CHICAGO -- It’s still too soon to gauge the effects of an FCC order easing local franchising for phone companies, said panelists at a sparsely attended NXTcomm panel Monday. “The order has only been in effect since April, and part of it is still under review by the Office of Management and Budget, so we haven’t received a lot of feedback yet,” said Media Bureau Chief Monica Desai. The order has been helpful in “setting some boundaries” for municipal governments in franchise talks, but state franchise laws have exerted more noticeable change on the process, said David Young, Verizon vice president of regulatory affairs. Cable officials wait eagerly to see how their industry will fare under the new regime, said Cox Regulatory Affairs Vice President Alexandra Wilson.

Net neutrality rules would harm consumers and thwart competition, according to a preliminary review of groups’ responses to the FCC’s call for comments on whether network access rules are needed. Most groups responding were telecom-related businesses, free-market advocacy organizations and trade associations. All said imposition of regulation would hinder development of the next-generation Internet and contended there’s no need for the rules since current govt. regulations can punish any discriminatory behavior.

A Washington attorney accused USTelecom of violating the FCC’s ex parte rules by filing a letter in a proceeding that had been categorized as “restricted.” Attorney Mark O'Connor told the FCC that a June 6 ex parte letter from USTelecom dealing with “traffic pumping” was sent after a formal complaint was filed by Qwest on the same issue, an action that categorizes the proceeding as restricted and bars filings. Qwest’s complaint against Farmers & Merchants Telephone was filed May 2. O'Connor said it was particularly egregious that the USTelecom letter went to the FCC Enforcement Bureau, which is considering Qwest’s formal complaint. O'Connor represents one of the parties in the dispute about Ia. phone companies routing traffic to free- calling companies to “pump” up long distance traffic and, thus, access charges. His letter was sent June 15. USTelecom Vp-Policy Glenn Reynolds said O'Connor’s letter misstates the rules. Reynolds -- who once was the FCC Enforcement Bureau official who handled formal complaints -- said the rule is that no party engaged in the formal complaint can file ex partes or have “substantive communications with staff without advanced notice of all other parties.” Neither USTelecom nor any members are parties to the proceeding, so the restriction doesn’t apply to it, he said.

The 2nd U.S. Appeals Court, N.Y.C., should overturn a district court decision to block Cablevision’s remote PVR service, a broad consortium of technology and communications industry groups, including CEA, USTelecom, CTIA, Electronic Frontier Foundation, Public Knowledge and the Center for Democracy & Technology, said in an amicus brief filed Fri. with the court. The support for Cablevision is notable, since the cable industry often is at loggerheads with some of its new allies. “Imagine that -- CEA going to bat for a cable company,” CEA Pres. Gary Shapiro said by e-mail. Separately, copyright law professors asked the appellate court to overturn U.S. Dist. Court, N.Y., Judge Denny Chin’s ruling that if it provided such a service Cablevision would directly infringe cable programmers’ copyrights (CD March 26 p8). The case will be heard in early Aug.

Wireline and wireless carriers lined up on opposite sides as comments accumulated Wed. at the FCC on capping USF subsidies to competitive rural carriers. The cap was recommended by the Federal-State Joint Board on Universal Service as an interim measure to slow the rampant growth of the Universal Service Fund. But the recommendation to apply it only to competitive eligible telecom carriers (CETCs), generally wireless carriers, has created a sharp division among rural carriers.

USTelecom urged the FCC to “act quickly to protect the integrity of the access charge system” by clamping down on companies engaged in “traffic pumping.” Some rural ILECs are misusing FCC Rule 61.39 to quit the NECA pool so they can raise access charges to an unreasonable level, USTelecom Pres. Walter McCormick said in a letter sent Wed. The rule was meant to “provide an administratively easy process for the smallest rural [LECs] to leave the NECA pool by establishing rates based on historical traffic levels rather than expensive and time-consuming cost studies,” McCormick said. It wasn’t intended to be “a vehicle for such carriers to earn unlimited windfalls totally divorced from their actual costs,” McCormick said. “The rule was expressly premised on a finding that historical traffic data likely would result in reasonable rates,” he said: “USTelecom is intimately familiar with the history and intent of Rule 61.39 because this association worked closely with the Commission in developing the rule, in order to provide our small-carrier members with flexibility to leave the NECA pool to establish their own cost-based rates without the extensive costs associated with traditional tariff filings.” When adopted, the rule gave the FCC “full authority to take ‘corrective action’ to addresses abuses of the rule,” USTelecom said. Three Ia. LECs recently offered the FCC a compromise way of using Rule 61.38 that wouldn’t produce such high access charges (CD June 6 p11).

The Agriculture Dept. would be required to devise a rural broadband strategy under the farm bill that was marked up Tues. in the House Agriculture Rural Development Subcommittee. The broadband strategy requirement was outlined in an amendment the committee adopted proposed by Rep. Salazar (D-Colo.) It would promote coordination among federal agencies to streamline existing rural broadband rural initiatives. The Agriculture Dept. would be directed to identify how programs and resources could best respond to the obstacles that stand in the way of rural broadband development, according to the amendment. In other areas, the farm bill would change the definition of an “eligible rural community” to include any area in the U.S. that isn’t included within a city with more than 20,000 people and the areas “contiguous and adjacent to such a city or town.” This definition was requested by a number of rural lawmakers (CD May 23 p2) who had proposed their own bills on the matter, including Sens. Roberts (R-Kan.), Salazar (D-Colo.) and Rep. Herseth (D-S.D.). The bill would prohibit the Agriculture Secretary from making a loan to any community where there are more than 3 incumbent service providers. It also would increase the percentage of subscriber lines that an eligible entity is allowed to serve from 2% to 10%. USTelecom said it was pleased with the subcommittee’s “clear focus,” which would ensure that the Rural Utilities Services programs help spur broadband development in unserved areas, said Pres. Walter McCormick in a statement. Qwest also welcomed the bill, saying it was an “important first step toward refocusing the RUS Broadband Loan Program so that it benefits those who need it the most: rural communities without access to broadband.”

A federal court Fri. vacated part of an FCC order under which VoIP providers must contribute to the Universal Service Fund (USF). A 3-judge panel of the U.S. Appeals Court, D.C., said it found “the Commission’s explanation wanting as to the pre-approval of traffic studies and the suspension of the carrier’s carrier rule.” Judges Harry Edwards, David Tatel and Merrick Garland heard the case brought by Vonage and CCIA (CD Feb 12 p1), with Tatel writing the opinion.

It’s silly for ILECs to read lists of long distance companies to customers when they call to sign up for service, telecom companies said Wed. They were responding to an FCC request for comments to “refresh” a 2002 notice of inquiry (NOI) asking if 20-year-old “equal access and nondiscrimination” rules remain necessary. People know there’s a choice of long distance providers -- and many don’t even buy stand-alone long distance service anymore, carriers told the FCC.

Senate Commerce Committee Chmn. Inouye’s broadband data bill could gain support, though Republicans didn’t co-sponsor the measure (S-1492) and the telecom industry was largely mum when it was introduced Thurs., industry and Hill sources said. The bill sets a marker for potential conference with one in the works by the House Commerce Committee. But it’s only a starting point -- a dearth of GOP co-sponsors and lukewarm Bell company endorsements indicate discomfort, according to a source close to the committee.