Ian Cohen

The 11th U.S. Circuit Court of Appeals is sending an FCC pole attachment case to the 9th Circuit. A commission motion to transfer the litigation to the 9th Circuit was granted by 11th Circuit Judge Kevin Newsom's brief order (in Pacer) Friday in American Electric Power Service, et al. v. FCC, No. 18-14408. Electric utilities are challenging an August order streamlining "one-touch, make-ready" processes and making other pole attachment changes (see 1808090011). FCC and AEP representatives didn't comment. Citing petitions to reconsider, the commission asked the 9th Circuit to hold in abeyance an August ruling barring local moratoriums on broadband deployment (which was attached to the pole attachment order) and a September ruling-order to remove local barriers to small-cell wireless deployment.

The FCC ordered Iowa Network Access Division (Aureon) to change its rate tariff for interstate switched transport in its centralized equal access service delivering long-distance traffic to small telcos throughout the state. Separately, Commissioners found a South Dakota Network (SDN) revised rate tariff for its CEA service unlawful. "Substantial questions of lawfulness remain" about Aureon’s rate, including "whether Aureon’s cost-based support demonstrates compliance with the Commission’s affiliate transaction rules," said a unanimous commission order in Friday's Daily Digest and docket 18-60. It directed Aureon to file a revised rate tariff and cost support within 60 days, and an accounting order remains. After a previous order rejected Aureon's rate tariff of 0.576 cent per minute because it was higher than a competitor benchmark rate of 0.5634 cents and had insufficient cost support, the provider in September filed a reduced rate tariff of 0.296 cent. But it drew continued opposition from AT&T, and the FCC found Aureon failed to justify its cost-support calculations, "paying its affiliate Network Division less than the lower of: (1) the fair market value of the leased facilities; and (2) the fully-distributed costs of the leased facilities." The agency didn't address "all of the deficiencies or questions raised in the record," and expects Aureon's revised tariff "to include complete cost support and explanatory material" covering all issues. AT&T is pleased "the FCC has again seen through Aureon’s attempts to inflate its rates through questionable regulatory accounting practices," it emailed. The order is a "continuation of the sudden, perplexing change in how the Commission regulates CEA service: applying onerous ILEC accounting rules even though the Commission has classified Aureon as a CLEC," emailed Aureon's lawyer, Fletcher Heald's James Troup. "Without explanation, the Commission is regulating Aureon differently than every other carrier." He said Aureon’s CLEC rate benchmark (ceiling) of 0.5634 cent is reasonable and lawful under the rules. It's contrary to regulations to require Aureon to reduce its tariff rate further below the benchmark, he said. AT&T and Aureon are challenging several previous FCC decisions at the U.S. Court of Appeals for the D.C. Circuit. In the other proceeding, the FCC said the benchmark rate applicable to SDN's tariffed interstate switched access service is 0.2288 cent, the tandem switching rate CenturyLink charges in South Dakota. SDN's 0.4871 cent rate unlawfully exceeds the benchmark and must be revised within 60 days, said the unanimous order in docket 18-100. SDN is reviewing the order.

The FCC is ready to authorize $140 million in Connect America Fund support for fixed broadband and voice services offered by some Phase II auction winning bidders, said its Rural Broadband Auctions Task Force, Wireline Bureau and Office of Economics and Analytics. To be authorized for the 10-year support amounts, long-form applicants identified in an attachment "must submit acceptable irrevocable standby letter(s) of credit and Bankruptcy Code opinion letter(s) from their legal counsel for each state where they have winning bids that are ready to be authorized prior" to 6 p.m. EDT March 13, said a public notice in Thursday's Daily Digest and docket 17-182. Staff is reviewing long-form application information on a rolling basis, the PN said. An applicant not identified in the PN that submitted all required information will be included in a future notice after staff's review.

Comments are due March 14, replies March 21 on a Broadband VI request for waiver through Dec. 1 from the FCC Wireline Bureau's updated Lifeline minimum speed standard for fixed broadband service, said a public notice Thursday in docket 11-42. Temporary relief to allow Broadband VI to provide 10/1 Mbps to U.S. Virgin Island customers is warranted due to the company's focus on restoring service after hurricanes damaged its network in 2017 and 2018, said its Oct. 18 petition. An Oct. 24 filing on a meeting with bureau staffers further highlighted the damage.

The FCC said OMB cleared information collection for extending a freeze on federal-state jurisdictional separations of telco cost and revenue by up to six years (see 1812170049.) A December order-waiver allows "rate-of-return carriers that elected to freeze their separation category relationships in 2001 a one-time opportunity to unfreeze and update those relationships so that they can categorize their costs based on current circumstances," says a rule for Friday's Federal Register, also effective that day. Citing a "non-substantive change," the rule said the item contains information requirements previously approved by OMB, the burdens and costs of which haven't changed.

