As the telecom world shifts, so does the role of states and that of regulation, panelists told regulators and staff Tuesday gathered at the NARUC Washington meeting to discuss the future of telecom, with a focus on NARUC’s new telecom task force of state commissioners. CompTel Vice President-Regulatory Affairs Karen Reidy reiterated CEO Jerry James’ keynote message (CD Feb 5 p10) that states should oversee IP-to-IP interconnection agreements. “Bandwidth management will continue to increase,” said Home Telecom Senior Vice President-Corporate Operations Keith Oliver, who noted voice alone may no longer need the same regulation as before: “The gigabit home is coming.” CTIA Vice President-Regulatory Affairs Chris Guttman-McCabe observed how much regulation over wireless differs from state to state but said CTIA works with state legislators regardless “and that will continue,” IP transition or not: Such dialogue is “good for the consumers and good for the country.” D.C. Public Service Commission Chair Betty Ann Kane told him that those pro-consumer gestures often happen at the urging of regulators, citing specific examples. “Should regulation be looked at and removed when there’s competition? Yes,” said NCTA Vice President-State Government Affairs Rick Cimerman. He said lack of competition was the basis for regulation, then backtracked to specify he meant “economic regulation” when commissioners questioned him and cited counter-examples. USTelecom Vice President-Industry and State Affairs Robert Mayer pointed to Google Fiber regulation fears: “The decision to not provide traditional voice service as we know it was because the regulatory burden was too onerous and it discouraged investment,” he said. Cimerman said states will have a role but it may not be at the PUC level, and described himself as enormously optimistic for the U.S. tech future, in contrast to the pessimism he said he heard from some others. USTelecom’s Mayer predicted telecom competition will expand, while Home’s Oliver doubted landline broadband would have much competition. The Colorado Office of the Consumer Counsel’s Bill Levis advocated for a strong state role in ensuring basic service and emergency communications.

A order on circulation at the FCC grants several unopposed items in USTelecom’s request for forbearance of several “outdated” legacy telecommunications regulations, FCC officials told us Tuesday. The Wireline Bureau will put out an order in the next day or two granting an additional 90 days to decide on the other items in USTelecom’s petition, the officials said. In its 73-page petition, USTelecom sought relief on an industry-wide basis from more than 150 rules, some of which the commission had already identified as unnecessary in its Biennial Review report (CD Feb 17p14).

Conflicting language in the USF/intercarrier compensation order could leave price-cap telcos unable to recover their costs, companies are telling the FCC. The price-cap companies are responding to FCC requests about the potential impact on subscriber line charges (SLCs) if they use Interstate Access Support (IAS) to build and operate broadband networks instead of reducing SLC levels, according to ex parte filings posted Friday. USTelecom and ILEC representatives met with the Wireline Bureau in December to discuss an apparent conflict in the USF/intercarrier compensation support order. Some language appeared to direct carriers to allocate frozen IAS and interstate common line support (ICLS) to the calculation of interstate access charges, USTelecom said (http://xrl.us/bod6t2). Other language appeared to direct carriers to spend that money on building and operating broadband networks in certain areas, the association said. “The industry noted to the Commission that the same funding cannot be applied to both purposes at the same time.” USTelecom urged the bureau to clarify that the USF/ICC order language should be used “to compensate carriers for required reductions in interstate access charges and mandated limits on end-user charges.” If carriers must use a third of their frozen IAS toward broadband rather than constraining end-user charges, they would have to raise other charges, which could harm voice customers, USTelecom said. Verizon’s filing said that because potential SLC increases are capped, the telco couldn’t recover the entire amount of IAS if it were redirected to broadband networks (http://xrl.us/bod6uv). Verizon said almost $13 million would remain unrecovered for Verizon alone.

USTelecom supported reinvesting the $185 million in unused Connect America Fund Phase I money, in comments filed Monday with the Independent Telephone & Telecommunications Alliance and the ABC Coalition (http://xrl.us/bodeec). A proposal to allow carriers to build “second mile” fiber to neighborhoods to increase broadband speeds is “most likely to advance the goals of the CAF Phase I program,” the group of ILECs said. They estimated the plan would double the number of households for which carriers would be able to receive funding. They said they supported the FCC’s proposal to allow carriers to accept additional funds to target consumers and businesses that are in areas unserved by broadband that meets the 4 Mbps downstream and 1 Mbps upstream standard. This approach would more closely align the program with the commission’s broadband, the comments said. “The potential benefits of the modifications presented today by the price cap carrier community are huge,” said ITTA President Genny Morelli. “These benefits, in the form of significantly increased levels of rapid broadband deployment to rural consumers throughout the United States, will pay substantial dividends for years to come.” But the American Cable Association said the FCC should “stay the course” and not expand the Phase I CAF criteria. Phase I was designed “to reach a significant number of relatively low-cost locations with up to $300 million in federal support,” said ACA CEO Matthew Polka in a statement. “With the funding allocated last year, the program’s stated objective is in the process of being achieved. Until that is no longer the case, the FCC need not substantially alter the program.” NCTA encouraged the commission to open up the fund to “any interested provider willing to bring broadband to unserved customers” (http://xrl.us/bodeek). Rather than continuing to give Phase I money to ILECs only, “the Commission should focus on the actual goal of universal service support: providing service to consumers,” NCTA said.

