National Telecommunications Cooperative Association

Volume 41, No. 19/May 14, 2009

In this issue:


NTCA Comments on Nonrural USF Support

FCC Shortens Porting Time to One Business Day

FTC Delays Red Flag Rule Compliance Deadline; Publishes Template

Obama Administration Releases Detailed FCC Budget Request

Promises Accelerate Health Care Reform

White House Targets Estate Taxes to Pay for Health Care Overhaul

House Hearing Examines Competition in the Wireless Industry

FCC Releases Consumer Inquiries and Complaints Reports

Notes in the News





NTCA COMMENTS ON NONRURAL USF SUPPORT

NTCA urged the FCC in comments filed May 8 to maintain its existing policy o=
f recognizing critical differences between rural telephone companies and non=
rural carriers. The association filed jointly with the National Exchange Car=
rier Association, OPASTCO, Eastern Rural Telecom Association and WTA.

The filing was in response to the commission's April 8 notice of inquiry (NO=
I) asking parties to refresh the record on the high-cost, universal service=
support mechanism for nonrural carriers. The NOI also called for input on p=
roposals submitted by the Vermont Public Service Board, Vermont Department o=
f Public Service, the Maine Public Utilities Commission, CostQuest, Qwest an=
d Embarq-all of which relate to universal service funding more broadly. In a=
ddition, the NOI sought comment on how a decision in this proceeding "should=
relate to more comprehensive high-cost reform and the commission's initiati=
ves regarding broadband deployment."

In the filing, the associations noted that the commission should not conside=
r issues in this proceeding that relate to rural support mechanisms and sole=
ly focus on the nonrural support questions. The group noted that significant=
differences still exist between rural telephone companies and nonrural incu=
mbent local exchange carriers (ILECs), warranting separate consideration of=
high-cost, Universal Service Fund (USF) support reform issues.

The group urged the commission to step lightly to ensure that in the process=
of creating reforms for nonrural USF it not take any action that would adve=
rsely effect support mechanisms for rural, rate-of-return, regulated telepho=
ne companies. In addition, the associations urged the commission to ensure t=
hat it takes no actions that would jeopardize broadband deployment plans and=
rural ILEC accomplishments.

For the full text of NTCA's joint comments in this proceeding, visit www.ntc=
a.org.

-- Dorie Pickle, 703-351-2035
-- dpickle@ntca.org




FCC SHORTENS PORTING TIME TO ONE BUSINESS DAY

In a May 13 open meeting, the FCC voted unanimously to reduce the time frame=
that carriers have to port a number to a new provider from four business da=
ys to one. The commission stated that delays in ports "cost consumers money=
and impede their ability to choose providers based solely on price, quality=
and service."

The commission will require larger providers to implement the new porting in=
terval nine months after it receives key input from the North American Numbe=
ring Council (NANC). The input from NANC is due 90 days after the effective=
date of the order, which has yet to be determined. Small carriers will have=
an additional six months, for a total of 15 months after the input is recei=
ved.

Over the course of this proceeding, NTCA strongly urged the commission throu=
gh a number of ex parte meetings and filings to reject shortening the portin=
g interval for rural incumbent local exchange carriers. The association argu=
ed that many small, rural companies lack automated systems, so the porting p=
rocess requires employee resources and time to complete [Washington Report,=
April 23, 2009]. While the extended implementation deadline may prove helpf=
ul to small carriers, compliance may be costly. Carriers should plan accordi=
ngly.

As of press time, the text of the order had not been released. Once publishe=
d, NTCA will review the order and alert its membership about the details and=
the date of compliance.

-- Dorie Pickle, 703-351-2035
-- dpickle@ntca.org




FTC DELAYS RED FLAG RULE COMPLIANCE DEADLINE; PUBLISHES TEMPLATE

The Federal Trade Commission (FTC) announced on April 30 that it will give a=
n additional three months to enforce its new red flag rules. The new deadlin=
e for compliance has been changed from May 1 to August 1, giving companies,=
including telecommunications carriers, more time to develop and apply ident=
ity-theft prevention programs.

Regarding the delay, FTC Chairman Jon Leibowitz stated, "Given the ongoing d=
ebate about whether Congress wrote this provision too broadly, delaying enfo=
rcement of the red flags rule will allow industries and associations to shar=
e guidance with their members, provide low-risk entities an opportunity to u=
se the template in developing their programs, and give Congress time to cons=
ider the issue further."

The FTC issued a template on May 13 to help guide businesses in developing t=
heir written identity-theft prevention programs. The template, "Create Your=
Own Identity Theft Prevention Program: A Guided Four-Step Process," provide=
s detailed instructions to help companies complete and print the fill-in-the=
-blank form online. It is available at www.ftc.gov/bcp/redflagsrule/get-star=
ted.shtm.

For more information, visit www.ftc.gov/redflagsrule.

-- Dorie Pickle, 703-351-2035
-- dpickle@ntca.org




OBAMA ADMINISTRATION RELEASES DETAILED FCC BUDGET REQUEST

The White House released its detailed fiscal year 2010 budget on May 7 for f=
ederal agencies, including the FCC.

