NTCA members are interested in a potential voluntary model-based option for USF support distribution, but have concerns, the association and representatives from several of its member companies told FCC officials Tuesday, an ex parte filing said (http://bit.ly/1447qml). Concerns include the utility and applicability of a five-year distribution term, given that the financing options available for investments in rural networks often involve a timeline of decade or two, and the ability to realize a payback on such investments can take even longer, they said. NTCA members also expressed concern with their inability to plan for 2014 investments or beyond given the uncertainty arising out of quantile regression analysis-based USF support caps, and continuing reconciliation of model data including study area boundaries.

The FCC Wireline Bureau seeks comments on whether the structural separation requirements in Section 64.1903 of the commission’s rules should continue to apply to independent ILECs subject to rate-of-return regulation, it said in a public notice (http://bit.ly/1444DJK). The FCC has already granted forbearance from the rules as they apply to price cap carriers that comply with certain conditions. Comments will be due July 12 in CC docket 00-175, replies Aug. 12.

Representatives of the Rural Iowa Independent Telephone Association met with aides to each FCC commissioner Tuesday to discuss the impacts of the 2011 USF/intercarrier compensation order on Iowa rural independent telephone companies and their customers; Section 54.313 eligible telecom carrier reporting requirements; and rural call termination problems. Adjusting to the impacts of the order “has become a fight for survival for Iowa RLECs,” the association representatives said in an attached slide presentation. RIITA members have much to add to the commission’s “data-driven” analysis of the impacts of the reforms, they said: data on harm to rural economies; the need to hire more accounting staff to deal with reporting requirements; and the accelerated customer churn due to necessary rate increases. The uncertainty caused by the quantile regression formula has frustrated the broadband adoption goals of Section 706, the association said. Members have also seen local businesses suffer as a result of call termination problems, RIITA said: The Iowa Utilities Board is investigating a complaint filed by a medical clinic that was unable to receive urgent calls and faxes.

SoftBank and Sprint Nextel urged the FCC Thursday to sign off on the first company’s proposed buy of 78 percent ownership of the second “without delay.” They said there’s “no factual or legal basis” for Dish Network’s claims Wednesday that the FCC should delay their consideration of the deal through a new public notice and comment period because of SoftBank’s revised $21.6 billion bid. SoftBank and Sprint have already given the FCC “a full description of the changes to the proposed transaction and an analysis of the minimal impact of those changes on the public interest benefits of the transaction,” the companies said. SoftBank’s revised bid offers “many public interest benefits” on top of SoftBank’s proposed investment in Sprint’s network, including expertise in deploying LTE and improved access to technology that will make the No. 3 U.S. carrier more competitive with Verizon Wireless and AT&T, SoftBank and Sprint said. Dish also claimed Wednesday that the FCC needs to conduct additional review because SoftBank’s revised bid will further restrict U.S. ownership in Sprint (http://bit.ly/1a5hujz). That claim is “nonsensical,” SoftBank and Sprint said. “There is nothing in the stockholder’s rights plan that says anything about whether U.S. citizens or corporations can own Sprint stock. Dish’s claim here is but one more attempt to invoke a xenophobic reaction that is wholly at odds with the Commission’s policy to presume that foreign investment from WTO countries is in the public interest.”

The National Tax Limitation Committee slammed California’s LifeLine program and the idea of the state’s high-cost subsidies overall, in a filing at the CPUC, which it publicized in a news release and media call Thursday. “Our cash-strapped State has spent nearly half-a-billion dollars over the past five years on High Cost subsidies,” the filing said (http://bit.ly/11Z2BYm). The California fund, administered through the California Public Utilities Commission, “wastefully duplicates federal programs to subsidize service to poor people,” referring to California’s LifeLine program, it said. California’s program is “in a class all its own” compared to some other “modest” state programs, the committee said. It criticized the fact that California’s program only subsidizes landline service, which it purported was losing ground to wireless. It said low-income and rural residents of California wouldn’t be hurt if California’s universal service program were cut. Prominent California legislators have proposed expanding the state’s broadband funding for both rural areas as well as low-income residents, citing needs that California has yet to serve with its current funding (CD May 30 p7). “The federal Lifeline program is wireless and the state LifeLine program is landline only,” a CPUC spokeswoman said. “You can’t be enrolled in both. So there is no duplication.” She defended the state programs and said they're “designed to help people obtain phone service, which keeps them connected to their jobs or to potential job opportunities, to friends and family, and also for receiving and placing emergency calls.”

