The FCC issued Connect America Fund auction instructions for short-form applications to participate in the Phase II broadband-oriented fixed-service subsidy bidding, to begin July 24. The instructions "indicate how an applicant can select the specific state(s) in which it wishes to bid, select the performance tier and latency combination(s) on which it wishes to bid in its selected state(s), submit operational and financial information demonstrating that it can meet the service requirements associated with the performance tier and latency combination(s) for which it intends to bid, disclose auction-related agreements, and provide information regarding its ownership structure," said a public notice in docket 17-182 in Friday's Daily Digest. More information is available at the Auction 903 webpage.
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.
A judge approved DOJ's proposed CenturyLink-Level 3 divestitures to remedy antitrust concerns under Clayton Act Section 7 about CenturyLink's 2017 takeover. The final judgment in civil action No. 17-2028 signed Tuesday by Judge Ketanji Brown Jackson of U.S. District Court in Washington appears the same as the proposed final judgment DOJ entered Oct. 2 to clear the deal with conditions (see 1710020050). CenturyLink must divest Level 3 metro network assets in Albuquerque, Boise and Tucson. It also make de facto divestitures of 24 strands of dark fiber connecting 30 pairs of cities, through "indefeasible rights of use" for 25 years, with two five-year extensions optional. The judgment gave CenturyLink five days to make the divestitures, with up to 60 days of extension allowed, and Justice Thursday gave CenturyLink a 30-day extension. CenturyLink didn't comment. The FCC voted 3-2 to clear necessary license transfers Oct. 30 with targeted conditions (see 1710300065 and 1710310036); the deal closed Nov. 1 (see 1711010044); and DOJ issued a competitive impact statement Nov. 14 (see 1711160007). The department's complaint and other major documents are here.
The FCC updated a court on its USF transition to broadband-oriented subsidies, saying the shift will "ultimately relieve" incumbent telcos "of the federal high-cost voice service obligations at issue" in litigation. The commission declined to relieve AT&T and others of their duty to provide unsubsidized voice service during the transition, in part "because the obligation is temporary," said an agency letter (in Pacer) to the U.S. Court of Appeals for the D.C. Circuit Tuesday in AT&T v. FCC, No. 15-1038. It noted actions to begin July 24 a Connect America Fund Phase II auction of subsidies for fixed broadband and voice services in high-cost areas traditionally served by price-cap ILECs but where the incumbents declined initial CAF II support offers. In areas where another winning bidder is authorized to provide CAF-backed service, the incumbents will be relieved of their voice duties, it said. Some areas may not receive winnings bids, but they "will be a fraction of the already small fraction of carriers' service areas" at issue in this case, and they "may be eligible for funding in a second auction for 'Remote Areas,'" the letter said. "Although the July auction will not entirely moot this case, it shows that the transition is proceeding apace." AT&T didn't comment Wednesday. At Oct. 26 oral argument, judges questioned the telco's lawyer more extensively than the FCC's about the company's legal challenge (see 1710260054).
The FCC opposed a Blanca Telephone motion for an injunction pending appeal and said the telco's petition for review should be dismissed. The commission noted it found Blanca ineligible for certain USF subsidies ($6.75 million) and ordered repayment. It also noted the 10th U.S. Circuit Court of Appeals denied a Blanca mandamus petition -- asking judges to prevent the FCC from collecting -- because the telco didn't exhaust alternatives at the agency, leading to a company petition for reconsideration (see 1801020038). While that petition was pending, Blanca filed a petition with the court seeking review, said commission opposition posted Wednesday in Blanca Telephone v. FCC, No. 18-9502. The FCC said the court lacks jurisdiction to consider the petition for review because the recon petition is still pending at the agency, meaning there's no final order to review. The commission said a staff letter didn't constitute a denial of the recon petition, and it also disputed Blanca's arguments on the merits. Blanca's counsel sent us its brief (in Pacer) making detailed arguments for court jurisdiction and concluding: "The FCC failed to follow legal requirements and has acted arbitrarily, capriciously, and abused its discretion."
USTelecom said the local number portability administrator transition should "occur on time through an efficient and effective process." As a scheduled April 8 regional LNPA cutover from Neustar to iconectiv nears, USTelecom said it's concerned about a breakdown in discussions over a contingency rollback plan to the incumbent if the new systems fail (see 1802200051). The impasse happened "despite the availability of a well-thought contingency roll back plan initially developed" by North American Portability Management's transition oversight manager (TOM) and iconectiv, "with participation and input provided by Neustar, and ultimately accepted by the NAPM," said a USTelecom filing posted Tuesday in docket 09-109 on calls with aides to Commissioners Mike O'Rielly and Brendan Carr. It's "critical that the contingency rollback plan be agreed upon by all parties to the transition as soon as possible so that the transition can continue without delay," added USTelecom.