In a departure from the last administration's budget proposals, this proposa=
l for the commission does not specifically request any funds to be transferr=
ed from the Universal Service Fund (USF) to the commission's Office of the I=
nspector General (OIG) for audits. In fiscal year 2009, $25.5 million was tr=
ansferred from USF to OIG for audits and investigations.

The budget proposal did allude to the administration's desire for some overs=
ight. "The administration supports Universal Service Fund reforms that will=
help ensure subsidies are well-targeted, demonstrate results and minimize t=
he burden to ratepayers," the budget request stated. "In addition, the admin=
istration will pursue means to strengthen USF financial and program manageme=
nt, and minimize waste, fraud and abuse."

NTCA's government affairs staff continues to educate congressional offices o=
n the difficulties many member companies have experienced with overly burden=
some USF audits and is encouraged the budget proposal does not request addit=
ional funds be transferred from USF to the OIG for audit-related activities.=


The administration disagreed with two provisions Congress has included in an=
nual appropriations bills to exempt USF from the Anti-Deficiency Act and to=
prohibit the commission from imposing a primary-line restriction on USF sup=
port. "These provisions unnecessarily increase the risk of financial mismana=
gement of the fund and limit reforms that could improve the efficiency of th=
e program and reduce burdens on telephone ratepayers," the budget request st=
ated.

NTCA will continue pushing for these provisions to be included in the annual=
appropriations legislation later this year and will continue working to mak=
e the Anti-Deficiency Act exemption permanent.

Just recently, the association worked closely with Reps. Dennis Rehberg (R-M=
ont.) and Betsy Markey (D-Colo.) in their efforts to introduce legislation (=
H.R. 2135) that would provide a permanent exemption. Sen. John (Jay) Rockefe=
ller IV (D-W.Va.) introduced on January 29 nearly identical legislation (S.=
348), which NTCA also supports [Washington Report, April 30, 2009].

-- Adam Healy, 703-351-2043
-- ahealy@ntca.org




PROMISES ACCELERATE HEALTH CARE REFORM

President Barack Obama met several times this week with various industry gro=
ups and congressional leaders to address the nation's health care situation.

On May 11, he met with a host of representatives from insurance and drug com=
panies, hospitals, union groups and doctors who all promised to seek ways to=
reduce the nation's health care spending by 1.5% per year-an estimated $2 t=
rillion over the next 10 years.

The next day, Obama met with CEOs representing some of the nation's leading=
corporations. The group discussed how they were able to cut their health ca=
re costs while improving the overall health of their work force through well=
ness and prevention programs.

During a May 13 meeting in the Oval Office, the president met with Vice Pres=
ident Joe Biden, House Speaker Nancy Pelosi (D-Calif.) and Majority Leader S=
teny Hoyer (D-Md.), as well as George Miller (D-Calif.), chairman of the Hou=
se Education and Labor Committee, Henry Waxman (D-Calif.), chairman of the H=
ouse Energy and Commerce Committee, and Charles Rangel (D-N.Y.), chairman of=
the House Ways and Means Committee, whose committees have jurisdiction over=
health-related matters.

Challenging the group's effort toward health care reform, Obama stated, "We'=
ve got to get it done this year, both in the House and in the Senate, and we=
don't have any excuses."

The democratic House leaders promised to pass a comprehensive health care bi=
ll by July 31.

Recognizing the challenges set before the House and Senate members to work t=
ogether in presenting a plan, Obama shared his commitment to three basic pri=
nciples: 1) the rising costs of health care must be brought down; 2) America=
ns must be able to choose their own doctor and their own health plan; and 3)=
all Americans must have quality, affordable health care.

-- Tammie Logan, 703-351-2038
-- tlogan@ntca.org




WHITE HOUSE TARGETS ESTATE TAXES TO PAY FOR HEALTH CARE OVERHAUL

While completing the rollout of President Barack Obama's very first budget,=
the White House announced May 11 that the president's tax proposals would p=
rovide approximately $70 billion in new revenue. Of that number, new estate-=
tax provisions account for $24.2 billion over the course of 10 years.

The new provisions would include tightening the reporting requirements for e=
state and gift transfers by requiring consistent valuation of estates and gi=
fts. Estate executors also would have new reporting requirements.

The Office of Management and Budget Director Peter Orszag reported that the=
administration added the provisions to help pay for Obama's proposed $635 b=
illion health care reform reserve fund.

-- Tammie Logan, 703-351-2038
-- tlogan@ntca.org




HOUSE HEARING EXAMINES COMPETITION IN THE WIRELESS INDUSTRY

The House Energy and Commerce Subcommittee on Communications, Technology and=
the Internet held a May 7 hearing, "An Examination of Competition in the Wi=
reless Industry," to review issues related to the status of wireless competi=
tion in the United States.

During Subcommittee Chairman Rick Boucher's (D-Va.) opening remarks, he desc=
ribed plans to develop legislation that would create uniform consumer protec=
tion standard rules for wireless providers, identify and make available addi=
tional spectrum for commercial use, and modify cellular tower siting rules.=
He also addressed other wireless industry-related issues that may require l=
egislative action, including whether roaming agreements rules should include=
data as well as voice services, whether adjustments are needed to ensure th=
e adequate availability of backhaul, and if policy adjustments are required=
to ensure that the latest handsets are available to more cellular providers=
.

