The FCC issued a notice of inquiry and a notice of proposed rulemaking for a Universal Service Fund overhaul. The action at the commission meeting Wednesday jump starts the switch from the high-cost fund to the Connect America fund, said Wireline Bureau Deputy Chief Carol Mattey. The commission will seek comment on an analytical framework and cost model aimed at containing the cost of USF and identifying the places with the greatest need, said Amy Bender, a Wireline Bureau deputy division chief. “A model that identifies efficient levels of support could be an important tool even if the commission ultimately adopts market-based mechanisms to identify supported entities and support levels,” she said.

AT&T posted a Q1 profit of $2.48 billion, down 21 percent year-over-year partly due to a $1 billion charge attributed to the federal health care overhaul. The carrier is set to expand its wireless data reach, but limited capacity will affect prices, Chief Financial Officer Rick Lindner said on a conference call Wednesday.

Net neutrality advocates pointed to a class-action lawsuit settlement in Sabrina Chin v. RCN Corp. announced this week in which the cable operator agreed to stop manipulating its broadband subscribers’ peer-to-peer file transfers and be more transparent about network management practices. “This is yet another example showing why the Federal Communications Commission needs to be given the authority over Internet access service,” said President Gigi Sohn of Public Knowledge. RCN denies it violated any laws and said it settled to avoid the cost of litigation. The episode will probably find its way into reply comments that net neutrality advocates plan to file with the FCC before Monday’s deadline.

Many aerospace officials consider Defense Secretary Robert Gates’ announcement of an overhaul of export control, to be led by the executive branch, the most significant development in years for what some consider a broken and antiquated system. But a full-fledged revamp has several steps to got to be a full fix, they said. Many in the space industry have said the International Traffic in Arms Regulations (ITAR), which restrict the movements and sales of satellites, caused lower international sales for U.S. satellite and component makers.

It’s “somewhat optimistic” to say 95 percent of the U.S. is served by broadband, said House Communications Subcommittee Chairman Rick Boucher, D-Va. Boucher said at a hearing Wednesday he had “serious concerns about the accuracy of that number” in the National Broadband Plan “and the methodology that was employed in order to derive it.” Ranking Member Cliff Stearns, R-Fla., said the figure may show the U.S. can get ubiquitous broadband without government intervention. FCC Wireline Bureau Chief Sharon Gillett cautioned that availability estimates in the plan may paint a rosier-than-reality portrait of broadband access.

CableCARDs didn’t meet the goal of Congress in Section 629 of the Telecom Act because they failed to create much of a market for consumers to buy devices from retailers that they could use to get pay TV, all five FCC members agreed Wednesday. Some expressed hope that newer gateway devices letting cable, telco-TV and DBS subscribers get online and subscription video using devices other than set-top boxes will gin up the retail market while boosting broadband use. A rulemaking on fixes to CableCARDs and an inquiry on setting standards for gateway devices to be used by all pay-TV providers was approved at Wednesday’s meeting, where Commissioner Meredith Baker voted remotely to approve all six items because of a death in her family. (See obituary in this issue.)

The FCC made a long-expected change to its automatic roaming rules Wednesday, eliminating the home roaming exclusion that had been approved as a surprise feature of the commission’s automatic roaming rules in 2007. The new order creates a presumption in favor of roaming even when a carrier owns a spectrum license in a market but has yet to build out its network there. A commission rulemaking also posed a series of questions on data roaming as recommended in the National Broadband Plan.

A small Ohio cable operator challenged two recent Media Bureau orders that require it to delete out-of-market network programming that comes from nearby TV stations, two applications for review show. Buckeye Cablevision, which operates in Toledo, asked the commission to overturn orders removing two Detroit stations from the significantly viewed list at the separate requests of LIN’s Toledo Fox affiliate WUPW and Disney’s own Toledo ABC station WTVG. The appeals tie the question to the current issue du jour of retransmission consent policy.

Hypercube Telecom was dealt a setback and set itself back in separate actions in California and Texas. Hypercube, a competitive local exchange carrier, is in a long-running dispute with interexchange carrier Level 3 Communications. In California, a utility commission administrative law judge dismissed a Hypercube claim against Level 3. And Hypercube withdrew a complaint against Level 3 in Texas, where utility commission staff had prepared a recommendation that commissioners there dismiss Hypercube’s complaint.

The FCC has put an unrealistic amount of work on its agenda to complete in too short of a time frame following release of the National Broadband Plan, said Larry Darby, former Common Carrier Bureau chief and FCC chief economist, during a New York Law School panel discussion late Monday. Some of the issues the FCC plans to tackle will likely elude easy resolution and Congress may have to step in, Darby warned.