CenturyLink criticized rivals' intercarrier compensation proposals regarding treatment of certain VoIP traffic. "Verizon’s and AT&T’s proposed distinctions are unworkable for many forms of modern network traffic, and require fine distinctions that Verizon and AT&T (and any other carrier) cannot implement," CenturyLink filed, posted Monday on meeting FCC Wireline Bureau staffers in docket 01-92. "The interpretation that Verizon suggests is both unworkable and yields arbitrary results. It is fundamentally inconsistent with the Commission’s objectives in [a 2011] Transformation Order’s VoIP provisions, which was to establish a uniform regime for VoIP access charges that would reduce unproductive litigation and disputes." CenturyLink referred to its March 4 and Dec. 6 letters providing more details. Verizon and AT&T didn't comment.
Ian Cohen
Ian Cohen, Deputy Managing Editor, is a reporter with Export Compliance Daily and its sister publications International Trade Today and Trade Law Daily, where he covers export controls, sanctions and international trade issues. He previously worked as a local government reporter in South Florida. Ian graduated with a journalism degree from the University of Florida in 2017 and lives in Washington, D.C. He joined the staff of Warren Communications News in 2019.
FCC staff granted two domestic requests to transfer control under Section 214 of the Communications Act: of HCI Telcom to IdeaTek Equity Group in docket 18-399, and of Locus Communications to Telrite Holdings in docket 19-4. The effective date for both was Sunday, said a Wireline Bureau public notice Monday.
AT&T pressed the FCC to "complete the move" to a default bill-and-keep regime of zero payments to eliminate incentives for intercarrier-compensation arbitrage. "Companies continue to game ... the system, creating irrational and inefficient economic incentives by artificially inflating switched access charge revenues," filed the telco Thursday in docket 01-92. "Moving these remaining access charges to bill-and-keep would be consistent with the Commission’s overarching goal of discouraging arbitrage" and be aligned with a 2011 order finding "that, with respect to terminating traffic, the LEC’s end user is the cost causer and therefore the LEC should look first to its subscribers to recover the costs of its network." The cost causers in this case are access stimulators that "should bear sole responsibility for the expenses," AT&T said. It suggested the FCC could also state it violates the rules to be "intentionally locating high volume services in remote areas with the prevailing purpose of abusing the switched access regime" or routing "high-volume switched access traffic to remote areas to then re-route that traffic" via IP networks to the state in which the traffic is destined. Locating operations and targeting traffic in remote areas is arbitrage that "artificially" inflates traffic and increases terminating costs borne by interexchange carriers, filed USTelecom on meetings its members had with Wireline Bureau and Office of Economics and Analytics staffers, posted Friday in docket 18-155. It said "some arbitrageurs may be able to move around to increase their revenues" making it "difficult for terminating carriers to develop alternative network designs, like direct connections." Telcos also continue to "see revenue sharing agreements and traffic imbalances" consistent with access stimulation, it said. Calling ILEC rates a cap to its rates, CLEC Wide Voice said "carrier 'self-help' refusal to pay properly tariffed rates" is its single biggest problem," it filed on meetings CEO Andrew Nickerson had with aides to every commissioner and with Wireline Bureau and OEA staffers. It urged the FCC to "end the vilification of access stimulation" -- a "valid, compensable traffic category" created by the agency -- and penalize carriers engaging in "self-help non payment."
The FCC partially granted a USTelecom, CTIA and ITTA request for a one-time waiver of rules requiring a biennial audit of certain USF-eligible telecom carriers. The groups sought the waiver of the "biennial audit requirement for ETCs that are also subject to a forensic audit by the Universal Service Administrative Company (USAC), where those two audits cover the same time period," calendar year 2017, said a Wireline Bureau order Friday in docket 11-42 and others. "Petitioners contend that these audits are duplicative and impose an unnecessary burden on those ETCs that are subject to both audits, while not advancing the public interest." The bureau found "some overlap" but said "the two audit requirements are not wholly duplicative," and granted in part a waiver of the biennial audit requirement for certain Lifeline providers, and otherwise denied it. "We hereby waive the biennial audit procedures related to: Form 497/NLAD analyses (Objective II, 2 and 3); review of eligibility documentation, recertification, and certification forms for completeness and compliance with Lifeline rules (Objective III, 2); and analysis of data reported on the Form 555 (Objective IV, 4-6)," it said.
