Dwight Schmitt of Royal, Iowa has accepted the General Manager/CEO position at Northwest Communications Cooperative in Ray, North Dakota. Schmitt replaces longtime GM/CEO Ken Lund, who will retire on December 1, 2003.

Schmitt is currently the general manager of Royal Telephone Company in Royal, Iowa. Royal Telephone Company provides telephone service, Internet and cable television to customers in rural Northwest Iowa. Previously, Schmitt was the sales and marketing manager for River Valley Telephone Cooperative in Graettinger, Iowa.

Schmitt and his wife, Mary, have seven children. Schmitt will be joining Northwest Communications on November 1.

The North Dakota Public Service Commission awarded the Mental Health Association the designation as user of the 2-1-1 dialing code in North Dakota at a meeting in late September. The Commission found that the Mental Health Association had the experience and expertise necessary to provide non-emergency and referral services.

The Federal Communications Commission has designated the 2-1- 1 dialing code to provide direct access to organizations providing community information and referral services that are currently not available through the 9-1-1 emergency code or the 3-1-1 police non-emergency code. Once the 2-1-1 code is activated by the carriers upon request of the information providers, 2-1-1 can be dialed instead of the seven or ten digits currently required to reach these services.

During a open hearing period conducted by the Commission, the Mental Health Association in North Dakota offered testimony of their expertise. Additionally, no other party filed comments or a request for a hearing.

The Mental Health Association testified they have more than 30 years of experience operating the HELP-LINE, a statewide crisis intervention, information and referral service in North Dakota. Over the past three years, the Mental Health Association has been preparing for the use of North Dakota's 2-1-1 dialing code by creating a database of nearly 10,000 statewide health and human service programs, by training staff regarding 2-1-1 implementation and operation, and by securing commitments for funding and by preparing to meet the requirements for Alliance of Information and Referral Systems accreditation. During regular business hours, the HELP-LINE is answered by trained staff at the organization's office, and there are 14 volunteer Crisis Management Specialists on all during evenings and weekends.

The Mental Health Association will update the Public Service Commission throughout their administration of the program and will meet with members of the Association in early October for development of a statewide 2-1-1 plan.

Cheryl Parrino, chief executive officer of the Universal Service Administration Co. (USAC), has asked state regulators to make their eligible telecommunications carrier (ETC) orders "as specific as possible." During a meeting conducted by the National Association of Regulatory Utility Commissioners (NARUC) Committee on Telecommunications. Ms. Parrino said any confusion regarding the orders could cause a delay in universal service funds being dispersed.

Ms. Parrino recommended that regulators indicate whether a carrier is being granted ETC status for the whole state or for specific parts of the state. If the carrier is being designated as an ETC for specific study areas, the order should list the study areas or wire centers. If the carrier is being granted ETC status for a portion of a study area that should be explained, according to industry reports.

Extend America, the wireless venture based in Bismarck, North Dakota, has named Chere Heintzmann chief operating officer, George Yineman vice president-sales and Jeff Hardes chief financial officer. The company plans to launch wireless service in Bismarck and Mandan by year-end and eventually expand into South Dakota, Montana, Wyoming and Nebraska.

Ms. Heintzmann previously worked for McCaw Communications/AT&T Wireless Services and Qwest Communications International in senior executive roles. Mr. Hardesty was most recently a managing director at Koch Venture, Inc. and Mr. Yineman was vice president and general manager at Sprint PCS in Wisconsin.

FCC TO DECREASE USF CONTRIBUTION FACTOR IN FOURTH QUARTER

The FCC proposed a contribution factor of 9.2 percent of a carrier's projected collected interstate and international telecommunications revenues. The proposal represents a decrease from 9.5 percent in the previous quarter.

Contributions to the Universal Service Fund are determined using a contribution factor that the FCC calculates quarterly. Telcos may not recover, through a universal service line item fee on customers' bills, amounts above the prescribed contribution factor. The fee is applied to a customers' interstate and international calls.

