Legislation allowing municipalities to build broadband networks would “chill private investment,” telecom groups said in letters to House Telecom Subcommittee leaders Tuesday. Legislation that would enable such investment could encourage “cherry picking the easier-to-serve areas within town limits, diminishing the feasibility of broadband service in the more costly to serve outlying areas,” said the letter, signed by USTelecom, Independent Telephone & Telecommunications Alliance, National Telecommunications Cooperative Association, Western Telecommunications Alliance, and OPASTCO. The letter said some municipal broadband network investments have gone sour, while other plans are “being scaled back drastically or abandoned outright, due to the rising costs, complex technological hurdles, and underwhelming consumer demand.” The legislation should be modified to limit its effect to areas without existing broadband service, the letter said. The bills also should include language “to prevent municipal broadband networks from being cross subsidized and thus able to offer cut-rate prices that cannot be matched by private firms.”

The telecom industry has put most of its political bets on Sen. John McCain, R-Ariz., for president, but Sen. Hillary Clinton, D-N.Y., isn’t far behind, according to January campaign finance reports compiled by CQ’s Political Moneyline. Communications industry PACs gave McCain $49,000, compared with $36,258 for Clinton and none for Sen. Barack Obama, D-Ill. The communications industry ranked third among industry PAC donors for McCain and sixth for Clinton. Donors to McCain included Verizon, AT&T, Qwest, USTelecom, T-Mobile, Qualcomm, the Consumer Electronics Association, EchoStar, GoDaddy and the NCTA. Clinton received money from CompTel, Cablevision, the CEA, Pappas Telecasting, Cincinnati Bell and Level 3. McCain has raised $53.1 million total, according to his January 2008 report. Obama doesn’t list any communications PACs on his disclosure form. Clinton has received the most PAC funding among the three candidates. Of the $138 million she has raised, almost $939,000 came from PACs. McCain received more than $582,000 in PAC money of $53.1 million total raised and Obama, about $8,000 of $140.5 million total. The New York Times last week ran a front-page story on McCain’s dealings as Commerce Committee chairman with telecommunications lobbyist Vicki Iseman, who represented Paxson Broadcasting in a dispute with the FCC. In response, McCain denied any improper activity, including inappropriate intervention with the FCC on Iseman’s behalf.

In an age where scores of information sources are at every citizen’s fingertips, public officials’ policymaking processes need to be fully transparent because “bad news can’t hide anymore, it will always get out,” said Victoria Clarke. The Comcast senior advisor and national news analyst made the comments in a keynote to state regulators at their winter meeting in Washington. Meanwhile, NARUC committees adopted four telecom policy resolutions including a controversial proposal for unifying federal and state oversight of wireless consumer protection. The resolutions must still be adopted by the NARUC board, which meets Wednesday, before becoming official policy.

A USTelecom proposal of a plan for reducing phantom traffic on phone networks “is a reasonable step toward a… solution” because it “represents a consensus position,” the Independent Telephone & Telecommunications Alliance told the FCC Thursday in an ex parte. The bottom line for any proposal is “carriers that use the network must help pay for it,” said the group of mid-size incumbent carriers. Representatives of USTelecom and some of its members met Monday with FCC staff to outline a proposal to require all originating providers to transmit the phone numbers assigned to calling parties. Any other carriers in the calling route would have to pass on that information “without alternation,” said USTelecom in an ex parte filing a day later. USTelecom proposed technical rules involving local number portability queries and “traffic termination agreements” to make the recommended mandates work. “It should be deemed an unreasonable practice for a provider to route traffic for the purpose of disguising the identity of the financially responsible provider or the traffic’s originating jurisdiction,” the USTelecom proposal said. The rules would be enforced through the FCC’s complaint process “or other such remedies as may be permitted by law.”

The FCC shouldn’t fix what’s isn’t broken by redefining more narrowly which deals can be offered by TV stations and cable networks for carriage on multichannel video programming distributors, said broadcasters, large cable operators and programmers. Disputing claims by the American Cable Association and others, the NAB’s reply to an FCC rulemaking notice said TV stations never require pay-TV companies to carry affiliated channels so they can show the broadcast signals.

Net neutrality proponents praised a bill (HR-5353) introduced late Tuesday by House Telecom Subcommittee Chairman Ed Markey, D-Mass., that orders an FCC study of broadband access (CD Feb 13 p2). “The bill contains no requirements for regulations on the Internet,” Markey said, but it suggests that principles that have “guided the Internet’s development and expansion are highly worthy of retention.” Markey announced the bill’s introduction Wednesday at a hearing on the digital transition.

Congress passed an economic stimulus bill late Thursday that includes tax provisions favorable to the telecom industry. The bill would allow companies to write off 50 percent of capital investments in 2008. That so- called bonus depreciation provision will be helpful to phone and cable companies. The provision could help increase investment in broadband, telecom officials said. “We commend Congress and the administration for taking this action to help spur investment and broadband deployment,” USTelecom President Walter McCormick said in a written statement Friday.

A “deep need for fundamental reform” of the Universal Service Fund should inspire action on the “practical” proposals by the Federal-State Joint Board on Universal Service, FCC Commissioner Deborah Tate said at a Federalist Society forum Tuesday. A USF revamp is an “overarching public policy issue” that isn’t likely to make one of David Letterman’s top ten lists, but it “probably should because it affects everyone,” Tate said. She co-chairs the joint board, which issued recommendation in November. “We just need to get on with it,” she said.

The FCC seeks $338.8 million in its FY 2009 budget, with $25.5 million set for an inspector general’s oversight of the Universal Service Fund, according to budget documents released Monday. The budget also includes $20 million to educate consumers about the 2009 digital transition, money that would be spent on media tours, public service announcements, direct mail campaigns and other public education activities. The commission also is seeking $1 million for a clearinghouse program to expand outreach to police and fire agencies.

Solveig Singleton, ex-Progress and Freedom Foundation, joins Institute for Policy Innovation as adjunct fellow, focusing on intellectual property and communications policy… Marc Gonzales, ex-aide to Rep. Gene Green, D- Texas, becomes USTelecom vice president, congressional affairs… Cheryl Idell, ex-Twentieth Century Fox, joins Nielsen as executive vice president, media product leadership… Elinor Hirschhorn, ex-College Sports TV, moves to Simon & Schuster as executive vice president, chief digital officer… New at Telecom Industry Association: Taly Walsh, ex-InfoComm International, becomes vice president- marketing and business development; Nicholas Fetchko, ex- State Department, as director, international and government affairs… VoIP company deltathree names Lior Samuelson, Mercator Capital, board chairman.