Level 3 asked the FCC in meetings with aides to commissioners Mignon Clyburn and Jessica Rosenworcel to take up the interconnection issue as part of any net neutrality order. Consumer demand for video “is driving significant growth in overall traffic volume on the Internet,” Level 3 General Counsel Michael Mooney, CEO Jeff Storey and other executives told Clyburn’s aide Monday, said a Level 3 ex parte filing. Content providers, such as streaming video services, have “multiple competitive options for delivering their content to the ISP,” but “the ISP itself offers the only path for that content to reach the end user,” Level 3 said. Several of the largest ISPs “are leveraging that bottleneck control over access to their users, demanding arbitrary tolls from providers like Level 3 who carry the Internet content requested by the ISPs’ end users from the global Internet to the ISPs’ last mile networks,” the company said. “If Level 3 will not pay these arbitrary and discriminatory tolls, these ISPs refuse to augment interconnection capacity that is congested to a degree that any network engineer would agree must be augmented for the Internet to function properly. … These ISPs are degrading the experience of their own customers as a means to leverage the collection of arbitrary access tolls from the rest of the Internet.” Other Level 3 officials at the meeting were John Blount, president-North America; John Ryan, chief legal officer; and Scott Seab, senior corporate counsel. Broadband Internet access providers have a "terminating access monopoly over end users that gives them the incentive and ability to demand new access tolls from some parties, leaving degraded local delivery for online content and services end users want," Joseph Cavender, Level 3 assistant general counsel, and others told Rosenworcel’s aide on Tuesday, according to a Computer & Communications Industry Association ex parte filing provided by CCIA. Also advocating for interconnection regulations at the meeting, according to the filing, were Catherine Sloan, CCIA vice president-government relations; Dave Schaeffer, Cogent Communications CEO; Brian Chase, Foursquare Labs general counsel; Melanie Wyne, National Association of Realtors senior policy representative; Angie Kronenberg, Comptel general counsel; Sarah Morris, senior policy counsel at the New America Foundation’s Open Technology Institute; and Phillip Berenbroick, policy director of the Internet Freedom Business Alliance. "Absent strong FCC rules against commercial discrimination by such access providers, we indicated that realtors, social media and other tech entrepreneurs, long haul transit providers, CDNs and others who depend on an open Internet for transmission of online video are all at risk in the near future," said the filling made in docket 14-28. Level 3 and other proponents of interconnection rules are encouraged the FCC will take it up (see 1411130042).

Capital investments by broadband providers could decline by as much as nearly a third over the next five years if the FCC bases net neutrality rules on Communications Act Title II, said a study released Wednesday by USTelecom, which has said it would challenge reclassification in court. In an ex parte letter USTelecom also asked Wednesday for the commission to review the study. Title II proponents Free Press and Public Knowledge quickly dismissed the study. “This is another example of a made-to-order industry study, with predictions giving them the result they want, facts be damned,” said Free Press Policy Director Matt Wood. The study’s authors, Kevin Hassett and Robert Shapiro, said they had devised a new model that measures investment trends for services covered under Title II and not covered by the classification, then estimates the impact reclassification to Title II would have for both wireline and wireless. The study estimates that under the current regulatory structure, broadband providers are expected to make about $218.8 billion in new capital investments over the next five years. If the commission opts for reclassification, investments by ISPs would drop over the next five years to as low as $173.4 billion. Additional regulation, as well as the current regulatory uncertainty over net neutrality, and whether other aspects of the Internet will fall under Title II, would reduce the rate of return on the investments and deter spending, said Hassett, director of economic policy studies at the American Enterprise Institute. He was chief economic adviser to Republican presidential candidate John McCain during the 2000 primaries. Responding to a question, Shapiro said it’s not possible to factor how forbearance from Title II, as reclassification’s proponents advocate, would affect their projections. “To what level [there will be forbearance], how long it would take, what the legal process would be are all in a state of uncertainty,” said Shapiro, chairman of Sonecon, and chief economic adviser to President Bill Clinton’s 1992 presidential campaign. A reduction in investment would be significant, Shapiro said, because “the Internet plays such a critical role in the economic, social and political life” of the U.S. “Reclassification of broadband as Title II would be contrary to the national interest of broadband deployment and investment,” USTelecom President Walter McCormick said during a call with reporters. Wood called the study “absurd,” and said telecom investment reached its peak while still under Title II. “USTA's flimsy study is nothing more than a cynical attempt to scare Washington policymakers,” Wood said. The study didn’t factor in that the same infrastructure is used for voice, video and data, which are regulated differently, said Free Press Research Director Derek Turner. It also measured all capital investments, when nine “out of every 10 capital dollars spent by cable companies goes to set-top boxes and modems, not to the network,” Turner emailed. Turner's criticisms "unfortunately do not advance the debate," Hassett and Shapiro said in a statement to us. The economists said they included "reasonable assumptions" to account for the use of the same infrastructure by various services. The researchers said they did not examine cable, and stood by measuring capital investments, calling that the "the best metric for the overall impact of Title II regulation." Public Knowledge Senior Vice President Harold Feld also criticized USTelecom’s request for the study to be considered. “Of course the FCC will 'review' it, just like they review any other submission," Feld said. Of USTelecom, he said, "What do they want, a gold star?”

