An accounting change that resulted in loss of money in the Universal Service Fund (USF) (CD Nov 1 p1) could bankrupt some rural telephone companies, NTCA said in a Nov. 3 letter urging key members of Congress to take legislative action to solve the problem. “The entire portfolio of federal programs supported by the… USF, including its premiere high-cost program, is facing a politically perilous situation as a result of a recent accounting modification mandated by the… FCC,” NTCA CEO Michael Brunner wrote. Subjecting the high-cost and related low-income programs to the Anti-Deficiency Act (ADA) would “either skyrocket the contribution factor to 25% or more, or… rural telephone companies could be bankrupted should support payments be withheld in order to avoid such an escalation,” the letter said. The letter was sent to House and Senate leadership as well as the chmn. and ranking minority member of Commerce and Appropriations committees in both houses. NTCA followed up with a letter Fri. to FCC Chmn. Powell, urging the agency’s support for Hill efforts. NTCA told Powell it was in discussions with members of Congress about a solution “but your leadership is critical.” NTCA said in a news release that it has been working “with a broad coalition of private as well as public interests as this situation unfolds in an effort to prevent any harm to the high-cost program.” Required changes in the accounting practices of the Universal Service Administrative Co. (USAC) have resulted in a loss of money and disrupted USAC’s procedures for funding schools, libraries and possibly rural telephone companies. Recipients of universal service funding are particularly concerned about an ADA requirement that USAC can’t make “commitments” to provide funding unless the funds are in hand, which appears to conflict with the way some USF funds are provided. Recipients say the changes could result in higher contribution costs by carriers, which would be passed onto consumers, or serious disruptions to universal service programs. Spearheaded by outside members of USAC’s board, organizations such as NTCA are seeking legislation to exempt USAC from the ADA. Brunner’s letter said Sens. Snowe (R-Me.) and Rockefeller (D-W.Va.) “are engaged in discussions with the FCC chairman and others to develop a legislative solution to this dilemma.” Meanwhile, the USAC has issued its projected “demand” figures for first quarter 2005, which the FCC will use to determine a contribution percentage “factor” in Dec. Based on the USAC filing, a number of parties are estimating the factor could raise to around 12.74% from the current 8.9% due to the accounting changes. Legg Mason said in a report Fri. that it thinks “Congress will be very interested in a permanent legislative fix, possibly during this month’s lame-duck session.” The goal is a rider to the appropriations bill, but it’s possible Congress will settle for a continuing resolution and not pass the appropriations bill this year, the analysts said.

Verizon Wireless agreed to buy all of NextWave’s PCS licenses for $3 billion, the companies said Fri. A federal Bankruptcy Court will be asked to rule on the request at a Nov. 30 hearing in White Plains, N.Y., since the sale represents NextWave’s new reorganization plan. Meanwhile, a top FCC official said the deal likely won’t set off regulatory red flags.

At CE’s urging, the Cal. Energy Commission (CEC) has adopted changes limiting the impact of its energy efficiency proposals for TVs and DVD players/recorders.

At the industry’s urging, the Cal. Energy Commission (CEC) adopted changes limiting the impact of its energy efficiency proposals for TVs and DVD players/recorders. The CEC put off until next year consideration of standards for cable and satellite set-top boxes. “We do like the progress that we made, but there still are a few outstanding issues,” Jason Linnell, EIA staff dir.- environmental affairs, told us. Meanwhile, the CEC heard comments at its 2nd public hearing Wed. and prepared for early Dec. adoption of its final rules. The industry said the CEC proposals for external power supplies were still “problematic.”

The rights of Canadian broadcasters are at stake as a result of a new ruling by a Quebec court that would allow Canadians to subscribe to U.S. satellite TV signals, said representatives of the Coalition Against Satellite Signal Theft (CASST) in Canada. “We're urging the government to appeal it as quickly as possible,” said CASST Co-Chmn. and Canadian Cable Telecom Assn. (CCTA) Senior Vp Harris Boyd. A spokeswoman for the Satellite Bcstg. & Communications Assn. (SBCA) said the “satellite radio and [TV companies] are thrilled to possibly in the future offer their products to Canadian customers.”

The Universal Service Administrative Co.’s (USAC’s) outside board members are trying to get a legislative fix to solve an accounting problem (CD Oct 6 p1) that caused the $6.5 billion universal service program to lose money and jeopardized not only to the E-rate program but also high-cost rural telephony support. Although USAC can’t lobby Congress, its board has been meeting with state regulators, telecom industry associations, education groups and others to seek help in gaining legislation during the lame-duck session of Congress beginning Nov. 15. “The USAC board is reaching out to constituents, talking to people about a solution, trying to do as much as we can,” said USAC Chmn. Frank Gumper, a Verizon consultant: “We've got to do something to get the situation under control, to get the program back to normal.”

The rights of Canadian broadcasters are at stake as a result of a new ruling by a Quebec court that would allow Canadians to subscribe to U.S. satellite TV signals, said representatives of the Coalition Against Satellite Signal Theft (CASST) in Canada. “We're urging the government to appeal it as quickly as possible,” said CASST Co-Chmn. and Canadian Cable Telecom Assn. (CCTA) Senior Vp Harris Boyd. A spokeswoman for the Satellite Bcstg. & Communications Assn. (SBCA) said the “satellite radio and [TV companies] are thrilled to possibly in the future offer their products to Canadian customers.”

In the October 27, 2004 issue of the U.S. Customs and Border Protection Bulletin (CBP Bulletin) (Vol. 38, No. 44), CBP issued notices: (a) proposing to change the way it classifies certain homeopathic products, which would result in the revocation of two classification rulings, and (b) revoking a classification ruling on an air blow gun kit. CBP states that it is also revoking, or proposing to revoke, any treatment it has previously accorded to substantially identical transactions that are contrary to its position in these notices.

The President of the International Longshore and Warehouse Union (ILWU) offered ideas in a press conference to "break the jam and get the cargo moving" in the seriously congested ports of Los Angeles and Long Beach, including the Pacific Maritime Association's (PMA) hiring of more casual workers, the use of container gangs, moving to 24-hour gates to expedite the flow of containers, etc., adding that union workers were not going to pay the price of increased accidents by working two shifts back-to-back. (ShippersNewsWire@americanshipper.com, dated 10/22/04)

FCC Chmn. Powell said the Commission examines the “totality” of a station’s performance, in evaluating whether the public interest has been served at license renewal time. “Chairman Powell’s response is a warning to broadcasters. It explicitly recognizes that licensees like Sinclair have an obligation to serve the public interest and that if questions are raised about their failure to do so, the FCC is prepared to expeditiously investigate the matter and take action,” said House Commerce Committee ranking Democrat Dingell (Mich.). Powell was responding to a letter from Dingell and House Telecom Subcommittee ranking Democrat Markey (Mass) asking Powell if Sinclair Bcst.’s plan to run an anti-Kerry documentary violated the broadcaster’s public interest obligations (CD Oct 14 p11).