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Wireless stirs universal-service waters

WASHINGTON-Even as wireless carriers begin paying nearly 6 percent of their interstate and international revenues to the federal universal-service fund, they are gearing up on a number of fronts to fight the program.

Celpage Inc. said it expects to know by the end of March whether the Supreme Court will review the Federal Communications Commission’s universal-service rules. Celpage believes the rules are unconstitutional.

Last Wednesday, a coalition was formed to convince the FCC that wireless carriers deserve eligible telecommunications carrier status. And earlier this month, the Personal Communications Industry Association asked the FCC to revise its rules to reflect the unique qualities of wireless carriers.

The federal government pays money to carriers to keep local residential phone rates comparable across the nation. Traditionally, this fund has been financed through access charges paid by long-distance carriers to incumbent local exchange carriers. But in this new day of competitive LECs, the system is being revised.

Celpage goes to the Supreme Court

Celpage submitted papers to the Supreme Court Dec. 23, claiming the universal-service program is a hidden tax and Congress erred in delegating the FCC to administer the program.

“This tax was not enacted in accordance with the constitutional requirements for revenue bills and its parameters have not been defined by Congress but by an independent federal agency,” Celpage said.

“Even the loftiest governmental goals must be adopted and implemented in compliance with constitutional and statutory authority,” said Celpage President Luis G. Romero-Font.

The paging carrier has support from Sen. Conrad Burns (R-Mont.), chairman of the Senate communications subcommittee, who agrees that Congress, not the FCC, should set universal-service policy.

Burns “is a very big proponent of the universal-service program [but] as far as the E-rate is concerned, he does view that as an illegal tax and would agree with [Celpage’s] assessment,” said Matt Raymond, press secretary for Burns.

The E-rate is the common term for the portion of the universal-service program that would connect all schools and libraries to the Internet.

Celpage, the second-largest paging operator in Puerto Rico, made similar arguments in an appeal to the U.S. Court of Appeals for the Fifth Circuit. The Fifth Circuit disagreed and upheld most of the FCC’s universal-service program.

In addition, Celpage is asking the Supreme Court to reverse a Fifth Circuit ruling that states can impose special requirements on carriers wanting to be granted ETC status.

Coalition formed to address ETC requirements

On another front, the new Competitive Universal Service Coalition is asking the FCC whether states can impose additional requirements on ETC applicants.

The CUSC said it wants to work with the FCC “in its efforts to create a new universal-service regime.”

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Coalition member PCIA said one of the attractive features of the coalition is that includes both wireless and wireline carriers.

“That was really appealing to us … It is exciting for the people in rural and high-cost parts of America because there are people that do want to enter the market … that is what Congress wanted when it passed the Telecommunications Act of 1996,” said Mary McDermott, PCIA senior vice president and chief of staff for government relations.

However, the Cellular Telecommunications Industry Association did not join the coalition because wireline entities were part of the group.

“We were involved in the discussions [with the coalition but] what we have that they don’t have is a [commercial mobile radio service] focus. We are an association that focuses on wireless carriers,” said Michael Altschul, CTIA vice president and general counsel.

The coalition believes any carrier competing for customers should be able to receive access to universal-service funds.

“Any common carrier, regardless of technology, that offers the required universal services and complies with all applicable requirements should be designated as an ETC for purposes of federal and state universal service support,” the coalition said.

ETC designation has proven elusive to some wireless carriers-most notably Western Wireless Corp.

Western has led the charge in urging the FCC to overrule states that have turned down its requests for ETC status. Western applied for ETC status in 13 states, but withdrew its application for Montana, said Michele Farquhar, outside counsel to Western and the coalition spokeswoman. Western has received ETC status in Minnesota and to serve the non-rural parts of North Dakota.

Other wireless carriers with ETC status include Sprint PCS in Arkansas and California and Centennial Communications in Puerto Rico.

Dare to be different, PCIA challenges FCC

PCIA is urging the FCC to clarify its October universal-service rules and their impact on wireless carriers.

“Reconsideration and/or clarification are necessary to enable wireless carriers to obtain high-cost support once they [receive ETC status] and to determine whether high-cost support will be available in areas that wireless carriers may wish to serve,” PCIA commented.

PCIA also hopes the FCC will re-examine the use of wire centers to determine portability.

Subscribers’ addresses can be used to determine wire centers rather than using the exchange information because often wireless carriers get NXX codes “closest to a carrier’s tandem, which tend to be more densely populated wire centers, even though the wireless carrier may actually use those NXXs to serve higher-cost outlying areas,” PCIA said.

Portability will become more difficult to determine for wireless prepaid customers because “customers’ phone numbers do not always have verifiable addresses, and a prepay customer’s phone number is sometimes the only known association with the customer,” according to the association.

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