Ian Cohen

The FCC Enforcement Bureau signed a consent decree with Vast Broadband (Clarity Telecom) to resolve an investigation into whether the company violated commission rules in selling assets to Long Lines Metro before receiving Wireline and International bureau approvals. "To settle the matter, Vast admits it failed to obtain the commission’s approval before selling assets to Metro, will implement a compliance plan, and will pay a $16,000 settlement amount," said an order attached to the consent decree Tuesday.

FCC Chairman Ajit Pai said he's "disheartened to hear" Alaska Communications is reconsidering participation in the USF Rural Health Care telecom program "because of questions about its compliance with Commission rules." He wrote CEO Anand Vadapalli Tuesday to remind him of his company's "obligations under the Communications Act and our rules." He said Alaska Communications "must continue to provide service to the rural healthcare providers it serves upon a bona fide request for service," and "must not" charge such providers "a rate higher than the urban rate." He said Alaska Communications is "prohibited from engaging in unjust and unreasonable practices or from discontinuing service to a community without prior Commission approval." Company General Counsel Leonard Steinberg responded in a statement: "Alaska Communications has been a strong supporter of the Rural Health Care program, which has enabled much needed telemedicine services in Alaska. The company is disappointed with the delays in funding for the past two funding years. Eleven months into a 12-month funding cycle, Alaska Communications has received no funding on the vast majority of its contracts with rural healthcare providers, and no decisions on that funding. Alaska Communications has absorbed considerable costs, continuing to provide service to rural healthcare providers, with no meaningful income to compensate us. We have been doing everything in our power to resolve this matter as quickly as possible and avoid any loss of service." Many parties have recently filed in docket 17-310 supporting a Schools, Health & Libraries Broadband Coalition emergency petition asking the FCC to waive a $400 million RHC budget cap.

The FCC offered newly revised Alternative Connect America Cost Model (A-CAM) support to rate-of-return telcos that accepted previously revised offers for a 10-year term, said a Wireline Bureau public notice Monday in docket 10-90. The 217 state-level offers incorporate additional support approved by the commission in March (see 1803230025) -- funding monthly costs above $52.50 per location up to a $146.10 per location cap -- and revise broadband deployment obligations. The total amount being offered is $490.5 million in annual support for 631,389 locations (506,740 of which are fully funded and 124,649 capped), said an accompanying report. It noted 289,752 locations must get at least 25/3 Mbps, 216,988 locations must get at least 10/1 Mbps, 37,133 locations must get at least 4/1 Mbps and 87,516 locations are subject to a reasonable request standard. Telephone and Data Systems was offered about $68 million in annual support for its rate-of-return carriers in 20 states. TDS "will be carefully evaluating the offer before making a final decision. We certainly appreciate the FCC's efforts to assist us in deploying broadband in rural areas," emailed a spokeswoman, noting the revised offers would add about $3 million annually to the company's A-CAM support. Arvig Enterprises in Minnesota received the single biggest state-level offer at $22.5 million. Arvig didn't comment. Minnesota got the largest amount of offers, $58.9 million, followed by Nebraska's $33.4 million, Texas' $32.8 million and Oklahoma's $32.5 million. Carriers have until June 21 to accept the offers.

Fusion closed a $600 million buy of cloud and business service assets from Birch Communications, Fusion announced Monday. The cloud deal included 50 million shares of Fusion stock and refinancing of $444 million of Birch indebtedness, Fusion said. The buyer said it completed a planned divestiture of all interests in its carrier services business, leaving cloud and businesses services as its sole focus. Fusion didn't disclose divestiture details but will say more in an SEC filing later this week, a spokesman said.

An FCC draft intercarrier compensation item is an NPRM, said a spokesman Monday, when asked about an "Updating the Intercarrier Compensation Regime to Eliminate Access Arbitrage" item on the circulation list updated Friday. "It's all about access stimulation," said an FCC official. "It's directed at lingering arbitrage schemes." The item explores whether "traffic pumpers" should have to pay for all related intercarrier compensation charges, the official said. It also asks about going to a "bill-and-keep" regime for traffic that's stimulated, said the official, who believes the key question is how to define the traffic.

