Pai May Not Delay April 20 BDS Vote Despite Incompas Request, Which Draws Opposition

FCC General Counsel Brendan Carr rejected Incompas' previous request to release the list of counties the draft order would deem competitive and thus subject to certain ILEC legacy price and tariffing deregulation (see 1704030050). "Rules and procedures governing the public release of such information preclude the Commission from releasing it this week pursuant to your request," Carr wrote Incompas CEO Chip Pickering Friday in a letter posted Monday in docket 05-25.

Pickering pressed Pai further for the list and for a "more orderly" BDS process. "Rather than continue with a headlong rush to a vote on April 20, the Commission should take a pause, undertake the processes that it would otherwise implement after the vote in order to be able to publish its list of affected counties, and then provide a brief period for all affected entities to assess the impact," he wrote in a letter posted Tuesday. "This will allow the Commission to act with full knowledge of its proposed actions -- including the removal of protections against monopoly and duopoly pricing in areas that may be far from urban centers.”

Pickering said a delay would also give the FCC time to do a cost-benefit analysis, which Pai recently called for generally (see 1704050047). Such analysis is lacking in a draft "despite its certain extraordinary impact on the economy," Pickering wrote. "This will be a shocking blow to nearly every business, wireless user, anchor institution, and governmental agency." He said there's "no exigency" compelling an April 20 vote, which could just as easily occur in June, July or August. He said the alternatives Carr suggested for outside counsels to review highly confidential data to create their own county list "are not adequate to allow proper vetting of the draft," as they wouldn't be able to share the data with clients, business customers or interested lawmakers.

USTelecom opposed the call for postponing action. “The record in this proceeding is extensive and all parties have been given ample time to consider the data. It’s been 12 years since the FCC began looking at this issue," it emailed us. "The time to act is now.”

Some were skeptical Pai would agree to a delay. “BDS fits thematically with other meeting items, so I suspect the chairman won’t pull it," said Cowen analyst Paul Gallant. "But his instinct is to collaborate and BDS has lots of levers, so I still think there’s an opening for Clyburn to shift the draft somewhat.” A longtime industry lawyer said it's “highly unlikely that Pai will delay a vote or materially change the order." Hedgeye Potomac Research analyst Paul Glenchur emailed: "Delays are always possible, but the Commission seems pretty determined to go forward.”

It's "strange" the FCC didn't make the competitive county list public, emailed CCMI telecom consultant Andrew Regitsky, who says he has clients on both sides of BDS disputes: "I believe it should have been.”

AT&T voiced "general support" for the BDS draft proposals, said a filing posted Tuesday on a meeting with an aide to Commissioner Mike O'Rielly. It said AT&T also talked with Wireline Bureau staffers about proposed changes to the draft's X-factor productivity target for areas that would remain under price cap regulation. In an earlier filing, AT&T said it talked with bureau staffers about "the mechanics of the Competitive Market Test," which the draft proposed for determining, by county, where ILECs would be subject to pricing and tariffing regulation or deregulation of legacy "channel terminations" (akin to loops) and certain other BDS offerings. In a filing on a meeting with bureau staffers, Verizon sought various clarifications on BDS details, including that wire centers straddling different counties be assigned to one county or the other subject to an "industry consistent methodology.”

Sprint said there's "inadequate competition," especially at DS1 and DS3 levels (1.5 and 45 Mbps), and the draft's "reliance on the expectation that ubiquitous competition will one day develop, even for lower bandwidth and lower revenue services, is unwarranted." The draft's proposed deregulation of transport services and the competitive market test are "unsupported by the record, arbitrary, and a surprise to interested parties" that relied on a 2016 Further NPRM, said a filing on a meeting with aides to Pai and O'Rielly. The carrier urged a "suitable transition period to avoid the rate shock that would result from flash-cut deregulation.”

Windstream criticized the draft's "half-mile test" for determining whether facilities-based competitors could serve BDS locations served by DS1s and DS3s. "The hypothesized entry will occur, if at all, only at much shorter distances," said a filing on a meeting with O'Rielly and aides to O'Rielly and Clyburn. Windstream said the draft doesn't "even acknowledge" its detailed economic study to model deployment costs. It said a second prong to the test relied on the presence of cable "best efforts" even though the order reaffirms that such services aren't in the BDS market, and it called for an "adequate transition.”

“A transition period could make sense to respond to criticism that the order has moved quickly," Glenchur said, "but the special access docket has been open a long time and the FCC probably wants to provide some overdue clarity in a declining TDM market after an extended period." Regitsky emailed, "Pai is already giving parties 18 months from the order effective date plus current contracts and contract tariffs are not affected. I can't imagine he would give much more time than that.”

Various other parties voiced BDS concerns. Granite Telecommunications, U.S. TelePacific, the Wholesale Voice Line Coalition, and the National Association of State Utility Consumer Advocates were among those making filings in the docket.