Orent, the Senior Vice President of Industry Affairs for Hiawatha Communications in Munising, Michigan, will serve as one of the six board representatives of subset three, all local telephone companies with less than $40 million in annual revenues. Prior to Hiawatha, Orent held a number of positions at GTE.

Schreffler, a board member since 1997, will serve as one of the five outside directors on the board. The former founder of Mid- America Computer Corporation in Blair, Nebraska, a telecommunications data processing service bureau and software provider, served for fifteen years as President and General Manager until 1991 when he sold his interest in the company. Since then he has been an information systems consultant to Mid- America and other data processing companies.

The fifteen member NECA board includes two representatives of Bell Operating Companies, two representatives of companies with greater than $40 million in annual revenue, six representatives from all telephone companies with less than $40 million and five outside directors.

The State of Vermont has signed a three year contract with services to administer the State's Universal Service Fund. The fund provides approximately $5.3 million annually to support universal service within the State.

Over 375 telecommunications companies contribute to a fund in Vermont that supports the Telecommunications Relay Service, Telecommunications Equipment Distribution Program, Enhanced 911 and the Lifeline programs.

NECA Services also administers the Universal Service Fund programs in Texas, Oklahoma, Arizona and Arkansas.

Century Telephone had challenged ALLTEL's petition, arguing that ALLTEL was successful in providing service without receiving any high-cost support, and that providing the company with universal service funds "would give ALLTEL an unearned windfall, would work to increase charges for Michigan customers, and will ultimately jeopardize the universal service support mechanism altogether."

Century also argued that granting the petition could eventually reduce competition by creating an "uneven playing field." It also said it was concerned that wireless carriers weren't subject to the same regulatory oversight as incumbent carriers. Century said the Public Service Commission should hold-off on issuing any ETC designations until the FCC completes its review of ETC status for competitive carriers.

In granting ALLTEL's petition, the PSC said, "There is ample precedent in support of a wireless carrier's designation of ETC status," while citing three previous ETC designations granted in Michigan and the "numerous" ETC petitions approved by Federal regulators.

The Michigan PSC did reject ALLTEL's request to redefine the service areas of several incumbent local exchange carriers for the purpose of determining universal service support. The Commission said it was concerned that "cream-skimming" could occur if ETC applicants are able to "carefully craft" their service areas.

The company requested the designation for its total service area, which includes all or parts of the local telephone exchange areas served by its affiliate, Mid-Rivers Telephone Cooperative and by Range Telephone Cooperative.

PSC Chairman Anne Boyle said, according to TR's State NewsWire, "As the wireless industry grows and users become more dependent on them, it is important that we ensure dependable service and accurate billing. Other states have or are considering similar actions."

According to the Commission, four years ago, wireless carriers reached on third of total access lines in Nebraska, and the gap between the two types of carriers have been shrinking since that time. A spokesman for the Cellular Telecommunications & Internet Association pointed out that although the number of wireless subscribers has risen by 7% the number of complaints is dropping.

In late 2000, Georgia Power notified Teleport Communications it would charge an annual pole attachment rate of $53.35. Teleport filed a complaint with the FCC's Cable Services Bureau, which is now under the Media Bureau. The agency subsequently cut Georgia Power's annual rate for pole attachments to between $6.56 and $8.24. Georgia Power then appealed to the full Federal Communications Commission, which upheld the Bureau's decision. Georgia Power then appealed to the Circuit Court of Appeals.

In the decision released last week, the appeals court sided with the FCC saying, "Georgia Power did not come close to meeting its burden to explain the methodology and information underlying its pole attachment rate."

The Court continued with, "This dispute arose at a time when regulatory regime governing pole attachments was in a state of flux. Unfortunately, Georgia Power exacerbated the situation by attempting to substitute its own preferred regulations for the regime established by the FCC. Now that the FCC has fully articulated the standards that govern pole attachment disputes, we would not expect to see any similarly difficult pole attachment disputes in the future."

The Americans for Competitive Telecommunications (ACT) have released a study saying the goals of the Federal Telecommunications Act of 1996 are not being met. The study, which the group performed on behalf of the California Small Business Association and the California Small Business Round Table, finds that California telecom industry has been hurt by current regulatory rules, which have also damaged the State's high-tech economy.

