A plan to reform the Universal Service Fund (USF) with more state control and a cap on growth got Sen. Sununu’s (R-N.H.) conditional backing at a Wed. forum sponsored by the Progress & Freedom Foundation (PFF), which also proposed the reform package. As it stands, the USF program “significantly distorts the marketplace, undermines innovation and limits services to customers,” Sununu said. PFF’s plan correctly aims to limit growth and increase efficiency, he said: “We've got too many programs that are on auto-pilot.”

Telecom manufacturers urged markup of the draft telecom bill in a Wed. letter to House Commerce Committee Chmn. Barton (R-Tex.) and Ranking Member Dingell (D- Mich.). “All interested parties have had sufficient time to review the bill since you made it publicly available nearly 5 weeks ago,” said the letter, signed by 20 firms. Separately, USTelecom wrote Barton and Dingell suggesting that delaying the markup could “jeopardize significant investment in the industry to upgrade networks -- forcing consumers to wait longer for the benefits of meaningful competition.”

The FCC should open a rulemaking to protect ILECs from excessive pole attachment fees charged by electric companies and other utilities, ILECs said in comments filed late Fri. Backing a USTelecom petition, the National Telecom Co-op Assn. said the FCC pole attachment rules “unreasonably discriminate against… ILECs” through an inaccurate reading of Sec. 224(b) of the Communications Act. The section, which once protected only cable systems, was expanded by the Telecom Act to include CLECs and other “telecommunications carriers.” But the Act seemed to exclude ILECs from the “telecommunications carriers” definition, so FCC pole attachment rules don’t cover them. And other language in Sec. 224 uses the term “provider of telecommunications service,” which does include ILECs, NTCA said. Sec. 224(b) “should not and was never intended to be exclusive of ILECs,” NTCA said. BellSouth said “ILECs are increasingly experiencing unfair and unreasonable treatment when seeking to attach to the poles of other utilities.” Energy utilities, not ILECs, own the most poles nationwide, so “the assumption that ILECs are always in a superior bargaining position is simply not the case,” BellSouth said in its filing. Some energy utilities “have demanded excessive rates that bear no relation either to the amount of pole space occupied by BellSouth or comparable increases in the Consumer Price Index,” BellSouth said. USTelecom asked the FCC to clarify that ILECs are entitled to reasonable rates under Sec. 224, urging they be allowed to use Commission pole attachment complaint procedures.

Cablevision’s chairman, bucking the cable industry, renewed support for a la carte, to reduce prices and expand programing options. Charles Dolan said he backed controversial comments Tues. by FCC Chmn. Martin that letting subscribers select the channels they want would benefit them (CD Nov 30 p1). Dolan was joined in his comments by AT&T, which plans to start pay TV sales next year, and USTelecom. “If consumers want a la carte programming, we will be happy to offer it,” AT&T said in a statement. The firm’s stance is dependent on being “able to obtain access to the programming in that manner,” said AT&T. Dolan’s statement said: “Our experience indicates a la carte will result in more affordable service for all. We hope Chairman Martin’s remarks encourage a move by the industry in this direction.” Analysts, however, were skeptical that Dolan’s comments represented the company’s viewpoint. Dolan has made similar comments before, including at a 2003 Senate Commerce Committee hearing on media ownership. “Unwanted programming is being forced into the home, particularly sports programming,” Dolan testified then: “The cable bill at the end of the month is increasing against the customer’s wishes.” NCTA Pres. Kyle McSlarrow, speaking at the same Senate decency hearing as Martin, called mandatory a la carte “a very dangerous idea.” Cablevision and NCTA, of which Cablevision is a member, declined to comment. “Dolan’s opinion notwithstanding, [Cablevision COO] Tom Rutledge controls the cable company’s operations, and we do not think he would support such a position,” wrote Bear Stearns’ Raymond Katz. His note was titled: “Dolan’s a La Carte Comments: Skepticism + a Grain of Salt.” The details of Dolan’s statement “are really murky,” said Vamsi Sistla of ABI Research. Still, he predicted cable may have to move toward a la carte as subscribers acquainted with on demand viewing and customization of Web content demand it. “Customers aren’t going to put up with these packaged deals for too long,” said Sistla: “And that’s what the cable industry is scared about.” - JM

STANFORD, Cal. -- Without new rules for TV and Internet video distribution, incumbents’ power will thwart a technology revolution and hurt the U.S. economy, said a Columbia U. law prof. The tools for change are wide-open compulsory licenses, a net neutrality doctrine and federalized franchising or none at all, Timothy Wu said late Mon. at Stanford Law School.