Although the Rev. Jesse Jackson urged FCC Chairman Tom Wheeler not to reclassify broadband as a Title II Communications Act service to impose net neutrality rules (see 1411180058), the reclassification argument is as strong as ever, a MoveOn.Org spokesman told us Wednesday. He referred to a statement by Anna Galland, executive director of MoveOn.org Civic Action, responding to President Barack Obama’s Nov. 10 backing of Title II: “With millions of Americans having submitted comments to the FCC in support of Net Neutrality and Title II, the pressure is now squarely on Chairman Wheeler and the other FCC commissioners to quickly deliver on the vision that President Obama and the American public share -- an Internet free and open for all.” Jackson expressed concern Title II would deter broadband deployment in minority communities, said a TechFreedom ex parte notice on the Nov. 13 meeting. A Title II approach “would effectively redefine broadband as a regulated telecommunications service, which could subject the broadband industry and its services to existing state and local taxes,” said an ex parte letter sent by the American Consumer Institute Center for Citizen Research, posted in docket 14-28 on Wednesday. Higher taxes would “raise consumer prices," it said. "In turn, higher consumer prices would reduce both subscribership and consumer welfare. For the broader economy, demand suppression would reduce economic output, jobs and employment earnings.”

The FCC should proceed “deliberately” before imposing “new, onerous and costly mandates” to provide backup batteries or power supplies to subscribers, American Cable Association officials told Chairman Tom Wheeler’s legal adviser Daniel Alvarez, as well as aides to the four other commissioners in separate meetings, according to an ex parte notice posted in docket 13-5 on Tuesday. The Nov. 13 and 14 meetings were among several in which providers urged caution in enacting new requirements on backup batteries, as the commission is set at Friday’s meeting to consider a draft NPRM Wheeler is circulating on issues related to the IP transition. Among them is whether the commission should take steps to oversee backup power, a top FCC official told us earlier this month, because unlike phone service on traditional copper lines, service on fiber and other networks rely on backup batteries during power outages (see 1410310047). While the item could change before Friday’s meeting, sources in industries involved in the debate expected the NPRM to seek comments on most issues, including the battery issue. An exception is that the NPRM is expected to make a tentative conclusion that incumbents have to offer competitive carriers an alternative at reasonable rates, terms and conditions when retiring last-mile services that competitors need to reach business customers, the sources said. In addition, industry sources were also expecting the commission to circulate an order before Thursday’s deadline to put items on December’s commission meeting agenda to increase CAF’s minimum broadband speed requirements from 4 Mbps to 10 Mbps. The commission declined to comment on Wednesday. Charter Communications Vice President-Regulatory Affairs Christianna Barnhart also told aides to commissioners Jessica Rosenworcel and Mignon Clyburn in meetings Nov. 13 and 14 that the commission should balance “the benefits of new backup power obligations with the cost to consumers and providers,” according to an ex parte notice posted Wednesday. Verizon Vice President-Federal Regulatory Affairs Maggie McCready and Vice President and Associate General Counsel William Johnson described to aides of commissioners Rosenworcel and Ajit Pai on Nov. 13 the company’s efforts provide “consumer-friendly backup power solutions for customers receiving service over fiber,” according to an ex parte notice.

