The National Exchange Carrier Association backed a FairPoint Communications request for an FCC declaratory ruling on cost recovery the telco said it's due under Connect America Fund (CAF) and intercarrier compensation (ICC) transition rules. "NECA agrees the specific CAF-ICC rules governing such calculations are unclear, and supports issuance of a ruling by the Commission clarifying application of the rules in the particular circumstances faced by FairPoint," said a filing posted Friday in docket 10-90 from the group, which administers certain telco cost-recovery pooling mechanisms. "NECA stands ready to revise and refile with the Commission FairPoint’s [eligible recovery] amounts for the periods beginning January 1, 2015 and forward as directed by the Commission, should the Commission agree with FairPoint." FairPoint, which receives USF support as a price-cap telco but is regulated as a rate-of-return carrier under the ICC transition, said rules to prevent double recovery are unjustly preventing it from collecting $4.2 million in annual revenue it formerly received from local switching support (LSS) (see 1512110070). If the FCC disagrees with FairPoint's interpretation, NECA asked it to clarify that FairPoint isn't entitled to recover LSS-related revenue requirements through NECA pools. The FCC invited comments by Tuesday (see 1512180033).
The Schools, Health & Libraries Broadband Coalition (SHLB) got support from the American Hospital Association on its December petition seeking fundamental changes to the FCC’s rural healthcare (RHC) USF program. USTelecom said the FCC should reject the petition out of hand, a position supported by other groups representing wireline companies. Comments were filed in docket 02-60.
Public Knowledge wants to build on victories for net neutrality and against cable concentration, officials said at a Thursday news-media briefing on the group's 2016 agenda. The biggest threat to the open Internet “is the persistent cable broadband stranglehold over how citizens, consumers get access to video streaming, apps, devices, traditional TV content they want,” said President Gene Kimmelman. “So, this is going to be a year that we go all-out to break that stranglehold. It ranges from the set-top box to programming contracts to the actual transmission itself.” Net neutrality was just one battle in a broader fight that continues “against cable dominance,” he said.
AT&T compared FCC partial relief for telcos to a kid shoveling only half a sidewalk after a snowstorm. In a blog post Wednesday, Vice President-Federal Regulatory Hank Hultquist noted the FCC in December partially denied a USTelecom petition that the agency forbear from applying various regulations, including a request that price-cap ILECs be relieved of universal service obligations where they no longer receive USF support (see 1512170052). “In explaining this denial, the FCC sounds an awful lot like a kid explaining why he shoveled only part of the sidewalk,” he said. “Of course, the FCC knows that it has not provided sufficient universal service support for these high-cost and extremely high-cost areas. But it hopes to escape its responsibility by invoking the farcical claim that price cap ILECs continue to be 'eligible' for other universal service support (e.g., Lifeline) in these areas.” Hultquist termed “ridiculous” FCC arguments that USTelecom didn't make the case for USF relief and that AT&T data was lacking because the agency didn’t adopt a related cost model. "If the FCC doesn’t want to fund universal service obligations in these areas, it should just get rid of them, as USTelecom asked it to do,” he said. “Unfortunately, the FCC appears determined to try to maintain the obligations without taking responsibility for them. I think it’s time for someone -- like an appellate court or Congress -- to tell them to pick up the shovel and do the job right.” AT&T has challenged the order and a related previous order in court (see 1601110036). The FCC had no comment Wednesday. Chairman Tom Wheeler had proposed some extra USF voice support for carriers, but Commissioner Ajit Pai said it was inadequate and an agency majority didn't vote for it.
NTCA said many rural carriers can't estimate their company-specific impact of the FCC’s “potential bifurcated approach” to updating rate-of-return USF mechanisms for broadband coverage. Reform details remain unsettled, the RLEC group said, and “average schedule” carriers have access only to “industrywide aggregate ‘price-outs’ that” are unlikely to reflect their particular results, and to their own spreadsheets consisting of “hundreds, if not thousands, of inputs,” which also remain works in progress. “We encouraged the Commission to remain open to simpler, more straightforward ways of achieving the same goals of reform via 'modules' (e.g., new limits or policy changes) that could be applied to any distributional mechanism rather than creating substantial new complexity by remaking the underlying distribution calculations,” NTCA said in a filing on an FCC meeting it had that was posted Monday in docket 10-90. It backed “sensible transitions” to how the costs of prior investments would be treated -- such as operating expense limits -- under an overhaul, including the proposed bifurcated approach, which would generally treat old investments under old rules and new investments under new rules. It's unclear how new limits or caps on prior investments, most of all sunk costs, would be consistent with the bifurcated approach, the group said, but if they're instituted, carriers would need time to adjust.