Uniti Group put off Thursday's Q4 report to further assess impact of Windstream's bankruptcy, Uniti's biggest client (see 1902250058). Uniti expects to release the results and provide a business update no later than March 18, it said Wednesday. "This is clearly an evolving situation," Wells Fargo's Jennifer Fritzsche wrote investors Thursday. "Given that WIN's lease payment (of ~ $650MM) represents the majority of UNIT's revenue -- what happens to this lease payment during the WIN bankruptcy process?" She said the lease payment provides 69 percent of Uniti's revenue. The analyst noted her January downgrade of its shares "did not see a simple path for UNIT to fund its ~$430MM annual dividend from its own internally generated cash flow," and that was before Windstream suffered a "somewhat unexpected" court setback. A U.S. district court judge sided with bondholder Aurelius Capital Management in its dispute over Windstream's spinoff of telecom assets into Uniti and leaseback arrangements (see 1902190043).

The FCC adjusted deadlines for funding years 2016 and 2017 for 18 E-rate applicants affected by a system error. Universal Service Administrative Co. learned in March 2018 its E-Rate Productivity Center gave an incorrect service implementation deadline to some "special construction" applicants, which then caused USAC's system to assign an incorrect invoicing deadline, said a Wireline Bureau order in Thursday's Daily Digest and docket 02-6. USAC corrected the error last March to avoid further problems. "To prevent the affected applicants from the hardship of having their funding subject to recovery or their invoices rejected by USAC as a result of their reliance on these incorrect deadlines, on our own motion, we grant a limited, one-time waiver of the Commission’s special construction service implementation deadline," the order said. The applicants include the Los Angeles Unified School District and the Archdiocese of New Orleans.

Windstream said it's pleased by court approvals of its "First Day" motions in its Chapter 11 debt restructuring proceeding (see 1902250058). U.S. Bankruptcy Court for the Southern District of New York granted Windstream interim approval to gain access to up to $400 million of $1 billion in debtor-in-possession financing, which combined with cash flow is available to meet operational needs and continue operating as usual, the company said Tuesday. Windstream is focused on providing all customers with "critical voice and data services ... without interruption," said Thomas Whitehead, vice president-federal government, in a Wednesday statement. "We will continue to conduct business as usual, honor existing customer programs and roll out installations and investments as planned." He said Windstream has been "in compliance with all Connect America Fund milestones and requirements and will continue to be throughout this process." Uniti Group continues "to closely monitor Windstream’s situation, and believes it will successfully navigate through the reorganization process," said CEO Kenny Gunderman. "We were pleased to see Windstream state its intent to continue operations in the ordinary course and pay in full its service providers." Windstream's spinoff of Uniti and leaseback arrangements are the focus of a legal dispute with Aurelius Capital Management, which resulted in a court reversal for Windstream that prompted its Chapter 11 bankruptcy filing. Uniti says Windstream is its largest customer and tenant.

Frontier Communications closed up 18 percent at $2.96 Wednesday after Q4 results above some estimates. Windstream, which filed for bankruptcy Monday (see 1902250058), has fallen this week, closing Wednesday down 20 percent at 38 cents. Frontier sales were little changed from the year-ago quarter at $2.12 billion, which JPMorgan Chase's Philip Cusick emailed investors was above his forecast. The total included "subsidy and other regulatory revenue" of $94 million. Cusick and another analyst noted the quarterly loss of some 67,000 broadband subscribers missed estimates. "If there was a weakness in the quarter," it was "broadband gross additions," CEO Dan McCarthy responded to an analyst question on a call Tuesday. "Consumer customer churn of 1.94%, improved sequentially and vs. Q4 2017," the telco said. Executives expect to further reduce the portion of consumers who cancel service, focusing on broadband. "You should expect to see further progress" here, McCarthy told analysts. "We have more opportunity to improve churn." This year, "we will continue to build in [Connect America Fund] markets and continue building fiber to the home high-speed internet in some non-CAF rural areas through state funding sources," said interim Chief Financial Officer Sheldon Bruha. McCarthy later said "we hit our goal" for CAF in Q4 and "the challenge is now finding unique ways to market to that." He hopes to add such subscribers. In one state, the company had apparently slightly missed a target, he said. "It had to do with some permitting on some power to some remote locations." Frontier didn't comment further. The carrier may sell more assets, after Everest Infrastructure Partners in January bought nearly 100 of the telco's wireless towers in 17 states. "We are combing the entire country looking at different opportunities to monetize something that’s not core," McCarthy responded to another question. Real estate holdings are the "most likely candidates," he added. "My expectation is you would see some additional sales, maybe not in the near term, but as we go through the next year or so."

Comments are due March 28, replies April 12 on petitions by AT&T's BellSouth and four Alabama 911 districts for an interconnected VoIP ruling, said an FCC Wireline Bureau public notice in Wednesday's Daily Digest and docket 19-44. Petitions "request that the Commission issue a declaratory ruling to respond to the United States District Court for the Northern District of Alabama’s primary jurisdiction referral" on a dispute "regarding BellSouth’s billing of 911 charges for its business telephone service and the Alabama 911 Districts’ position that such service qualifies as [VoIP] or similar service pursuant to Alabama’s 911 statute," the PN said. BellSouth asked the FCC to clarify aspects of non-VoIP calls, and prohibit state and local governments from requiring interconnected VoIP customers to pay more in total 911 fees than comparable non-VoIP customers (see 1901280037). Clarify that IP customer premises equipment "encompasses all equipment that transmits, processes, or receives IP packets located on or within the customer’s or building owner’s premises," petitioned the 911 districts of three counties and Birmingham.