The report finds that the FCC's decision to extend the use of the unbundled network element-platform (UNE-P) in its "triennial review" order is "very troublesome." It asserts that unless the Public Utilities Commission limits the use of UNE-P and prices it at a "reasonable level," true local competition will never take hold in the State. The report characterized UNE-P as a subsidized use of an existing carrier's infrastructure, maintaining that it encourages dependence on a "convoluted regulatory framework," according to TR's State NewsWire.

The Washington, D.C. city council held hearings last week on two related wireless phone bills that seek to restrict the use of hand-held phones while driving. The two measures, Bill 15-35 and Bill 15-44, would both prohibit the use of hand-held mobile phones while driving, except for emergencies. Emergency personnel would also be exempt from the measure.

Both bills also call for the city police department to keep track of whether talking on a wireless phone played a part in a motor vehicle accident, and to publish an annual report using the statistics they compiled regarding the possible relationship between the use of mobile phones and accidents.

Violators would be fined $100 under both measures. However, Bill 15-44 would also call for a point to be added to the license of offenders.

Under the voluntary program, Verizon employees would be eligible for the company's standard two weeks' severance pay for each year of employment, plus a sweetener of $15,000 to $30,000 per employee based on rank. In a memo to employees, Verizon also offered free health, vision and dental benefits for a full year for all employees who accept the offer. After the year ends, employees who qualify would then be eligible for post-retirement health benefits. Verizon also offered a 5 percent increase in pensions to all employees who accept the buyout by the deadline.

McBride, a 10-year veteran of CoBank, will oversee the bank's Communications and Energy and Water Divisions, encompassing a portfolio of 240 communications customers and almost 400 energy and water customers, with loans and leases outstanding exceeding $6 billion.

Since 2002, McBride has served as senior vice president of CoBank's Operations Division overseeing the bank's customer service, loan operations, credit support and records management departments. From 1995-2002, she was senior vice president of corporate finance for CoBank's Agribusiness Banking Group.

The action, formally known as a debarment review, stems partly from February's Colorado grand jury indictment of four former Qwest executives. The executives are accused of committing fraud and conspiracy in a 2001 deal with the Arizona School Facilities Board. The case is scheduled for trial next year. GSA also cited a civil suit against those executives by the Securities and Exchange Commission related to the same Arizona deal and to a transaction with broadband networks company Genuity in 2000.

Consideration of whether to debar Qwest comes as the GSA deliberates whether to debar Sprint, the nation's fourth-largest long distance provider, for overbilling the agency. Earlier this year, the GSA debarred bankrupt MCI, the second largest long distance company, from new government contracts.

Qwest officials declined to estimate a value of the company's annual business with the GSA. Analysts speculated it is anywhere from $50 million to several hundred million dollars.

Industry commentators note that while the plan may be good for consumers, IDT's offer could hurt rivals struggling amid a weak economy and tough competition. IDT is launching in the home turf of the number 1 phone company Verizon Communications. Last week, Verizon cut its 2003 profit outlook partly because of lax demand and, it says, regulatory rules that let rivals such as IDT lease its phone lines cheaply.

IDT's service will compete with: MCI's "The Neighborhood", which costs $50 per month in most States, up to $70 a month in some States. It has four or more features, plus voice mail; Sprint's "Complete Sense Unlimited" that costs $50 to $60. It has five features, voice mail and a 5% discount on Sprint PCS cell phone bills; AT&T's "One Rate USA", which costs $50-$55 monthly. It comes with four features. Voice mail is $5 extra; Verizon's "Freedom" plan costs about $50 to $60 a month. It comes with four features, plus voice mail.

Qwest has been given another extension to file its financial reports. The company now has until November 30 to disclose 2002 financial results, from an earlier deadline of September 30th. The company also received an extension for reporting its first and second quarter 2003 results until December 31st.