Expressing support, Energy and Commerce Committee Chairman Henry Waxman (D-C=
alif.) agreed with Boucher's pursuit of legislation that establishes one set=
of national consumer protection rules for wireless providers and addresses=
special access and roaming issues.

"Pro-competitive policies in the special access market are essential to maxi=
mize choice, affordability and technological innovation in the broadband mar=
ket," Waxman stated. "It is important to balance build-out incentives with p=
ractical and competitive realities. At a minimum, I believe that any carrier=
that accepts federal funds should not be permitted to close its network to=
others and should be required to provide roaming on just and reasonable ter=
ms."

Energy and Commerce Committee Ranking Member Joe Barton (R-Texas), who suppo=
rts streamlining wireless regulations, reflected on the state of the wireles=
s industry. "Competition is flourishing, and consumers are paying less for b=
etter service," he stated. "There are four nationwide carriers, four regiona=
l carriers and more than 100 small carriers competing for subscribers. Over=
the last two decades, the local monthly wireless bill has been cut almost i=
n half, and the price per minute has dropped from 44 cents to 4 cents while=
the average minutes of use has quintupled. And subscribers can select from=
a dizzying array of plans and devices."

To view a list of the hearing's witnesses and to read their complete testimo=
ny, go to http://energycommerce.house.gov/index.php?option=3Dcom_content&vie=
w=3Darticle&id=3D1611&catid=3D134&Itemid=3D74.

-- Leif Oveson, 703-351-2041
-- loveson@ntca.org




FCC RELEASES CONSUMER INQUIRIES AND COMPLAINTS REPORTS

The FCC's Consumer and Governmental Affairs Bureau (CGB) released on May 6 t=
he third- and fourth-quarter 2008 reports on informal consumer inquiries and=
complaints.

Among the report's highlights:


Wireless consumer complaints rose to 16,950 in the third quarter of 2008-up=
25% from the second quarter-followed by a 26% decrease to 12,464 in the fou=
rth quarter. In both quarters, the majority of complaints were due to issues=
with the Telephone Consumer Protection Act (TCPA), which governs the conduc=
t of telephone solicitations, also known as telemarketing.


Wireline complaints decreased in the third quarter to 39,546-down from 41,23=
9 in the second quarter-and dropped further to 27,160 in the fourth quarter.=
Unsolicited fax complaints, do-not-call list complaints and TCPA accounted=
for more than 80% of the total in both quarters. Wireless telecommunication=
s inquiries rose to 6,686 during the third quarter-up from 4,685 in the seco=
nd quarter-followed by a 47% decrease to 3,521 in the fourth quarter.


Wireline inquiries increased over 16% from 21,502 in the second quarter to 2=
4,981 in the third quarter. They then decreased over 16% to 21,355 in the fo=
urth quarter. TCPA contributed more than 70% of inquiries for both quarters.


The largest jump in inquiries was in the radio and television broadcasting c=
ategory, for which inquiries rose more than 93% in the third quarter and an=
additional 194% in the fourth quarter. More than 85% of these inquiries per=
tained to the digital television transition. When compared to 2007, inquirie=
s in this category increased by 1,787%, from 14,895 in 2007 to 281,168 in 20=
08.


For purposes of tracking and reporting, the commission defines a complaint a=
s a communication received at CGB's consumer center that: 1) identifies a pa=
rticular entity under the commission's jurisdiction; 2) alleges harm or inqu=
iry; and 3) seeks relief.

An inquiry is defined as correspondence received at CGB's consumer center fr=
om individuals seeking information on matters under the commission's jurisdi=
ction.

The full text of both reports is available online at www.fcc.gov/cgb/quarter=
/.

-- Dorie Pickle, 703-351-2035
-- dpickle@ntca.org




NOTES IN THE NEWS

The Senate Commerce, Science and Transportation Committee has scheduled a he=
aring for May 19 at 11 a.m. to consider the nominations of Larry Strickling,=
President Barack Obama's nominee to head the National Telecommunications an=
d Information Administration, and Aneesh Chopra, the president's nominee to=
serve as chief technology officer at the White House Office of Science and=
Technology.

The Senate Commerce, Science and Transportation Committee postponed the prev=
iously scheduled May 12 hearing to consider the nomination of Julius Genacho=
wski as the next FCC chairman. The committee indicated that a new hearing da=
te would be announced shortly after the Senate returns from the Memorial Day=
recess.



PLEASE NOTE: This electronic publication is copyrighted by the National Tele=
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Washington Report is published weekly by the
National Telecommunications Cooperative Association
(NTCA), 703-351-2000; Web site: www.ntca.org
e-mail: communications@ntca.org
Subscriptions: $85, NTCA members; $250, nonmembers.
Editors: Tennille Shields and Christian Hamaker
Graphic Design: Shari Auckerman
=A92009 National Telecommunications Cooperative Association
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Arlington, VA 22203





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