A possible FCC decision to reconfigure video relay service rates may be illegal, said Sorenson Communications, the biggest U.S. VRS provider, in comments this week at the FCC. The commission is considering an early change to rates used to determine compensation for VRS under the interstate telecom relay service fund (CD June 26 p6). The agency is currently following a three-year interim rate plan set by the National Exchange Carrier Association in 2007.

Web advertisements may have a whole new look once self- regulatory principles from advertising groups are implemented. The Interactive Advertising Bureau, American Association of Advertising Agencies, Association of National Advertisers and Direct Marketing Association released rules for behavioral targeting Thursday. The Council of Better Business Bureaus (CBBB) and DMA have agreed to implement “accountability programs” so the targeting universe of advertisers, ad networks, ISPs and others adopt the seven principles.

The administration’s broadband grant rules are likely to attract a sizable number of qualified applicants, said lawyers, analysts and advocacy groups Thursday. But many held off on commenting on the rules until they could study the detailed notice of funding availability released Wednesday (CD July 2 p13) in more depth. Several praised the rules for setting criteria that will ensure projects are financially viable, and will funnel services to areas most in need of broadband.

CTIA, USTelecom, CEA and other industry groups warned in court briefs that legal challenges ASCAP has brought against Verizon Wireless and AT&T could have a chilling effect on the use of musical ringtones. ASCAP asserts in the cases that whenever a musical ringtone goes off in public, it is in effect a performance and violation of copyright law even though the wireless company has already paid a licensing fee.

A decision on an options memo, which started circulating at the FCC last week asking what should be in any special access data request, could come relatively quickly, industry and commission officials said. The Wireline Bureau circulated the memo while Michael Copps was still acting chairman (CD June 29 p1). A special access investigation is one of several dozen items awaiting attention by Chairman Julius Genachowski, though it could be moved to the front of the pack, officials said.

Bucking a view that overhauling special access is just a concern of competitive phone companies, the National Telecommunications Cooperative Association endorsed pro- regulation positions of the new NoChokePoints Alliance (CD June 23 p1). In a letter late Wednesday, the association asked the FCC to collect information from Qwest, AT&T and Verizon “and then to act on imposing necessary regulations to restrain anti-competitive pricing and conduct for special access services.” It rejected “as punitive and irrelevant” a USTelecom proposal to collect data from schools, hospitals and businesses of all sizes. Lack of special-access competition reduces the availability of affordable broadband in rural areas, the NTCA said. Many small incumbent local exchange carriers rely on large incumbents’ circuits to provide broadband in rural areas, it said. But there’s “minimal, if any, choice of special access carriers in many rural areas” and no price declines, discounts or flexibility on terms, it said.

Three House lawmakers introduced a bill (HR-3011) that would repeal the federal excise tax on communications services. The IRS stopped enforcing the toll portion of the tax in 2006, after several court rulings, but the tax still applies to customers who subscribe only to local phone service. USTelecom applauded the bill, saying the outdated tax hurts lower income and elderly consumers the most. The legislation was introduced by Reps. John Lewis, D-Ga., Dean Heller, R-Nev., and Gerry Connolly, D-Va.

The FCC should stop “excessive” special-access pricing by AT&T and Verizon, the NoChokePoints Alliance, a new coalition of competitors and customers of the big phone companies (CD June 18 p7), told reporters Monday. “Releasing the broadband economy from the choke hold these huge phone companies have on the special-access market will be a catalyst for innovation and investment in the broadband marketplace,” said spokeswoman Maura Corbett. The coalition’s statement prompted a flurry of counter-statements from incumbent local exchange carriers and others.

Government needs to play a much larger role in getting broadband to the most rural consumers if this country “is serious” about making the Internet ubiquitous, said Daniel Mitchell, vice president of legal affairs for the National Telecommunications Cooperative Association, a trade association that represents small rural providers. He spoke at the Pike & Fischer broadband conference Thursday.

The FCC should immediately “reregulate” the special access market, and reject arguments by USTelecom and others that an FCC data request is needed, said Public Knowledge, Media Access Project, New America Foundation and U.S. PIRG. In a Wednesday letter to acting Chairman Michael Copps, the public interest groups said no new data is needed to see that the FCC’s 2000 decision to deregulate the market “has resulted in higher prices and market dominance by incumbent providers such as Qwest, AT&T and Verizon.” USTelecom’s effort to spur a new data request is “a transparent delaying tactic designed to prolong for as long as possible the extraction of monopoly rents by its members,” they said. If the FCC decides more information is needed, it should compel it from USTelecom members, they said. “If this information indicates that potential competitors have not been forthcoming about their services, the Commission has the power to compel responses from them as well.” Any data request should be “short and clearly targeted,” they said. “It’s somewhat ironic that Public Knowledge is asking the FCC to take action without the knowledge and data necessary to make an informed decision on such a complex and important issue,” said a USTelecom spokesman. The current deregulatory policy has resulted in $120 billion in private-sector investment over the past two years, he said. “We should be focusing constructively together on continuing this investment, not reverting to failed policies that held it back.”