Ian Cohen

Newest FCC Commissioner Mike O'Rielly took to the official agency blog Wednesday to share his thoughts on E-rate changes (http://fcc.us/1nwynre). There’s widespread agreement that the program is “due for an overhaul,” and O'Rielly supports that effort, he said, with six provisos: E-rate “must not increase costs on consumers” by increasing USF contributions; it “must be offset by reductions elsewhere” within the fund. E-rate “must be refocused on broadband access.” E-rate matching requirements must be consistent with other federal programs; the current local match of as little as 10 percent is “much lower” than other federal programs and “can distort decision making,” O'Rielly said. E-rate funding must leverage private sector networks, “not overbuild them.” E-rate funding “must not over supply,” but rather give schools flexibility to “choose the speeds that best meet their needs.” Finally, O'Rielly said, E-rate program administration must be revised. “By streamlining processes, requiring productive oversight, and providing significant outreach, we can make school participation in E-Rate easier, stretch program dollars, and ultimately benefit more students.”

"Consumers should cheer the recent appeals court decision voiding the FCC’s net neutrality rules,” said a report published by the Heritage Foundation Wednesday (http://herit.ag/1nwzasd). “Despite the Chicken Little claims of its supporters, broadband consumers were hurt, not helped by the agency’s restrictions,” said the report, written by senior research fellow James Gattuso. “Rather than guarding against market abuses by dominant firms, the rules have been invoked in attempts to hinder innovation, impede competition, and block consumer price protections.” The report urged congressional lawmakers and FCC officials to “not restore these unnecessary and harmful regulations."

Neustar asked the FCC to “immediately rectify” the Local Number Portability Administration selection process. In a petition filed Wednesday (http://bit.ly/1aVQlmy), the company asked the commission to amend the request for proposal “to include input from all industry constituencies,” to “clarify rules governing the LNPA to ensure the selection process proceeds in a transparent and impartial manner,” and to “direct the [North American Portability Management] to pursue additional proposals consistent with the revised RFP.” The current process for selecting the next LNPA “is flawed in its design and implementation,” said current LNPA Neustar, which holds the contract through next year. Wireline Bureau Chief Julie Veach said Tuesday the bureau wouldn’t intervene and direct multiple rounds of bidding (CD Feb 12 p7). Neustar’s petition cited that letter, but only for the proposition that the bureau concurs there have been “concerns over the fairness of this process so far.” Veach had asked the North American Numbering Council to ensure its ultimate recommendation on the LNPA selection process responds directly to the concerns raised. “Given the critical significance of the issues raised herein, Neustar respectfully requests that the Commission take action on the broader set of concerns framed in this Petition, particularly the fact that the RFP criteria no longer reflect the current and evolving needs of the stakeholders as well as emerging technological challenges,” it said. Problems are myriad, Neustar said: RFP criteria are “inadequate”; there’s a “mismatch” between the RFP’s specifications and the technical requirements being provided; it doesn’t account for “critical” IP transition requirements and “new technology developments”; and it doesn’t enforce the “network compact” touted by FCC Chairman Tom Wheeler. “The longer the Commission waits to resolve these questions, the more serious potential delays and implementation challenges will become,” said Neustar. “Swift action by the FCC can correct these problems while there is still time to preserve the level of service that service providers and consumers have come to expect from the LNPA.” Wiltshire Grannis communications attorney John Nakahata, counsel for Telcordia, called Neustar’s petition “an Olympian effort to change the rules and get a do-over after flubbing its last run.” Neustar could win two ways, Nakahata told us by email. “Delay would allow it to continue to collect its over-inflated sole source fees of nearly $470 million per year. The Commission should recognize this petition for what it is -- a meritless, last-ditch desperation ploy by a company that had an opportunity for input into every stage of the process."

Inmate calling service provider Pay-Tel was granted a nine-month waiver of the FCC’s interim interstate prison call rate caps, said an order released Tuesday (http://bit.ly/1aVHi57). The waiver of the new caps, which took effect Tuesday (CD Feb 12 p12), will give Pay-Tel “sufficient time to pursue any necessary intrastate rate changes” to help it recoup costs it’s facing, now that interstate rates have been capped, said the Wireline Bureau order. In its petition, Pay-Tel said it could not recover its costs “if it is required to charge the Order’s interim interstate rates.” Rate restrictions in several states required Pay-Tel to provide intrastate service at below-average-cost rates. “Because of the interaction between these below-average-cost intrastate rates and the limits imposed by the interim interstate rate cap, Pay Tel asserts that it cannot meet its total company revenue requirement while complying both with our interstate rate caps and the relevant state rate requirements,” the order said. Pay-Tel suggested it would have to either go out of business or close up shop in the smaller facilities it serves. The facts constitute “extraordinary circumstances” that justify a temporary waiver, the order said. Pay-Tel will be allowed to charge 46 cents per minute, which is about double the interstate rate cap adopted by the FCC. The temporary waiver will also give Pay-Tel “an opportunity to address below-average-cost rate mandates at their source -- at the state level and with the individual facilities it serves,” the order said. If the commission takes action on intrastate prison calling caps before the nine months have passed, that new order would supersede this waiver, the bureau said.

