Large and mid-size telcos have moved closer together on Universal Service Fund and intercarrier compensation regime reforms, but several questions remain -- as does the gulf between small rural carriers and the rest of industry, the public record shows and FCC officials told us. Executives from USTelecom, Windstream, CenturyLink, AT&T and Frontier met with wireline advisers to three commissioners last week, USTelecom Vice President Jonathan Banks said in an ex parte notice filed late Friday. The executives were invited in by the staffers, two FCC officials said. The executives said they have agreed in principle to reforms that roll out in stages over several years, the officials said.

Rural telco associations are urging their members to swarm the FCC and Capitol Hill as part of an all-out effort to help shape the pending Universal Service Fund and intercarrier compensation regime reforms. “All three associations are working to get as many member companies to Washington, D.C., as possible over the next two or three months to pull out all the stops in conveying to policy-makers both their general concerns about reform as well as details on the specific impacts of the FCC’s reform proposals,” NTCA, OPASTCO and the Western Telecom Alliance told members in an email blast late last month.

Advocates of special access reform said their patience is wearing thin as the long-awaited FCC data request continues to founder. “From the customer point of view, this delay has been unconscionable,” said Levine Blaszak telco lawyer Colleen Boothby. She represents the Ad Hoc Telecommunications Users Committee, which includes NTCA and other special access customers, such as banks. The commission promised her clients that a second data request would be out by last January, Boothby said. “There’s always some reason for why there’s a delay in the process,” she said. “Every dollar businesses can save by not paying exorbitant special access rates is a dollar they can put into the economy, into creating jobs.”

A handful of rural rate-of-return telco executives took aim at the USTelecom-led efforts to create cost models for Universal Service Fund and intercarrier compensation regime reforms, an ex parte notice released Monday showed. USTelecom had brought in analyst CostQuest to create cost models as it continues to lead industry-wide talks on wholesale reform. CostQuest executives have been sitting in on ex parte meetings since at least May to discuss some of their findings (CD May 24 p14).

USTelecom and top lobbyists from its members urged “measured reform away from the current intercarrier compensation system,” the association said in an ex parte notice released Monday. Windstream’s Eric Einhorn and Mike Rhoda, Verizon’s Kathy Grillo, AT&T’s Hank Hultquist and USTelecom’s Jonathan Banks met last week with Chairman Julius Genachowski’s wireline adviser Zac Katz and Wireline Bureau Chief Sharon Gillett and bureau officials Carol Mattey, Rebekah Goodheart and Amy Bender. The lobbyists said they advocated “a set of steps to harmonize and reduce intercarrier rates,” the ex parte notice said. “As intercarrier revenues fall due to rate reductions, this potential framework would provide companies an opportunity to recover these revenues from other sources -- including, in part, from an explicit fund -- for some period of time.” The filing didn’t lay out specific terms, but industry-wide talks on intercarrier comp reform have discussed anywhere from a three-year transition to a decade or longer transition to an all-Internet Protocol network.

Cost and support models “can be used to establish an efficient level of costs and determine appropriate support levels in targeted high-cost rural areas,” U.S. Cellular said in a meeting with top FCC staff, the company said in an ex parte notice filed Thursday. The company was joined by executives of CostQuest, a modeling firm currently working for USTelecom in the ongoing industry-wide talks for universal service reform. U.S. Cellular also “reiterated its earlier advocacy that fixed broadband and mobile broadband should both be supported, ideally in separate funds,” the company said.

Members of USTelecom have come up with “a potential framework for reforming universal service,” USTelecom said in an ex parte notice released Thursday. Executives from Windstream, Verizon, AT&T and USTelecom said they met with Chairman Julius Genachowski’s wireline adviser Zac Katz as well as Wireline Bureau Chief Sharon Gillett, Gillett’s deputies Carol Mattey and Amy Bender and Michael Steffen of the general counsel’s office, the notice said. The officials said their proposal would provide “support for the construction and operation of broadband networks in high-cost areas” through “explicit and matched obligations within the budget of current high-cost funding programs.” They “emphasized that this approach would provide support in high-cost areas, some of which may be unserved today and some of which may be currently served due, at least in part, to legacy support mechanisms,” USTelecom’s Jonathan Banks wrote in the notice. “Such a framework could increase the efficiency of support by calculating and distributing support on a more granular geographic basis than is typical of today’s universal support programs and by distributing broadband support to only those high-cost areas where no unsupported company is providing adequate broadband service."

A House panel approved a fiscal-year 2012 appropriations bill banning the FCC from using government funds to carry out the agency’s December net neutrality order, and trimming the commission’s budget to $319 million, down $17 million. Earlier Thursday, the House saved the Rural Utilities Service broadband loans program from the chopping block by voting for a surprise amendment to the FY 2012 agriculture appropriations bill by Reps. Chris Gibson, R-N.Y., and Bill Owens, D-N.Y.

CHICAGO -- The FCC’s overhaul of the Universal Service Fund and intercarrier compensation system may take a little longer than had previously been anticipated, an aide to Chairman Julius Genachowski said at the Cable Show in Chicago. Finishing an order on the subjects may take until the fall, said Sherrese Smith, who advises Genachowski on media issues. “I'm only talking about a month or two delay,” not a longer period of time, she told us during a Q-and-A Wednesday. She also said an item on program carriage will be out soon.

AT&T supported comments by both CTIA and USTelecom on proposed changes to the FCC’s regulatory fees regime (CD June 6 p8), in reply comments filed at the commission. USTelecom is correct that an overhaul is overdue because of sweeping changes in the nature of the industries the agency regulates since the current schedule was established 17 years ago, AT&T said. But any changes must comport to Section 9 of the Communications Act, which covers the assessment of such fees, AT&T said. “As CTIA and others have explained, the Commission’s proposal requiring CMRS providers to double-pay regulatory fees -- once on a per-subscriber basis and again on the basis of their interstate telecommunications services revenues -- would contravene section 9,” the carrier said. If changes the FCC proposes in a public notice are adopted, wireless carriers would have to pay combined fees of $52 million on a per subscriber basis, plus an additional $108 million based on their interstate telecommunications service revenue, AT&T said: “This unprecedented double-assessment would more than triple their annual regulatory fee burdens."