The telco is trying to complete financial statements after miscalculating more than $2.5 billion mainly from leasing space on its fiber-optic network, which prompted investigations by the U.S. Securities and Exchange Commission, GSA and Justice Department. Failure to file the documents on time put Qwest in violation of bank loan terms.

Qwest said it has "essentially" completed the restatement of its 2000 and 2001 performance, according to the Rocky Mountain News. The company hasn't provided audited results since the first quarter of 2002.

Qwest shares have declined 25 percent this year.

NTCA President John Metts urged members of the Federal-State Joint Board on Universal Service this summer to recommend to the Federal Communications Commission (FCC) that it adopt a 7- point public interest test for evaluating eligible telecommunications carrier (ETC) designations in rural areas.

Metts testified that the number of competitive ETC's eligible to receive high-cost universal service support grew 1,200 percent between the first quarter of 2000 and the second quarter of 2003. Additionally, NECA projects that support for competitive ETC's could rise to $395 million as soon as 2006.

NTCA's 7-point plan includes:

• 1-Is the additional ETC designation of the requesting carrier required to ensure that consumers living in the rural ILEC service territory have access to the nine support services listed in the definition of universal service at rates that are comparable to similar services and rates received by consumers living in urban areas?
  
  
• 2-Would the requesting ETC designation be able to provide service to the entire rural ILEC service territory, as required by FCC rules?
  
  
• 3-Do the potential benefits to the rural service area of granting the ETC designation outweigh the ultimate burdens on consumers that will occur through the added growth in State/Federal universal service funds?
  
  
• 4-Is the carrier requesting designation willing to demonstrate its cost to provide universal service to consumers living in the rural ILEC service territory?
  
  
• 5-Would the ETC designation result in excessive support to the requesting carrier based on the amount of support distributed under the identical support rule?
  
  
• 6-If the carrier seeking ETC designation is offering rural consumers universal service at a rate that is at below, or slightly above the comparable rate for supported services, why is the requesting carrier seeking universal service support?
  
  
• 7-Is the carrier requesting ETC designation willing to adhere to quality-of-service guidelines or other state-specific requirements?
  
  
  

The City of Manassas, Virginia says it plans to deploy broadband over power lines (BPL) as early as the end of this year. The City has completed a year-long BPL trial with 10 residences and one business with five computers, and has released a request for proposals for providing service to 20,000 homes and businesses. The City Council will then decide whether to move forward.

Vonage sought to have the original complaint dismissed, arguing that it provides "information services", not telephone services or telecommunications services, and as such, should not be subject to the Minnesota commission's jurisdiction.

Vonage said it had not filed a 911 plan, sent in fees or filed tariffs because, as an information services provider, it was not mandated to do so.

Separately, Wisconsin regulators have informed Santa Clara, California-based 8X8 that its Packet8 Internet voice-calling service is subject to the same rules as traditional phone companies. The company recently announced the Wisconsin Public Service Commission informed it by letter that 8X8 cannot provide voice- calling services within Wisconsin without the Commission's certification, and that the company's bills to consumers for all voice calls within the State are void.

The Association, which represents all of the incumbent local exchange carriers operating in the State, said Nextel's petition for ETC status was deficient and a grant of such status would stand contrary to the public interest because it would not further the FCC's goals of promoting universal service and developing a competitive telecom marketplace. The incumbent telcos also warned the FCC that universal service monies could be used by the wireless company to support nonspecified services.

Former North Dakotan and staff member for Senator Byron Dorgan held the position during a portion of President Clinton's second term.

Gallagher has extensive experience within the Commerce Department and NTIA where he played key roles, according to NTCA, in proceedings to authorize the commercial deployment of ultawideband devices, identify spectrum for third generation (3G) services, and allocate additional frequencies in the 5Ghz band for unlicensed use.

Prior to joining the Commerce Department, Gallagher also had served as vice president of state public policy for Verizon Wireless, and managing director of government relations at AirTouch Communications.

The association's membership is comprised of carriers, tower companies, service providers and other organizations involved in Alabama's wireless industry. More than 100 industry representatives attended their first meeting held last month in Birmingham.