Frontier Communications and Consolidated Communications posted "solid" Q1 results, as did Cogent Communications, but Windstream's were "mixed," said Well Fargo analysts in notes to investors Wednesday and Thursday on company earnings reports. Frontier's results "showed tangible evidence of operational turnaround with a slowing of customer losses. Revenue was in line with our estimates and EBITDA beat, driven in part by continued focus on cost reductions," they wrote. Consolidated's results "beat our estimates across the board," they wrote. Consolidated "was the only RLEC [so far] to add net broadband subscribers, which we view as a testament to the company’s focus on proactively improving network speeds. With the majority of carrier backhaul contract exposure in the rear view mirror, we believe CNSL is well positioned in this segment going forward. Its [FairPoint] integration is tracking ahead of schedule -- with plans to significantly expand speeds." Cogent's results were "relatively in-line with our estimates although slightly ahead of the Street. ... Constant-currency yr/yr revenue growth of 7% improved 40 [basis points] over Q4’17, although continues to be below CCOI’s longer-term 10-20% guidance given slower growth in the Netcentric business," the analysts wrote. "The Netcentric business did improve in Q1, with traffic growth up 8% sequentially and 35% yr/yr (vs. 29% last quarter) and CCOI remains optimistic this traffic growth will trend upward toward its longer-term level of ~50%." Windstream's results showed a "light" top line, "driven by enterprise weakness," they wrote. "Service revenue was $1.44B (-3.9% y/y) vs. our $1.45B est. (-3.0% y/y), and product sales were $19MM, in line with our est. Consumer revenue was $477MM vs. our $478MM est., enterprise revenue was $746MM vs. our $766MM est., and wholesale was in-line at $184MM. The company lost -2.2K net broadband subscribers and -10.8K digital TV subs vs. our estimates of -3.5K and -8.2K, respectively." The broadband results were "better than feared," they added. At Thursday's close, Frontier's stock price was up 6.5 percent, Consolidated's was down 3.4 percent, Cogent's was up 0.9 percent and Windstream's was down 4.9 percent.

The FCC said slamming complaints against Birch Communications have been resolved after the provider "responded fully" and took action. The commission said it received 17 complaints in 2015 and 2016 alleging Birch changed consumers' preferred telecom service providers without obtaining authorization and verification in violation of agency rules. "We notified Birch of the complaints and Birch responded," said a Consumer and Governmental Affairs Bureau order Tuesday. "Birch has fully absolved Complainants of all charges assessed by Birch in a manner consistent with the Commission’s liability rules."

General Communication Inc. urged "rapid completion" of rural healthcare USF commitments for funding year 2017 (ending June 30), and sought FCC relief from a $400 million program annual budget cap. "The delay in completing the commitments and disbursement process is threatening to disrupt GCI’s ability to undertake key network improvements to improve wireless and wireline broadband in Alaska during the coming construction season," said company filings (here and here) posted this week in docket 02-60 on meetings with Chairman Ajit Pai, Commissioners Brendan Carr, Michael O'Rielly and Jessica Rosenworcel, and their aides. Budget relief is needed for FY 2017 and "likely" for FY 2018, "given the large, continued increases in overall demand and the delayed announcement of the pro-rata reductions," GCI said (see 1803160040). "Finding additional funds to meet current demand in the short term, pending longer-term reforms in the rulemaking proceeding, will prevent disruption that would result from health care providers having to find additional funds in their health care budgets or being unable to pay their unexpectedly high costs of service due to the proration." Longer term, GCI stressed the need to prioritize support as the current pro-rata reductions "hit the highest cost to serve areas the hardest."

Supreme Court refusal to hear a pole-attachment case is disappointing as "the courts have consistently permitted the FCC to overstep its bounds," emailed Charles Zdebski, Eckert Seamans counsel for electric utilities, whose cert petition was denied Monday in Ameren et al. v. FCC et al., docket 17-819 (see 1804300021). "That overstepping is unfailingly to the detriment of electric utility ratepayers," he said. The FCC didn't comment. The electric utilities sought review of an 8th U.S. Circuit Court of Appeals ruling that upheld a 2015 FCC order aimed at driving down telecom pole-attachment rates to cable rate levels (see 1707310065 and 1511240071).

The FCC approved CenturyLink's proposed sale of Level 3 fiber business assets in the Boise and Albuquerque metropolitan areas to Syringa Networks and Unite Private Networks, respectively. Applications for communications license transfers were granted after no opposition, said a Wireline Bureau public notice in dockets 18-76 and 18-79. DOJ required the divestitures to address antitrust concerns in clearing CenturyLink's 2017 takeover of Level 3.