The FCC should move ahead with Connect America Found Phase II by providing adequate funding “to bring robust broadband service to 4.2 million residential and small business locations in the hardest to serve parts" of the country. That's what Steve Davis, CenturyLink executive vice president and USTelecom chairman; Melissa Newman, CenturyLink senior vice president-federal regulatory affairs; Walter McCormick, USTelecom president; and Jonathan Banks, USTelecom senior vice president-law and policy, told commissioners Ajit Pai and Mike O’Rielly and an aide to Commissioner Jessica Rosenworcel in separate meetings on Wednesday, according to ex parte filings posted Monday. The minimum broadband speeds required under the program should be increased from 4 Mbps to 10 Mbps under certain conditions to make it economically feasible, they said. A number of factors should be considered in increasing speeds, including a requirement “to serve all very high-cost locations,” to eliminate “the cherry picking likely in auctions” and to create “a path to bringing broadband to the greatest number of locations within CAF Phase II’s limited budget,” the filing in docket 14-28 said. The “sooner the program is implemented, the sooner this massive infrastructure deployment can begin, bringing investment, jobs, and economic development to the approximately 18 percent of the land mass of country that stands to benefit from this program," the filing said.

The FCC, with Commissioner Mike O’Rielly approving and concurring only in part, denied the American Cable Association’s petition to review the cost model used to determine funding for Connect America Fund Phase II, an order released Wednesday said. The dispute was over the model used to come up with the amount price-cap carriers will be offered to serve locations in their service territory that are above a specified funding benchmark, but below an extremely high-cost benchmark, said the order adopted Nov. 5 and posted Wednesday in docket 10-90. The area also can't be served by a competing, unsubsidized provider to be eligible for funding, the order said. ACA had argued the 8.5 percent cost of money used in the model was too high because it assumed interest rates will increase. Though ACA believed the rates will remain low, the commission was not persuaded “ACA’s predictions regarding future interest rates are more valid than the Bureau’s well-reasoned predictive judgment,” the order said. The commission was also not persuaded that “using a slightly lower cost of money would have a material impact on achievement of the Commission’s universal service goals,” the order said. The Wireline Bureau didn't overstep its authority and its decisions were not “clearly in error,” O’Rielly said in a statement, but he believed a lower cost of money would “be a more accurate prediction of interest rates over five years.” O’Rielly also said he disagreed with “the assumption, implicit in the analysis" that the CAF should aim to support more locations even if they're lower cost. The program's purpose shouldn’t be to “maximize the number of locations that receive a subsidy,” he said, but to “focus support on locations that are truly high-cost and are in areas that are not served or are unlikely to be served by a competing provider.” ACA declined comment on Thursday.

FCC commissioners dismissed four petitions for reconsideration of its rural call completion order, saying reconsideration would “impair the Commission’s ability to monitor, and take enforcement action against call completion problems,” in an order released Thursday. The commission granted one request filed by USTelecom and ITTA and eased some of the order’s record keeping requirements on intraLATA toll calls. The order was adopted Nov. 4. Commissioner Mike O’Rielly concurred. Denied was Comptel’s petition that more smaller providers be excused from record-keeping and reporting requirements. The rural call completion order had only required compliance from long-distance voice providers with more than 100,000 domestic retail subscriber lines. Also denied were Sprint’s motion for reconsideration of the commission’s decision to use the call completion reports collected as the basis for subsequent enforcement action. Sprint also requested surveys by rural local exchange carriers used in the call completion orders be made available for independent review, and said the commission’s estimates on the regulatory burdens of the order were too low. Denied as well was Transcom’s petition to exempt intermediate providers that aren't common carriers from a rule barring originating providers from sending an audible ringing sound to callers before the terminating provider has signaled the called party is being alerted. The granted exemption for USTelecom and ITTA covers intraLATA toll calls that are carried entirely over the covered provider’s network. O’Rielly in a statement said the FCC “should root out call completion problems, [but] it should not take procedural and legal shortcuts along the way that undermine the agency’s credibility across proceedings.” He cited the denial of Sprint’s petition to make the RLEC surveys available, saying the commission should have made them available under protective order if necessary. He also called the order’s cost-benefit analysis “cursory,” saying they make “no attempt to quantify the costs of the rules or to quantify and compare the benefits.” Chairman Tom Wheeler said in a statement that Thursday’s order “paves the way” for data collection requirements “to become fully effective” and said he has directed commission staff to seek Office of Management and Budget approval to proceed within three business days. Commissioner Mignon Clyburn said the data collection effort isn’t enough. “Analyzing data will help isolate and investigate the issue, but it will not completely solve the problem,” she said in a statement, saying she hoped the commission will “take permanent action to address rural call completion issues as expeditiously as possible.” Commissioner Jessica Rosenworcel said the decision “resolves several pending petitions for reconsideration that will allow us to move forward with putting these rules into effect. Going forward, I hope we can move faster to bring an end to this persistent problem.”