MSN reports the $12 million fine is the largest one California regulators have ever imposed on a wireless carrier. The ruling also calls for Cingular to reimburse customers who paid as much as $550 to break their contracts with the company within 15 days of starting service.

The administrative law judge for the PUC wrote, "Cingular made no effort to disclose its network problems to customers by any means and, in spite of these problems, continued to prohibit returns/refunds. Cingular and its agents engaged in systematic deceptive marketing and advertising practices."

Senator Ted Stevens (R-Alaska) and FCC Commissioners Jonathan Adelstein, Kevin Martin and Kathleen Abernathy also participated in the hearing.

Although there was a wide disparity of opinions among the industry participants, there was general consensus that the universal service program base of contributions needs to be expanded if the fund is to not collapse from its own weight. Witnesses said revenues could be raised by assessing additional services, such as instate communications, and the number of providers that are currently subject to contributing.

Sprint Corporation filed requests in 7 States in September asking for eligible telecommunications carrier (ETC) status, which, if approved, would entitle them to monies from the universal service program. Sprint filed applications in Alabama, Georgia, Texas, New York, Pennsylvania, Tennessee and Virginia.

Governor Gray Davis has signed what lawmakers are calling the "nation's toughest anti-spam measure," which bars advertisers in California from advertising through unsolicited commercial
e-mails, or spam. Out-of-state advertisers will be prohibited from sending spam to California residents if the advertiser knows or should reasonably know that the e-mail address is a California
e-mail address.

The Internet tax moratorium bill, as passed by the U.S. House of Representatives, could cost States and cities at least $4 billion and as much as $8.75 billion annually by 2006, according to a study by the Multistate Tax Commission. This is far more than the $500 million the bill would have cost under its original narrow focus, the commission maintained.

Airport users can use the service to gain access to the Internet, check their e-mail or update their wireless devices.

The wireless carriers that are signatories to the "code" will display the new "Seal of Wireless Quality/Consumer Information". The 10-point plan, as summarized:

1-Disclose rates and terms of service to consumers;

2-Provide maps showing where service is generally available;

3-Provide contract terms to customers and confirm changes in service;

4-Allow a trial period for new service;

5-Provide specific disclosures in advertising;

6-Separately identify carrier charges from taxes on billing statements;

7-Provide customers the right to terminate service for changes to contract terms;

8-Provide ready access to customer service;

9-Promptly respond to consumer inquiries and complaints received from government agencies; and

10-Abide by policies for protection of customer privacy.

The full text of document will be attached to the newsletter. An electronic version can be accessed at: www.wow-com.com/ consumer/issues.

The ruling, according to NTCA, further clarified that cosmetics, toiletries such as toothpaste, dietary supplements that are merely beneficial to overall health, and other sundry items are not expenditures for medical care.

Prior to the ruling, only prescription drugs were eligible for reimbursement under the flexible spending plan. However, as many prescription drugs became available for over-the-counter purchase, consumers have had to pay the full cost of the drug, rather than just a co-payment, because many health and prescription drug plan do not cover nonprescription drugs.

The lawsuit alleges, according to the Associated Press, that the local telephone companies discriminated against S&S by charging themselves lower access rates than those offered to S&S for originating and terminating connections to customers.

S&S, based in Aberdeen, South Dakota, sold prepaid long distance service to businesses and people in South Dakota, North Dakota, Iowa and Minnesota. South Dakota Public Utilities Commission officials have said S&S could owe its South Dakota customers more than $1 million, but bonds and a letter of credit will not provide enough money to fully reimburse those customers.

Representative Wentz was a good friend of members of the independent telephone industry and will be deeply missed by those who knew and cared for her. Her son, Tom, is a member of the SRT Communications board of directors.

Nov. 5-6:
NDTA Fall Conference
International Inn
Minot, N.D.

Nov. 10-11:
NTCA Legal Seminar
Charleston, S.C.

Dec. 1-3:
NDATC Annual Meeting
Ramkota Hotel
Bismarck, N.D.