Comments are due March 13 on the proposed transfer of AT&T’s Connecticut wireline assets to Frontier, the FCC Wireline Bureau said in a public notice Tuesday (http://bit.ly/1aVKuh9). The relevant licenses and authorizations are held by AT&T’s wholly owned subsidiaries, the Southern New England Telephone Co. (SNET) and SNET America. The operations there include about 900,000 access line customers, 415,000 broadband customers and 180,000 video customers. Reply comments or oppositions are due March 28 in docket 14-22.

Interim interstate prison calling rates took effect Tuesday. The rates cap per-minute rates at 21 cents a minute for prepaid calls and 25 cents a minute for collect calls -- a decrease in some places of more than 80 percent. “Although the wheels of justice often turn slowly, relief for families of inmates has finally arrived,” said a joint statement by FCC Chairman Tom Wheeler and commissioners Mignon Clyburn and Jessica Rosenworcel. “This means that many families will no longer have to choose between talking to their loved ones in prison and paying their utility bills. It means that society will benefit from the decreased rates of recidivism that family contact brings.” Prisoners and their families “are among the most vulnerable members of society,” the chairman and commissioners said. A spokesman for Commissioner Ajit Pai, who voted against the prison calling order, declined to comment. A spokesman for Commissioner Mike O'Rielly also declined comment. In a letter Monday, prison phone service provider Securus asked the FCC Wireline Bureau for guidance on the interim rate caps adopted in the commission’s prison calling order (http://bit.ly/1ogFMy4). Securus said the order sets interstate rates at 21 cents per minute for prepaid calls and 25 cents per minute for collect calls, or $3.15 and $3.75 for a 15-minute call. The order also gives carriers “flexibility” to calculate rates by “calculating their compliance on the basis of a 15-minute call.” Based on that language, “several correctional authorities have asked Securus whether it can adopt interstate rates that are $3.15 for all prepaid calls and $3.75 for all collect calls, assessed as a flat rate. They would prefer this rate structure."

The FCC and National Institute on Aging will host a workshop Feb. 18 to gather input on the types of research needed to “improve the functional equivalency and efficiency of Telecommunication Relay Services during and after the IP transition,” said a Consumer and Governmental Affairs Bureau public notice Monday (http://bit.ly/1far8AN). Panels will focus on developing a platform for the delivery of IP-based relay services to consumers and exploring “innovative IP-based technologies for relay services during and after the transition,” the notice said. FCC Chief Technologist Henning Schulzrinne and Commissioner Mignon Clyburn will deliver opening remarks.

Comments are due March 3 on a CenturyLink petition seeking to convert its remaining average schedule ILEC affiliates to price-cap regulation effective July 1, said an FCC public notice Monday (http://bit.ly/1faqSSf). It said CenturyLink also seeks waivers of applicable regulations “to the extent necessary to enable such conversion.” Replies in WC docket 14-23 are due March 18.

There’s an ongoing need for a new Connect America Fund program tailored to rate-of-return regulated rural LECs to help them “sustain and promote technological evolution for the benefit of all rural customers,” NTCA told an aide to FCC Chairman Tom Wheeler Friday, an ex parte filing said (http://bit.ly/1farA1O). Such a program would be tailored for smaller company operations, would recognize the “unique challenges” associated with being a smaller network in rural areas, and wouldn’t require “complex rules changes, unpredictable shifts, or wholesale disruptions in universal service distribution,” NTCA said.

Several CLECs are concerned about the “potential impact on our companies and on competition” that could result from the local number portability administration selection process currently under way. Comptel, Cbeyond, HyperCube and TDS Metrocom forwarded a letter to the FCC (http://bit.ly/1fPTdkN) that they had sent to North American Portability Management in November. “We now understand from the NAPM that it will not be responding to our correspondence during the selection process,” the CLECs said, urging the commission to properly consider their concerns. According to the attached letter to NAPM (http://bit.ly/1iDcplv), previously unpublished, the CLECs had three main concerns. First the potential “regional multi-vendor approach” could “create economic and operational hurdles” if every carrier needs to deal with a different LNPA services vendor in each region, the CLECs said. This could cause some carriers to “rethink operating in multiple LNPA regions,” they said. “We believe that your assessment of the bids must take into account the increased costs for smaller carriers.” Second, the cost of any transition would hurt smaller carriers, which “simply do not have the wherewithal to undertake a costly and complex transition to a new LNPA provider, particularly if our transition costs are not offset by considerably lower LNPA charges to our companies,” the CLECs said. Third, the impact on consumers and businesses needs to be given adequate weight in evaluation of the proposals, the CLECs said. “If a change in LNPA is made, there is substantial risk that the transition will not be smooth,” with “failures along the way” as carriers try to modify their systems in such a short period, they said. “LNP is our lifeblood; it’s how we get customers. If what were one-day ports slip to become one-week ports or one-month ports under a new LNPA, it will have a devastating impact on small carriers and our ability to compete for business.” Large companies can weather such rough patches far more easily than can smaller companies, the CLECs said. “Please ensure that the potential for disruption of a smooth functioning LNPA process, and the impact of such disruption on small carriers and their customers, is thoroughly considered and evaluated as you examine the various proposals.” An “uninformed” LNPA selection could have “devastating consequences” for smaller carriers, the CLECs said. Neustar and Telcordia have both asked the FCC to step in and “restore transparency” to the bidding process (CD Feb 7 p9).