Tracfone drew a line in the sand with AT&T and the FCC on Lifeline USF, as the agency considers expanding the low-income support program to broadband and overhauling its administration. Much of AT&T’s view is built on the belief that Lifeline is not a “service” but a “benefit” to be provided to consumers, such as provided by the Supplemental Nutrition Assistance Program (SNAP or food stamps), Tracfone said in a filing posted Monday in docket 11-42, responding to a recent AT&T letter (see 1512220050). But “Lifeline is not a benefit; it is a service provided by eligible telecommunications carriers to qualified low-income households,” the wireless reseller said. It said the service designation was expressly spelled out in sections 54.401(a) and 54.401(c) of the FCC’s rules and Section 254(b)(3) of the Communications Act. "The Lifeline program was conceived by the Commission as a service program; it was codified as such; and any conversion of the program from a service program to what AT&T calls a ‘benefit’ a la SNAP, would require enabling legislation,” Tracfone said. “Nothing in the Communications Act ... provides any authority for the Commission to re-invent Lifeline as a direct government to consumer benefit.” Tracfone also disputed AT&T arguments that switching carriers under Lifeline is complicated. It said AT&T’s “real reason” for proposing to convert Lifeline to a SNAP-type benefits program is stated in its letter: "The information and processes required to achieve this discounting is unique to Lifeline consumers and has no other business purpose. As a result, much is performed through manual methods." AT&T added a footnote saying it was "uneconomic" to automate related systems, said the reseller. "AT&T is candidly stating that investment of the systems needed to provide Lifeline service to consumers is more trouble to it than it is worth," Tracfone said.
Net neutrality dominated the House Communications Subcommittee hearing on four legislative measures Tuesday. Some members wondered about revising bills to achieve bipartisan consensus, but they largely showcased partisan divide in how they interpreted possible burdens from the FCC's order. The two heavily debated measures were the No Rate Regulation of Broadband Internet Access Act (HR-2666) and a discussion draft of the Small Business Broadband Deployment Act, which would codify the temporary exemption small businesses have from the order's enhanced transparency requirements.
AT&T asked a federal court to consolidate and set briefing on its legal challenges to two FCC orders affecting price-cap telco USF obligations. The request came in a petition Monday to the U.S. Court of Appeals for the D.C. Circuit that AT&T said wasn't opposed by the Department of Justice or the FCC. AT&T noted the FCC in December adopted and released an order that partially granted and partially denied a USTelecom forbearance petition seeking price-cap ILEC relief from various obligations (see 1512170052 and 1512280037). The recent order "discussed, but did not resolve in AT&T's favor, the same issues addressed" in a 2014 FCC USF order challenged by the telco earlier in 2015 (AT&T v. FCC, No. 15-1038). In the previous case, AT&T had argued the FCC should have given price-cap ILECs greater relief, including from eligible telecom carrier (ETC) voice USF obligations where they don't elect to receive new broadband-oriented Connect America Fund subsidies. The D.C. Circuit had put the previous case on hold pending commission resolution of the U.S. Telecom forbearance review and related issues in other proceedings (see 1507160032 and 1509030042). AT&T Wednesday filed a petition for review challenging the FCC's December 2015 USTelecom forbearance decision, which again denied price-cap telcos USF ETC voice relief (AT&T v. FCC, No. 16-1002). Given the "overlap of issues" in its two challenges, AT&T asked the D.C. Circuit to consolidate the cases and issue a restarted briefing schedule that would allow DOJ and the FCC at least 45 days to respond to the company's renewed opening brief.
FCC Commissioners Mike O’Rielly and Mignon Clyburn told us they still expect Chairman Tom Wheeler, in light of last year’s net neutrality order, to circulate an NPRM on the agency's oversight of privacy. FTC Commissioner Julie Brill said at CES last week she would welcome FCC oversight. A third official confirmed the NPRM is likely in coming months.
Five Georgia ILECs asked the FCC to include in their "base period revenues" (BPR) $121,774 that they said they had been unable to collect in 2012 from Halo Wireless, which went into Chapter 7 bankruptcy. Brantley Telephone, Pembroke Telephone, Pineland Telephone Cooperative, Public Service Telephone and Waverly Hall Telephone filed an emergency petition Tuesday in docket 10-90 seeking to collect their Halo charges in the BPR effective July 1, 2012. The carriers said the absent cost recovery was harming their ability to make network investments, giving the commission "good cause" to grant the request, which would "meet the objectives" of the agency's 2011 USF and intercarrier compensation transformation order. They said the relief would be similar to that the FCC granted with conditions to other carriers, including TDS Telecom. Windstream is also seeking relief for charges it said were unpaid by Halo (see 1509020059).