The telecom industry was sharply divided on AT&T’s petition to eliminate legacy interconnection rules, as the U.S. telecom infrastructure moves toward all-Internet Protocol services. ILEC comments supported the petition, which would start with deregulatory “experiments” in various wire centers to gauge the technological and competitive effects of eliminating several ILEC obligations. Carriers and cable companies cautioned against eliminating interconnection requirements in the Telecom Act that they say protect consumers and competitors. The CLECs were split on a competing proposal by NTCA, which seeks an omnibus proceeding the association said would retain consumer-friendly regulations and incentivize IP interconnection. State associations and commissions worried about ensuring consumer protections as well as maintaining their own authority. Public interest groups were wary of AT&T’s petition, but several minority groups encouraged the idea of limited deregulatory trials to determine the effect on minority customers.

Telcos and cable companies said there wasn’t enough time to sift through the hundreds of thousands of National Broadband Map (NBM) challenges by the filing deadline for reply comments in docket 10-90 Thursday. The proceeding seeks input on the process of challenging the map’s designations. The cable and phone companies agreed a new, more formal challenge method was needed, but disagreed on the specifics. In comments earlier this month, cable companies and price-cap carriers criticized the NBM as “grossly” overinclusive and underinclusive depending on where one looks (CD Jan 11 p7). The map is used to determine where Connect America Fund Phase I money can be distributed. Price-cap carriers get access to the money to help fund broadband buildout in areas the map lists as unserved.

NARUC will tackle spectrum sharing, emergency communications coordination and the FCC’s “repeated abuses of informal rulemaking,” according to draft resolutions released this week (http://xrl.us/bob6pm). State regulators will consider the resolutions at their winter meeting in Washington in February. The proposed resolutions delve into past controversial territory, such as addressing FCC referral to the Federal-State Joint Boards on Separations and Universal Service. USTelecom objected to joint board referral provisions at the past two NARUC meetings, in Baltimore in November (CD Nov 14 p5) and Portland, Ore., last July (CD July 25 p8), although both of the resolutions passed.

U.S. Sen. Chuck Schumer wants the FCC to release money for broadband deployment quickly and with flexibility. “These [Connect America Fund Phase I] rules are so restrictive that it is difficult for carriers to utilize them to deploy broadband in my home state of New York; but the problem is not localized to our region,” the New York Democrat told FCC Chairman Julius Genachowski in a Wednesday letter. “There is clear evidence that more flexibility is needed because the rules have left and will continue to leave significant portions of the money on the table -- and therefore not working on the ground to get broadband to the consumers and businesses who need it.” Frontier Communications has struggled with investing federal money in the Hudson valley but can’t due to “restrictions,” Schumer said in a release (http://xrl.us/boa8xg), referring to how the FCC currently will only “unlock this funding for companies that can provide broadband for less than $775 per household, and only in specific types of areas.” “We agree with Senator Schumer regarding the need for additional funding for providers to deploy more broadband to unserved and underserved Americans,” a Frontier spokeswoman told us. These rules, affecting $185 million of unclaimed Phase I money and $300 million for this year, need to be “restructured,” he told Genachowski. Frontier would bring broadband to Orange and Sullivan counties if it had more flexibility, he said. Schumer cited support from Orange County Executive Ed Diana, Focus Media CEO Josh Sommers, Hudson Valley Economic Development Corp. President Mike Oates, Sullivan County Legislators Kitty Vetter and Cora Edwards, and Sullivan County Industrial Development Agency Chairman Ira Steingart. He applauded the FCC’s recent notice of proposed rulemaking (http://xrl.us/boa9bv) and its sentiment: “The CAF rules should be refined to enable price cap carriers to bring service to unserved and underserved households as quickly as possible,” the letter said. Comments are due to the FCC Jan. 28 and replies Feb. 11. These comments will be used to further the FCC’s “overarching goal to use available funds to rapidly and efficiently deploy broadband networks throughout America,” the Dec. 28 Federal Register summary said (http://xrl.us/boa9cd). USTelecom is “encouraged” to see Schumer’s support in refining these rules and speeding deployment, President Walter McCormick wrote in a Thursday blog post (http://bit.ly/V8CNIK) that focused on how Schumer’s suggestions reflect Genachowski’s recommendations. McCormick praised the benefits of the FCC potentially “putting these CAF funds to work this spring.” The FCC declined comment.

Before the FCC can implement its Connect America Cost Model, it must settle a more fundamental question than what capabilities should be added to the model, said commenters on a December rulemaking notice on the features. The real question, they said in filings and interviews, is whether to use a greenfield or a brownfield approach to estimating costs. “Of any changes that could be made to the model, this is by far the biggest,” said Ross Lieberman, American Cable Association vice president-government affairs. The ACA has been a primary proponent of the brownfield model, one option offered in the latest version of the CACM.

Sen. Jay Rockefeller won’t run for reelection after his term expires in 2014. The announcement came during his speech Friday in the Democrat’s home state of West Virginia. The departure of the five-term, 75-year-old senator will leave a significant leadership void on the Commerce Committee following the recent death of its most senior majority member, Hawaii’s Dan Inouye, and the likely departure of Sen. John Kerry, D-Mass., who has been nominated as secretary of state. Though it’s too early to tell who will succeed Rockefeller as chairman of the committee, Sen. Bill Nelson, D-Fla., appears to be the most likely candidate if Democrats keep the Senate after the 2014 elections, media and telecom lobbyists said.