Mass. consumers will benefit if the FCC shifts universal service contributions from a revenue base to phone numbers, a pro-numbers group said Fri., challenging predictions of harm to consumers by the Mass. Consumer Coalition and the Keep USF Fair Coalition (CD March 9 p10). Opponents used “incorrect data and ‘funny math,'” said the USF by the Numbers Coalition. The opposing group “exaggerates how high numbers- based assessments would be” and overstates what Mass. customers now contribute to USF, said USF by the Numbers, composed of AT&T, CTIA, NCTA, USTelecom, Verizon, VON Coalition, DSL.Net, GCI and IDT Corp.

Witnesses were in general agreement on reforming but maintaining the Universal Service Fund (USF), at a House Small Business Committee hearing on “advancing the innovation agenda” via telecom and IT. The 2-panel hearing featured exclusively company executives or lobbyists, so there was little disagreement. Main issues were USF reform, the research & development tax credit, Sarbanes-Oxley reform and net neutrality; after the hearing, Committee Chmn. Velsquez said moving forward on tech issues is on the Democratic agenda, but other issues will take precedence in the short term.

Cable operators got some clarity on VoIP interconnection rules from an FCC order saying incumbent LECs must give them interconnection rights and exchange traffic with cable systems. The Wireline Bureau order approved a Time Warner Cable (TWC) request seeking interconnection rights for certain types of phone calls. The order came after cable operators had argued before the Commission for such rights, and exactly a year after TWC complained to the agency about a S.C. PSC denial of a certificate it said it needed for interconnection agreements to sell VoIP (CD March 6 p12).

Telcoms hailed a House bill introduced Wed. to repeal the 3% federal excise tax on local phone service. The bipartisan bill (HR-1194) by Ways & Means Oversight Chmn. Lewis (D-Ga. ) and Ranking Member Ramstad (R-Minn.) is companion to a Senate measure (S-140) introduced in Jan. by Sens. Schemer (D-N.Y.) and Crapo (R-Ida.), members of the Finance Committee. New tax rules set in 2006 erased much of the tax, but it still applies to specialized equipment for the disabled, lifeline services and rental gear. A another bill (S-170), by Sen. Ensign(R-Nev.), would repeal the tax, but he doesn’t serve on Finance, where tax bills must originate. Verizon, USTelecom and AT&T all urged Congress to pass the measure and President Bush to sign it into law.

Wireless carriers are being misleading when they claim they must complete local service request (LSR) forms with 100-plus data fields, USTelecom told the FCC. The FCC wants comment on a Sprint Nextel-T-Mobile petition seeking simpler intermodal porting rules. “The LSR is a universal form used to order a wide range of services and facilities such as services for resale, unbundled network elements, directory listings, and number portability,” USTelecom said: “While the LSR forms used by many LECs may contain over 100 fields to cover orders for all of these types of services, the vast majority of those fields are not required for number portability requests.”

Some of the FCC’s interconnection rules “may no longer be necessary… as the result of meaningful economic competition,” Wireline Bureau staff said in a long report issued in the biennial review of regulations required by the Telecom Act. The staff didn’t outright recommend eliminating or modifying the “Part 51” equal access, network change disclosure and TELRIC rules but said all merit review.

Chiefs of USTelecom, NCTA and CTIA asked for a permanent ban on Internet access taxes in letters to the House and Senate. Walter McCormick, Kyle McSlarrow and Steve Largent asked members to support S-156 by Sens. Wyden (D-Ore.), McCain (R-Ariz.) and Sununu (R-N.H.), which would make permanent the ban set to expire in Nov.

Perhaps signaling an amiable turf war between the FTC and FCC, FTC Comr. Jon Leibowitz staked a claim for his agency on oversight and enforcement of broadband competition, with or without formal net neutrality rules. He’s often asked which agency should take the lead if Congress is close to passing neutrality legislation, Leibowitz told an FTC broadband competition workshop. The FCC has a “major role to play,” but neutrality “touches the heart of what the FTC does” -- consumer protection. The FTC is especially keen on ensuring the 4th of former FCC Chmn. Michael Powell’s Internet freedoms -- transparency and disclosure -- Leibowitz said.

USTelecom cited a Google executive’s recent remarks to warn Sens. Snowe (R-Me.) and Dorgan (D-N.D.) of the effect of their legislation mandating net neutrality -- without using that term. The head of Google’s TV technology unit, Vincent Dureau, had said Internet TV projects like the Skype founders’ Joost would hurt Web infrastructure, which can’t handle large-scale broadcast-quality TV and movies (CD Feb 8 p14). Dureau’s comments calling for “strategic commercial partnerships with network service providers” are “a significant departure from Google’s previous support for [neutrality] legislation,” which would ban such arrangements, USTelecom Pres. Walter McCormick wrote the senators. Even with telephone networks, “no effective network has ever been built without regard to efficiency, peak load management, prioritization of traffic and other capacity management efforts,” he said. Neutrality is a “draconian solution” that would ban network flexibility and “end the Internet as we know it” -- all the more troubling “in the absence of actual problems in the marketplace,” McCormick said. “Many breakthroughs” are on the way, from “home health” and environmental monitoring to “enhanced telecommuting,” but they require “continual investment” in infrastructure, he added. The “government-knows-best” approach to network management might have the “best of intentions” but “will quickly become outmoded” and hold back American innovation, McCormick said.

FCC should extend deregulation of wireline Internet Access services to rate-of-return carriers, USTelecom said Tues. in an ex parte filing. The Sept. 2005 deregulation was an attempt to create regulatory parity between wireline carriers and other broadband providers, but excluded rate-of- return wireline carriers, the association said: “Prohibiting rate of return carriers from participating in this flexible framework denies their customers the benefits of deregulation, including the broader deployment of advanced broadband services,” the filing said. Some carriers gained deregulation because they're classified price cap carriers at the federal level, though in some states they're considered rate of return carriers, USTelecom said. The association acknowledged that wider deregulation could raise cost allocation issues, but said such issues “apply to both price cap and rate of return carriers and can be resolved in alternative proceedings.”