The FCC invited input on Zayo Group's planned takeover of Neutral Path Communications assets, including customers, from Near North Partners. Comments due March 19, replies March 26, said a Wireline Bureau public notice in docket 18-49 in Tuesday's Daily Digest. An application supplement said there's "no significant market overlap" (see 1803050031).
The FCC proposal to ban reseller participation in Lifeline USF drew more fire (see 1802210045 and 1802220061), now from Daniel Lyons, an American Enterprise Institute visiting fellow and Boston College associate law professor. Lifeline is a "noble" venture, but it's one of the commission's "most problematic" programs, "suffering repeated criticism" from GAO and others "for waste fraud and abuse," he blogged Monday. "But far from improving Lifeline, this proposal is likely to undermine the program and harm the vulnerable populations that the program seeks to serve." Lifeline "is not the vehicle to pursue" broadband investment, though it's a "worthy goal," he said. The reseller ban would restrict choice and ignore Lifeline consumer preferences and "the role that wireless substitution plays in low-income communities," he wrote. The FCC declined to comment.
Zayo Group and Near North Partners said there's "no significant market overlap" between Zayo and Neutral Path, NNP's parent. They responded to an FCC staff request to supplement their application to transfer Neutral Path assets to Zayo. "Neutral Path services focus on long haul links rather than metro networks," including a "long-haul fiber route from Minneapolis, MN (with an extension to Rochester, MN) to Omaha, NE," said the filing Monday in docket 18-49. "Since Zayo has an extremely limited network in Omaha, Minneapolis is the primary metropolitan area where Zayo and Neutral Path have overlapping, owned fiber facilities. Neutral Path primarily provides service to other carriers on a wholesale basis and therefore the proposed Transaction ... will not remove a competitor serving residential or enterprise business in any market." They said potential competitors in the Minneapolis, Rochester and Omaha markets include CenturyLink, Comcast, Verizon, AT&T, Cogent, Charter Communications and Cox Communications.
The FCC partially granted an Alaska Telephone Association petition to reconsider a bureau "Map Instructions" public notice while clarifying "Alaska Plan" carriers' map data-filing duties. The Wireline and Wireless bureaus granted the petition about "the required data accuracy standard for the map collection due to be filed in 2018" and extended a March 1 submission deadline until July 1. "We also provide clarification regarding the data to be filed regarding 'community anchor institutions,'" said an order in Thursday's Daily Digest, with map instructions revised "to reflect this relief." It denied the petition otherwise. The 2016 order approving a modified Alaska Plan provided $1.5 billion in USF subsidies over 10 years to maintain, extend and upgrade broadband across remote areas of the state (see 1608310067). Fifteen rate-of-return carriers and eight wireless affiliates opted in, with the goal of providing 10/1 Mbps, but lower speeds were allowed if there were middle-mile network constraints on connecting to the internet backbone. ATA's petition said reporting requirements went beyond collecting data on middle-mile links and also covered last-mile facilities (see 1710120023). The reconsideration order "adjusts mapping requirements to allow" plan participants "to provide important information about broadband infrastructure in Alaska more efficiently," emailed ATA Executive Director Christine O'Connor.
The FCC suspended and will investigate access charge tariff revisions of Aureon (Iowa Network Access Division) that were to take effect this week. Aureon proposed the revisions to comply with a November order that partially granted an AT&T complaint that Aureon violated rules by charging for "centralized equal access" (CEA) on traffic heading to CLECs engaged in "access stimulation" schemes. That order found Aureon raised its interstate switched access rates without lowering its intrastate access rates, violating rate-cap and rate-parity rules (see 1711080059). Questioning the methodology, AT&T and Sprint then filed petitions to reject Aureon's proposed changes or to suspend and investigate them. "Substantial questions of lawfulness exist regarding how Aureon revised the switched transport rate contained in its proposed tariff revisions," so "we suspend the revisions for one day and set for investigation the question of whether Aureon complied with the Aureon Enforcement Order in revising its switched transport rate," said the Wireline Bureau order in docket 18-60 in Thursday's Daily Digest. Aureon emailed that it “fully anticipated" the agency would suspend its "tariff rate reduction, and is working with the FCC’s staff to find a resolution that ensures that CEA service remains sufficiently viable to continue to make competitive choice and advanced communications services available in rural America.” AT&T and Aureon are engaged in FCC-mediated settlement talks (see 1802230015). Meanwhile, a CenturyLink complaint against Verizon posted this week in docket 18-33 alleges Verizon didn't abide by a special-access discount arrangement and "chronically overcharged CenturyLink" through miscalculations: Verizon "did so despite being repeatedly informed of its errors" and further "systematically frustrated CenturyLink's ability to dispute Verizon's overcharges." Verizon didn't comment.