The FCC should make TracFone Wireless amend its plan for complying with FCC conditions for getting Universal Service Fund support, USTelecom said. Earlier this year the FCC exempted TracFone from a ban on Lifeline program participation aimed at carriers that don’t own facilities. In doing so, the FCC imposed certain E-911 conditions and required TracFone to show how it plans to implement them (CD Sept 7 p2). In its response, TracFone asked the FCC to ease the E-911 conditions, calling strict compliance “burdensome” and no guarantee of “any greater assurance of emerging service availability than would the approach” it proposed (CD Oct 12 p5). USTelecom said TracFone’s compliance plan should specify how the firm will report customers to the Universal Service Administrative Co. and distribute monthly Lifeline benefits to customers, if given ETC status. “If TracFone does obtain ETC status for any state, the Commission should give USAC clear direction on how to distribute Lifeline support for prepaid services,” said USTelecom.

The FCC is evaluating proposals by incumbent LECs on how to address phantom traffic -- in isolation or as part of broader intercarrier compensation (ICC) reform -- we're told. The agency, still examining the issue, hasn’t considered specific action.

Universal service fund (USF) support would be used for broadband deployment, under a discussion draft released Thurs. of a bill by Reps. Terry (R-Neb.) and Boucher (D-Va.). The bill would expand the USF base by requiring payments into the fund by service providers that use telephone numbers or IP addresses or sell network connections. “To change USF, I believe that all who play must pay,” said Terry. He called the draft a vehicle for reform that would remedy “inequities that exist today.” Boucher said he’s seeking comments on the draft by Dec. 23 and plans to introduce a bill next year.

USTelecom offered the FCC a plan to reduce “phantom traffic” by requiring telecom providers to send signaling information identifying themselves and the type of traffic being sent, with FCC penalties for violations. Carriers have become increasingly concerned about terminating such traffic, which lacks identification of the carrier responsible for paying termination costs and/or information on how much the calls should cost. Under the plan, signaling information would be delivered to tandem and terminating carriers along with the calls, so billing could be created and originating carriers identified. USTelecom said in a Nov. 10 ex parte filing that the FCC could “deter signaling manipulation by vigorously enforcing the proposed rules and imposing significant penalties for violations.” The filing outlined a meeting between members of the FCC Wireline Bureau and representatives of Alltel, BellSouth, Hickory Tech, Iowa Telecom, SBC, Smart City Telecom and Verizon. USTelecom told the FCC staffers the proposal “reflects a broad consensus among companies operating in the converged telecom industry.” The group said they agreed phantom traffic isn’t the result of network limitations or disputes among carriers about the appropriate rate for terminating the calls. The signaling information would have to include the telephone number assigned to the calling party, which would determine the “proper jurisdiction of traffic” for billing purposes, USTelecom said. The group is still working out the details of the plan but “we agree that these rules should apply to all traffic on the PSTN” as well as “all traffic destined for the PSTN from other networks.” The basic idea is for carriers to put needed information into the originating signaling stream without having to “deploy new/modified networks just to comply with the rule.” Other parts of the plan: (1) Intermediate providers must pass on without alternation the telephone number information it receives through signaling. (2) Traffic has to be routed according to the Local Exchange Routing Guide (LERG) to “limit providers’ ability to avoid identification of traffic.” (3) Originating carriers must do a local number portability query before forwarding a call, which USTelecom said would “reduce instances where un-queried traffic enters local networks, which can cause non-local traffic to be routed on local trunks and raise questions regarding who or what to bill.” (4) The FCC should assess fines for each violation taking into account “willfulness and recurrence of the provider’s violations.”

Virgin Islands Telephone (Vitelco) and USTelecom told the U.S. Appeals Court, D.C., the FCC is putting carriers “at risk” due to the way it handles suspended tariffs. In oral argument Mon., USTelecom said the FCC “games the system and puts carriers at risk by suspending tariffs to obtain more time than is allowed by statute for review.” After reinstating a tariff, the FCC no longer gives the carrier “deemed lawful” protection which protects them from liability for refunds, USTelecom said in a statement after the arguments. “In denying the ‘deemed lawful’ status to tariffs that have been suspended and then reinstated, the FCC… subverts the streamlined tariff rules” in the Telecom Act, USTelecom said.