CenturyLink requested an expeditious FCC declaratory ruling, granting permission for an IP trial to explore the impacts of exchanging business voice traffic through VoIP instead of TDM in Las Vegas, said a petition filed Thursday. Partnering with CenturyLink in the trial would be Bandwidth.com and Inteliquent, CenturyLink Vice President-Federal Regulatory Affairs Melissa Newman told us. The petition said the trial will affect 12 wire centers in Las Vegas. CenturyLink will first recruit business customers to participate voluntarily. Then CenturyLink’s CLEC affiliate will exchange voice traffic that originates and terminates in Nevada in IP format with Bandwidth.com and Inteliquent over commercially negotiated IP interconnection arrangements. CenturyLink will work with the CLECs “to identify any technical, operational and logistic difficulties and work through them collaboratively,” the petition said. CenturyLink is not, as part of the trial, seeking to discontinue any services or requesting a waiver of any commission rules, the petition said. The trial is expected to last six months from the date it's approved, a company spokeswoman told us. Though the company has been investing in expanding broadband, it maintains a TDM network in 37 states, said the filing. Since 2000, incumbent LECs like CenturyLink have lost more than half their access lines as customers switched to cable, wireless, IP-based, and other services, and “many areas served by CenturyLink have reached, or rapidly approach, the ‘tipping point,’” where “continuing provision of those legacy services [is] impractical and inefficient,” said the telco. As the transition progresses, “it will make sense to begin exchanging voice traffic with other providers through VoIP connectivity, rather than existing TDM interconnection arrangements,” the petition said. The proposed trial would complement AT&T’s IP trial in Alabama and Florida, the petition said. AT&T’s trial focuses on the impact to consumers of a transition from TDM to wireline and wireless IP-based voice services, CenturyLink said. “In contrast, CenturyLink’s trial focuses on business customers and the exchange of VoIP traffic.” The trial will look at the impact on both consumers and the company, judging such things as call quality, Newman said. The proposed trial has been in the works since before FCC Chairman Tom Wheeler circulated a draft NPRM, to be voted on at the Nov. 21 FCC meeting, on questions about the IP transition. AT&T and the FCC had no comment. The issue is unrelated to concerns CLECs have raised about the retirement of TDM services in the business market, Newman said. A spokeswoman for Windstream, which has raised the concerns, agreed after a first glance with the proposal.

The FCC has received nearly 600 bids from 181 applicants for its rural broadband experiment, the agency said. Representing $885 million in projects, the bids propose to serve more than 76,000 census blocks in all 50 states and Puerto Rico, a news release said. The agency, in the coming weeks, will identify potential winning bidders, who would have to demonstrate their ability to do the projects, the agency said. The $100 million experiment is aimed at informing the agency on how to increase rural broadband through the Connect America Fund, the release said.

Several rural carriers associations are “frustrated” rural call completion record-keeping and reporting rules still aren’t in effect, more than a year after they were approved in an FCC order, representatives from NTCA, the National Exchange Carrier Association and WTA told an aide to Commissioner Jessica Rosenworcel Thursday, said an ex parte filing posted Friday. “The record is replete with data and anecdotal information describing the extent of the problem and the serious public safety and financial ramifications of call failure,” the groups said. “Family members have been unable to contact loved ones, rural businesses have lost opportunities and customers, doctors have been unable to reach patients, hospitals have been unable to reach on-call emergency surgeons and there is a reported instance in which a 911 call center was unable to make emergency call backs.” The aide said Rosenworcel is committed to addressing the issue, said the filing, in docket 13-39. The agency said last month it’s awaiting the approval of a circulating order on the Independent Telephone and Telecommunications Alliance and USTelecom's petition to reconsider parts of the order, before sending necessary paperwork to the Office of Management and Budget (see 1409260039). The commission is expected to release the order "very soon," which would clear the way for seeking OMB approval, an FCC spokesman said. Representing the groups, according to the filing, were Jill Canfield, NTCA vice president-legal and industry; Colin Sandy, NECA senior regulatory attorney; and Derrick Owens, WTA vice president-government affairs.