Division One of the Arizona Court of Appeals, based in Phoenix, ruled this week that the VoIP service of Cable One is “telecommunications exchange or inter-exchange access” and thus subject to state taxation. It said Cable One connects customers to the public switched telephone network and dismissed arguments to the contrary. Cable One has argued it’s not providing such access and refers to its service as Internet Protocol-enabled. The court said it looked at these terms in practical ways, as it said the Arizona Legislature had intended in past laws: “As long as the facility serves or facilitates the transmission of communications, it is a communications transmission facility.” Cable One had pointed to the FCC’s rulings on VoIP, but the court disagreed on their relevance: “We reject this argument. These authorities concern regulation, not taxation … neither Congress nor the FCC has taken any action to preempt state taxation of VoIP providers.” It remanded the issue to the state’s tax court for more proceedings “consistent with this opinion.”

The Software & Information Industry Association (SIIA) said Thursday that its focus for the rest of 2013 will be on passing legislation to curb abusive patent litigation, working with NTIA to develop an industry-led code for mobile privacy, and keeping its commitment to making data-driven innovation a “top policy priority.” SIIA’s Government Affairs Council met earlier Thursday to determine the group’s policy priorities. SIIA also remains supportive of the Electronic Communications Privacy Act Amendments Act of 2013 (S-607) and global policies that promote cross-border data flows (http://bit.ly/11iI1TU).

AT&T filed an economist-written paper at the FCC Thursday disputing arguments the Department of Justice made in a controversial April filing at the commission on spectrum aggregation and competition (CD April 15 p7). AT&T has mounted a major campaign to argue that it and Verizon Wireless, the nation’s two largest carriers, should not face restrictions on buying spectrum in the incentive auction of broadcast TV spectrum. AT&T CEO Randall Stephenson made that point repeatedly Wednesday (CD June 13 p4). The original filing was by DOJ’s Antitrust Division. “Long-held principles of American antitrust policy dictate that: (a) drastic market intervention (including restrictions on auction participation) be undertaken only when careful, fact-based economic analysis reveals substantial risk of significant competitive harm from inaction, and (b) any intervention be designed to protect competition rather than specific competitors,” the paper said. “The Division’s letter departs from both principles. First, it fails to engage with the large body of evidence and analysis already submitted in these proceedings, instead offering little more than theoretical suppositions and unfounded speculation and then proceeding as if such speculation constituted sound evidentiary analysis. Indeed, rather than engaging with the facts of this market, the Division suggests that the burden is on AT&T and Verizon Wireless to demonstrate that their access to new spectrum should not be restricted. Second, the Division argues for a policy that manifestly favors some competitors over others.” The paper was written by economists including Michael Katz of the University of California at Berkeley and Philip Haile of Yale University.

State and local advocates debated what factors go into successful broadband initiatives, during a Thursday webinar hosted by the National League of Cities, the National Association of Counties, NATOA and the Public Technology Institute. Municipalities wear many hats, said municipal-focused attorney and advocate Jim Baller. Key issues include state barriers and opportunities, paying attention to local needs and conditions and finding local champions to help lead these broadband projects, he said. Fiber has clear benefits worth investing in, said NATOA President Joanne Hovis, who noted that wireline and wireless should be considered complementary services. She described two “very big picture business models” for public fiber -- an institutional model, with government fiber as an economic development platform to spur the private sector, and then a more public-facing model, in which the government brings fiber to the home for those instances where the private sector has not acted. The second model is “far more ambitious, far more risky” but with great potential rewards, she said: “These items are not easy to quantify.” She urged advocates to think of these projects in terms of “public sector metrics” of success. “We really have to think differently about our communities,” said Deborah Acosta, chief innovation officer of San Leandro, Calif. “Everything now becomes connected.” These projects are all about economic development, Acosta said, describing the 100 Gbps capabilities of the Lit San Leandro project, which she called the fastest fiber in the U.S. “Today we have 11 miles lit up.” The project has led San Leandro to rethink how it does business as well as what the role of a CIO should be, she said.

Dish Network and NTelos deployed broadband service in rural Virginia to test delivery of the service within NTelos’s coverage territory. The service will use spectrum in the 2.5 GHz range, Dish said in a press release (http://bit.ly/160yG6v). Broadband service speeds at the initial test sites “are ranging from 20 Mbps to more than 50 Mbps,” it said. For the test, the companies activated two wireless tower test sites near the Virginia towns of Waynesboro and Afton, it said. “Ericsson and Alcatel-Lucent have provided equipment and assisted in the installation.” The pilot is part of the companies’ plan to co-develop a fixed mobile broadband service in Virginia, West Virginia, Maryland and other states (CD May 28 p8).