Senator Byron Dorgan led the fight to preserve universal service and affordable telecom service this week during a Senate Committee on Commerce, Science and Transportation hearing on Voice over Internet Protocol legislation. Senator Dorgan successfully argued that an amendment should be adopted preserving State Commissions' authority over intrastate universal service and access funding.

Senator Dorgan's language amended S. 2281, the "Voice over Internet Protocol (VoIP) Regulatory Freedom Act of 2004". The bill sought to pre-empt States from imposing access charges and universal service fees on VoIP services. RCR Wireless News said, Dorgan's amendment "gutted" the bill.

Senator Dorgan described his amendment as "reserving the status quo for States," but bill sponsor Senator John Sununu (R-N.H.) said the amendment was a 180 degree turn.

The committee also added a 911 obligation to VoIP services that Senator Ted Stevens (R-Alaska) said was more stringent than what is imposed on the telecommunications industry at large, according to RCR Wireless News. The amendment was offered by Senator Conrad Burns (R-Montana), chairman of the Congressional E911 Caucus.

North Dakota Public Service Commission members, on a split vote, granted Qwest's request to establish a separate company to compete for telephone customers outside its service territory this week.

The Commission split 2-1 on the proposal Wednesday with Commissioners Kevin Cramer and Tony Clark approving Qwest's request and Commissioner Susan Wefald opposing it.

The Commission's decision, according to the Associated Press, allows Qwest to go after local phone service business anywhere in North Dakota including its own territory. It will pursue that business under the name of "Qwest Communications", which will not be bound by North Dakota law that limits what "Qwest Corp" may charge for local telephone service."

Commissioner Wefald was quoted by the Associated Press as saying, "By approving this...the Commission is effectively paving the way for customers to lose important protections under North Dakota law and for the Commission to lose important jurisdiction."

Commissioner Wefald said she believes that Qwest will switch customers from its regulated business to the unregulated company by offering package deals with other phone services. That would allow, Commissioner Wefald said, Qwest to "achieve deregulation" without ever going to the legislature.

Commissioners Clark and Cramer said customers would still have the option of requesting basic telephone service with the State imposed price limit.

Vonage, which provides phone service over high-speed Internet lines, said it had hit the 155,000 customers mark and was adding more than 20,000 users a month. The company also said it was lowering the prices of its unlimited calling plan for new and existing residential customers to $30 from $35.

Vonage is the largest retail provider of voice over Internet protocol, or VoIP, which allows low-cost phone calls over high- speed Internet connections. Vonage has said that it wants 250,000 customers by the end of this year and is expanding internationally.

The Arizona Corporation Commission (ACC) has found that Qwest "willfully and intentionally" violated regulations requiring State approval of interconnections agreements, and sanctioned the carrier for more than $21 million in fines, penalties and credits to competitors. The ACC lowered the fine after Qwest agreed not to appeal the decision.

The enforcement actions stems from issues raised by the regulatory agency during the carrier's application to offer in-region interLATA service in the State, including Qwest's failure to file several interconnection agreements and its failure to implement unbundled network element (UNE) rates.

Qwest will be required to pay approximately $11.7 million in credits to eligible competitive local exchange carriers (CLEC's) and a penalty of $8.8 million, which will go to the State's general fund. Additionally, Qwest was fined $236,000 for not filing numerous other interconnections agreements and for delaying the Commission lower wholesale telephone rates.

5th CIRCUIT COURT SAYS TEXAS TAX APPROACH ON USF ALL WRONG

The Court said, according to the BloostonLaw Telecom Update, that the Telecom Act authorized the FCC to "tax" interstate services to support a Federal Universal Service Fund, and the States to "tax" intrastate services to support State universal service funds for rural, high-cost, and low-income customers. However, the Court said that the Act has no provision for treatment of "multijurisdictional carriers, i.e., carriers that provide both intrastate and interstate service."

When the Texas PUC established its State universal service program in 1997, it levied a 3.6 percent tax on all carriers that provided any intrastate service. This included multijurisdictional carriers that provide interstate, intrastate and international calls originating in Texas. Thus, the Court said, these multijurisdictional carriers were "forced to pay both the Federal universal service tax and the State universal service tax on interstate calls originating in Texas."

The Court went on to say, "Regardless of the amount of intrastate revenues a carrier earns, the double taxation of interstate revenue puts multijurisdictional carriers at a distinct disadvantage compared with the pure interstate carriers. The funding mechanism, therefore, burdens multijurisdictional carriers more severely than pure interstate or intrastate carriers."

Qwest Communications has agreed to pay between $4 and $5 million a year to put its name on Seattle's football stadium and exhibition center. The deal, announced last month, could run as long as 15 years. The 2 year old stadium, now known as
Seahawks Stadium, seats 67,000 for football.