FCC Connect America Fund and IP captioned telephone service orders take effect April 8, per rules (here and here) for Friday's Federal Register (timetable). The CAF order transitions price-cap incumbent telco legacy Phase I support to CAF II support won at auction by various parties. The IP CTS order seeks to enhance program management, combat abuse and improve emergency call management. Commissioners unanimously adopted both Feb. 14 (see 1902140032).
Zayo said it's "evaluating strategic alternatives" as it postponed a March 14 analyst day. There's no timetable or assurance of a deal, though Zayo expects to take at least "several weeks to months," it said Wednesday. Its stock closed up 13 percent at $27.48. “Zayo’s purpose is to provide mission-critical bandwidth to the world’s most impactful companies," using its fiber networks in North America and Europe, said CEO Dan Caruso. “Whether public or private, this will remain Zayo’s focus and we will continue to expand the depth and breadth of our fiber infrastructure.” The "private" mention is "especially interesting," wrote Wells Fargo analyst Jennifer Fritzsche. "We continue to believe the likely buyer of this asset is a financial one vs. a strategic one. While the press has mentioned in the past strategic interest from the likes of [CenturyLink] or Alphabet [(Google)] -- we see that as highly unlikely (we believe CTL would bring much anti-trust scrutiny). ... [T]here is a significant amount of private capital on the sidelines (both in terms of infrastructure and pension funds) wanting to put capital to work." Zayo declined further comment.
FCC staff ruled 647 of 3,252 Alaska Communications Systems locations in partially-served census blocks are eligible for Connect America Fund Phase II high-cost support. ACS didn't file a response to GCI's challenge -- asserting it served over 2,600 of the locations with voice and 10/1 Mbps -- or provide evidence the locations are unserved, said a Wireline Bureau order in Wednesday's Daily Digest and docket 10-90. It granted ACS requests to make 14 of 19 additional census blocks eligible for support after GCI said it no longer served them. ACS and GCI didn't comment.
Wells Fargo downgraded Uniti Group stock to underperform after the Windstream spinoff cut its 2019 dividend payments to about $250 million from about $435 million in 2018. Windstream's court loss in a bondholder dispute and subsequent bankruptcy filing (see 1902250058) "introduced a great degree of uncertainty into [Uniti's] story. Too much uncertainty for us," wrote Jennifer Fritzsche Monday. The analyst said it's unclear if Windstream's annual $650 million lease payments to Uniti must be renegotiated. "While we continue to believe UNIT’s fiber assets (separate from WIN) are attractive, the company’s path toward diversifying away from its WIN exposure (68% of UNIT’s revenue and ~80% of its EBITDA), has become more difficult to model." Uniti didn't comment Tuesday.
FCC staff rejected as "overly broad" an Alaska Telecom Association request to waive a requirement that carriers receiving Alaska Plan USF support submit fiber network maps accurate within 7.6 meters. ATA "fails to plead with particularity the facts and circumstances warranting relief," said a Wireless and Wireline bureaus order in Monday's Daily Digest and docket 16-271. It noted ATA's Feb. 6 petition came after some members submitted data meeting the accuracy standard and less than a month before a March 1 deadline. "Relief is unnecessary for the over fifty percent of ATA members who have already certified in their initial filing," nearly six months early, the order said. "ATA provides no detailed information on the level of accuracy of the network data that its other members possess, why they do not possess similarly accurate data, or why a majority of its members had no problem meeting the requirement." ATA declined comment Monday. GCI Communication and its United Utilities and Yukon Telephone submitted confidential information Friday "to comply as fully as possible" but "cannot certify" that all fiber information is locationally accurate to the standard. "I certify that the links depicting aerial and buried fiber are accurate to within 50 meters to an 80 percent confidence level," wrote Frederick Hitz, vice president-regulatory economics and finance. "I also certify that all other information is accurate to within 7.6 meters to a 95 percent confidence level." ATA changed its name from the Alaska Telephone Association in mid-2018.
IP captioned telephone service providers asked the FCC to keep their $1.75 per minute compensation rate, not reduce it to $1.58 starting July 1, as scheduled under a June order adopting a two-stage cut from $1.95. The record shows the further cut "risks driving down IP CTS service quality; preventing further investment in new and innovative IP CTS products and services; and possibly triggering market exit," filed Hamilton Relay, Sprint, CaptionCall and Mezmo (InnoCaption) Thursday in docket 03-123. Noting a telecom relay service administrator advisory council urged the FCC "to forego this reduction," the providers asked the agency to "act as quickly as possible" to retain the interim $1.75 rate through at least June 30, 2020.