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FCC Grants Consolidated-Owned FairPoint Relief on Local Switching Support

The FCC gave FairPoint Communications relief on legacy local switching support (LSS), saying it generally shouldn't have been deducted by the National Exchange Carrier Association as duplicative cost recovery under a transitional intercarrier compensation mechanism to Connect America Fund support.…

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"There generally is no duplicative recovery of LSS when rate-of-return affiliates of price cap carriers receive both CAF Phase II support and CAF ICC transition support," said a unanimous commission order Thursday in docket 10-90. "We grant FairPoint’s petition and direct NECA to correct FairPoint’s Eligible Recovery retroactive to January 1, 2015 and to restore deducted LSS-related amounts as appropriate." The FCC waived "an additional imputation requirement of the Commission’s rules to the extent necessary for FairPoint and other similarly situated carriers to obtain the funds they should have received from the recovery mechanism since January 1, 2015." A draft order circulated in March on a 2015 petition from FairPoint (see 1803190021), which Consolidated Communications purchased in 2017. FairPoint originally said its support was reduced by about $4.2 million per year due to LSS deductions, and sought to restore the support retroactive to Jan. 1, 2015 (see 1512110070). It later said, "The amounts at issue are $3.5 million for calendar year 2015, $3.3 million for 2016, $3.1 million for 2017, and continuing declining amounts subject to the ICC Transition" (see 1703060046). NECA "will proceed as directed by the Commission," emailed a spokesman without commenting on the amounts. Consolidated/FairPoint didn't comment.