t present in China, which “manages the Internet,” he said, voicing fear that regulation could stifle innovation. Net management rules aren’t needed because “today, anybody who wants to invest and to offer Internet access is free to do so,” he said. Broadband investment is private sector- based, making it “unique from other significant technologies and infrastructure programs,” he said. In today’s dollars, taxpayers paid about $20 billion per year for 25 years to build the interstate highway, and $10 billion per year on the Apollo space program, he said. “But, last year alone, private companies invested more than $70 billion in North American communications infrastructure,” he said. McCormick’s speech was his first to the Media Institute. “Just a few years ago, the Media Institute probably would not have been interested in having the president of what was then the United States Telephone Association address media issues,” he said. But, in a converged world, “this is no longer the telephone industry, but the broadband industry.” - - AB

Adopting USTelecom-proposed phantom traffic rules won’t impose “unnecessary compliance costs” or undermine broader intercarrier compensation reform, USTelecom told the FCC. In a Thursday letter, USTelecom answered cable and competitive local exchange carrier objections. CLECs One Communications, XO Communications and NuVox opposed a passage that would make CLECs answer ILEC requests to negotiate and arbitrate agreements. CLECs can compel ILECs to negotiate, but ILECs can’t compel CLECs. The FCC must make those “rights and obligations reciprocal so as to ensure a level playing field,” USTelecom said. That would fit with an order involving T-Mobile creating a reciprocal relationship between ILECs and mobile carriers. “The same policy and legal grounds support extending this decision to ILEC-CLEC negotiations,” USTelecom said. USTelecom addressed NCTA questions on the proposal’s technical exceptions. The proposed “signaling rules recognize that there are limited instances where calling party number information is not passed in the network either because existing network equipment does not provide for this or because industry standards or guidelines dictate that it not be passed,” USTelecom said. Limited instances include VoIP networks that don’t use phone numbers, law enforcement mandates and calls from 8YY telephone numbers, it said. NCTA also sought clarification on how USTelecom’s phantom traffic rule would define an unreasonable practice. The proposed rule “does not expressly define the prohibited content,” but “enforcement of the provision is no different than the existing prohibitions on ‘unreasonable practices’ or ‘unfair and deceptive practices’ which the Commission has a long history of interpreting and enforcing,” USTelecom said. Burden would be on the alleging party in a complaint proceeding, it said.

Broadband providers convicted of discriminating against applications or devices would face antitrust remedies under a bill (HR-5994) introduced Thursday by House Judiciary Committee Chairman John Conyers, D-Mich. HR-5994 would require network operators to ensure equal treatment of all content, applications and services.

An Internet-freedom bill in Congress is a work in progress that needs to become more specific, said an executive at a CTIA briefing Friday on rural wireless. “The language in the bills is too vague,” said Brett Glass, president of wireless broadband provider Lariat.net. Drafters of the bill should talk with engineers to learn how their proposal will affect networks, Glass said.

The FCC, as expected, approved a cap on payments to competitive eligible telecommunications carriers under the high-cost Universal Service Fund program. Also as expected, wireless carriers voiced deep concern about the cap exerting a chilling effect on their efforts to participate in the USF program. Wireless attorneys said some carriers may challenge the order in federal court. An accompanying FCC statement issued Friday said the cap clears a path for further reform.

Six telecom groups asked for three extra weeks to file reply comments on FCC universal-service proceedings. The groups want the reply deadline moved to June 9 from May 19, according to a petition filed by USTelecom, the National Exchange Carrier Association, the Independent Telephone and Telecommunications Alliance, the National Telecommunications Cooperative Association, the Western Telecommunications Alliance, and the Organization for the Promotion and Advancement of Small Telecommunications Companies. The time is needed “to develop well-considered and thorough responses to the substantial record amassed in this proceeding,” they said. More than 90 parties commented last month, filing more than 1,000 pages to sift through, they said. In March, the FCC extended by two weeks the deadlines for USF comments and replies (CD March 26 p9).

USTelecom named a former top advisor to Rep. John Dingell, D-Mich., a deputy to Walter McCormick, the association’s president. Alan Roth, former House Commerce Committee staff director and chief counsel, will fill a new position of senior executive vice president, USTelecom said. Starting June 1, Roth will oversee all government affairs, said a USTelecom spokeswoman. Regina Hopper, USTelecom executive vice president, will oversee all other external affairs, she said. Both will report to McCormick. “It’s clear that USTelecom and other incumbent providers are gearing up for [a] tough next two years with growing Democrat majorities” and perhaps a Democrat president, said Paul Raak, legislative affairs vice president for the Independent Telephone & Telecommunications Alliance. “Here at ITTA we are evaluating our strategy for the next two years as well, which will no doubt be challenging.”

FCC Commissioner Robert McDowell announced Monday that he had cast an electronic vote supporting a cap on the high- cost Universal Service Fund. He became convinced that a cap is needed because the contribution factor - the proportion of long-distance revenue that carriers must contribute to the fund -- is again on the rise after declining last year. McDowell’s support gives Chairman Kevin Martin the deciding third vote in favor of a cap (CD April 28 p1). Commissioner Michael Copps previously voted against the cap. All the commissioners but Jonathan Adelstein have voted, sources said.

Sen. Ted Stevens, R-Alaska, introduced a bill late Thursday to solve the “phantom traffic” problem, the focus of a Senate Commerce Committee hearing Wednesday (CD April 24 p2). “It is time for the FCC to pull back the mask and see who or what is behind phantom traffic,” said Stevens, committee vice chairman. The bill, co-sponsored by Chairman Daniel Inouye, D-Hawaii, has bipartisan support and earned praise from USTelecom. “This bill acknowledges that anyone using the public switched network must pay their fair share and provide the signaling information that is necessary to identify the source of the call,” said a statement from President Walter McCormick.

USTelecom said Monday it’s giving environmental tips on its Web site this week to celebrate Earth Day. The tips say telecommuting, online shopping and other broadband uses help the environment.