One source said the agreement will include a provision that obligates the owner of the Seattle Seahawks, Paul Allen, and his numerous other businesses to purchase telecom services from Qwest.

The Seattle deal comes nine months after Qwest agreed to pay $14 million for naming rights to the new Omaha arena and convention center.

Verizon Wireless has agreed to acquire Qwest's wireless licenses and other assets in 14 States for about $418 million in cash.

The deal, which covers Qwest's PCS licenses and network assets but not customers, will not affect new or existing Qwest wireless subscribers. Qwest will continue to offer wireless service under the Qwest brand through its wholesale agreement with Sprint PCS.

The transaction includes Qwest's network switching centers, cellular towers and all related equipment, which operate on the CDMA standard, the same standard Verizon uses on its network.

Peter Dunbar, who had been NECA's Director of Financial Operations was named Treasurer and Chief Financial Officer. Dunbar's new responsibilities include budgeting, financial
reporting, investment activity, risk management, billing and collection, corporate disbursements and corporate planning.

Regina McNeil, formerly NECA's senior attorney, was named General Counsel. McNeil has been with NECA since 1996 and worked extensively on securing settlements for the independent telephone industry following the bankruptcies of WorldCom and Global Crossing.

The NECA board chairman, Bill Hegmann, has been serving as the interim President and CEO following the resignations of the organization's three top officers.

AT&T said they want to be in 100 markets by the end of September.

In the July 1st announcement, AT&T said they would include cities in Delaware, Indiana, Kansas, Maryland, Minnesota, Missouri, North Carolina, Nebraska, Pennsylvania and Tennessee. The service is also available in Washington, D.C. and several cities in New Jersey and New York.

The global wireless market is expect to add an average of 186 million new subscribers each year, according to In-State/MDR, resulting in a total wireless population of more than 2 billion by 2007. Estimates from The Yankee Group are slightly more conservative, putting the number of global mobile users at 1.78 billion by the end of the same year.

The Yankee Group found that Europe, Middle East, and Africa will account for 40 percent of users.

In the United States, the Cellular Telecommunications & Internet Association said there are almost 166 million wireless subscribers-- more than a tenfold increase since 1993. The association said that the U.S. wireless industry earned $87.6 billion in 2003 alone.

*151 million customers receive local telephone service from the incumbent local exchange carrier, 29.6 million from a competitive local providers (CLEC), and there were 157 million mobile wireless subscribers.

*Nationwide, mobile wireless subscribers increased 6 percent during the second half of 2003 from 147.6 million to 157 million. For the year 2003, mobile wireless subscribers increased by 13 percent.

*Total CLEC end-user switched access lines increased by 10 percent during the second half of 2003, from 26.9 million to 29 million lines. For the year, CLEC's increased end user lines by 19 percent.

*Of the 181.4 million end-user switched access lines, about 137.5 million served residential and small businesses. CLEC's reported providing 18.7 million (14%) of those lines.

*Cable-telephony lines increased by 6 percent during the second half of 2003, from 3.0 million to 3.2 million lines. The 3.2 million reported cable-telephony lines constituted about 11 percent of switched access lines provided by CLEC's and about 2 percent of total switched access lines.

*CLEC's provide about 16 percent of their switched access lines by reselling the service of other carriers and about 61 percent by means of unbundled network elements (UNE's) leased from other carriers. The remaining 23 percent of CLEC lines was provided over their own facilities.

*Seventy-Five percent of the nation's zip codes reported that at least one CLEC was providing local telephone service in their area in 2003, up from 69 percent a year earlier. About 96 percent of United States households reside in these zip codes. CLEC's reported customers in all 50 States, the District of Columbia and Puerto Rico.

The report can be downloaded from the FCC-State Link page at: www.fcc.gov/wcb/stats.

The Federal Trade Commission (FTC) has rejected a "do-not-spam" list to stop unwanted e-mail, despite the popularity and success of a similar registry for consumers who don't want telephone sales pitches, according to the Washington Post. The agency had studied the issue for months.

The agency's chairman, Timothy Muris, said a "do-not-spam" list would be a "waste of time" because spammers would ignore it. Another danger, he cited, was the fear that spammers might get hold of the list, which would provide them with a gold mine of valid e-mail addresses that would be used for more spam.

To encourage drivers to take more frequent breaks and reducing fatigue-related accidents, the Texas Department of Transportation wants to set up free wireless Internet access at rest stops and travel information centers. The Department has been taking bids and plans to chose a vendor this month. The chosen company, according to the Wall Street Journal, will not be paid for providing the free access.

A spokesman for the agency said there are also plans to install special kiosks where motorists can access Internet-enabled computers with the swipe of a credit card.

Western Wireless is maintaining there is no reason to make changes to the Texas service quality standards rules for wireless carriers to receive State universal service fund support. Their statement came in response to a request by the State's Public Utilities Commission (PUC) for comments.

The PUC is examining whether it should apply all service objectives and performance benchmarks to all eligible telecommunication carriers (ETC's), including wireless carriers performing the function of an ETC.

Western Wireless also said it doesn't support the Texas Telephone Association's approach that would make wholesale changes to every quality rule and ensure that they apply to wireless eligible telecommunications providers (ETP's).

The Association has previously said, according to StateNewsWire, that standards for ETC designation should be consistent, regardless of the type of technology used to provide those services. The organization said that failing to hold wireless ETC's to the same quality service required of landline ETC's in a "technologically neutral" manner provides a distinct advantage to wireless ETC's.

In opposition to State oversight, C. Boydon Gray, a lawyer and board member of a wireless start-up company, said any kind of economic regulation bears a heavy burden of regulation. "The industry is so intensely competitive, I don't know why we would need regulators to step in," said Gray, a former Clinton administration White House counsel. "There is no way a regulator could even keep up with all the changes."

FAH Communications, led by a former Qwest and longtime telecom industry employee, will buy the retail payphone and inmate communications systems for undisclosed terms, according to the Denver Post.

Qwest has about 85,000 payphones across its 14 State region. The sale is expected to close in August and could affect 250 Qwest jobs, according to the company.

AT&T is not pulling out of any markets and will continue to serve its existing residential customers, but said it will no longer spend almost $1 billion a year trying to recruit new customers for its residential offering.

The company said it will continue to serve business customers, who now generate 75 percent of revenue.

A telecom analyst at CIBC World Markets said that, "Some analysts are predicting another breakup for the company, which was split under antitrust law in 1984 and by management in 1995. The next split would divide it in three: a consumer company, a business services company and a wholesaler."

AT&T's stock has slid substantially in the last four years. It traded above $90 in 2000, but closed down 8 cents following the announcement to $14.24 on the New York Stock Exchange. The company has cut its work force 8 percent this year and said it expects to cut more. The cuts are the latest in a long series: at the end of 1999, AT&T had 148,000 employees; at the end of last year it had 61,800 employees.

Additionally, it will allow customers to terminate service within two weeks without penalty and, if the customer returns the phone within three days, have their activation fee returned by the company. Customers would have to pay for calls made on the phones.

Finally, North Dakota will receive $106,666 as part of the $5 million the three carriers agreed to pay for consumer education in the States involved. Perrell Grossman, assistant attorney general in North Dakota, said that the State had not determined what type of program might be implemented in North Dakota.

Verizon is the nation's largest wireless carrier with 38.9 million customers. Cingular has 25.4 million customers and Sprint PCS has 21 million.

Verizon began deploying Voice-over-Internet Protocol service to customers in 33 States this week. The new VoIP service, marketed under the "VoiceWing" brand name is being made available in 139 markets, including many outside of the company's traditional service area.

The service is priced at $39.95 per month and offers unlimited calls within the nation and some U.S. territories. There is a $5 per month discount if customers also take Verizon's DSL service.

The VoiceWing service is offering phone numbers in area codes in the following States: Alabama, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, and the District of Columbia.

The Nebraska Public Service Commission this week granted a
request by 31 rural telephone companies in the State to postpone implementing Local Number Portability (LNP) requirements for 18 months. The suspension will remain in effect until mid- January, 2006, unless otherwise ordered by the Commission.

The Nebraska commissioners said, according to StateNewsWire, "that intermodal LNP in the context of indirect connections between a CMRS provider and a local exchange carrier is ‘technically infeasible at this time.'"

July 28:
Co-op Day
State Fair
Minot, N.D.

August 2:
NDTA Telco/Supplier Golf Outing
Minot, N.D.

Sept. 1-2:
NDTA Annual Telephone Office Workers Conf.
Ramkota Hotel
Bismarck, N.D.

Sept. 10:
NDATC Board Meeting
Statewide Boardroom
Mandan, N.D.

Sept. 26-29:
NTCA Fall Conference
Minneapolis, MN

Oct. 4-7:
NECA Expo 2004
Las Vegas, NV

Oct. 27-28:
NTCA Region 6 Meeting
Sioux Falls, S.D.

Nov. 3-4:
NDTA Fall Conference
International Inn
Minot, N.D.

Nov. 8-9:
NTCA Legal Seminar
Hyatt Regency
San Antonio, TX

Dec. 6:
NDATC Board Meeting
Ramkota Hotel
Bismarck, N.D.

Dec. 6-8:
NDATC Annual Meeting
Ramkota Hotel
Bismarck, N.D.