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Three Companies Object

Transcom Fights for Reconsideration of Wisconsin PSC’s Halo Wireless Decision

Three Wisconsin companies slammed Transcom Enhanced Service’s petition for rehearing and clarification of the state’s judgment of Halo Wireless Thursday in filings with the Wisconsin Public Service Commission. Transcom had partnered with Halo Wireless as part of a controversial interconnection agreement with AT&T throughout several states. AT&T and other telcos accused Halo of not paying necessary access charges, a view multiple state utility commissions upheld throughout 2012. Halo Wireless was, in proceedings emanating from the agreement, condemned in multiple state utility commissions (CD Aug 2 p8) and ultimately liquidated in July. But its affiliate, 13-year-old, Texas-based Transcom, remains active and continues to fight for reconsideration throughout different states.

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"There is no longer any basis for a claim that the Commission has jurisdiction over Transcom’s services or that certification is required, regardless of the regulatory classification of Transcom’s services,” Transcom told the Wisconsin PSC Aug. 17 (http://xrl.us/bnnvpb). The company reiterated its past arguments that it’s an enhanced service provider and referred to its 2005 bankruptcy ruling. The ruling established that Transcom “is an ESP, is not a common carrier, does not provide telecommunications service and Transcom’s traffic is access-exempt,” the company said. It asked the Wisconsin PSC to reconsider its July 27 ruling blasting Halo and its arrangement, which ordered both companies to cease and desist operations in the state within 30 days absent certification. Transcom points to Halo’s liquidation. “The Decision is based entirely on the ‘operations’ under the wireless service arrangement between Halo and Transcom,” Transcom said. “Given that this arrangement has been discontinued, the matter is effectively moot and the Decision should be vacated."

AT&T Wisconsin disagreed in its filing Thursday. Under no circumstances is the commission’s order “moot” and it remains valid today, the carrier insisted. “AT&T Wisconsin and TDS will both need to rely on the Decision to establish their right, in the Chapter 7 bankruptcy proceeding, to recover all of the terminating access charges that Halo has failed to pay but the Decision says it must pay,” AT&T said (http://xrl.us/bnnvqi). “The Bankruptcy Court left it to state commissions to determine whether Halo was liable for access charges on the toll traffic it was sending to AT&T ILECs, though the Bankruptcy Court itself will determine the amount due.” The carrier tore into Transcom’s other assertions. “The Commission quite obviously has jurisdiction,” it notes. It supports the commission’s decision that Transcom is not an ESP. Transcom is “wrong” and “merely reiterates the arguments already made in its testimony and brief and rejected by this and every other state commission,” AT&T said.

The TDS ILECs of Wisconsin also filed objections Thursday and pointed to rulings against Halo in not only Wisconsin but also Missouri, Georgia, South Carolina and Tennessee on “identical issues to the extent raised in each state” (http://xrl.us/bnnvuc). TDS referred to Transcom’s “halfhearted attempt to rehash its generic assertion” about commission authority. Halo and Transcom comprised a relationship TDS described as “alter ego” and “incestuous,” echoing prior assertions in commission orders that many of the same people have been responsible for both Transcom and Halo. TDS described Transcom as “the entity that controls the purse strings” and said Halo was “intentionally underfunded from the beginning.” This underfunding was largely why Halo was neither able nor intended to pay access invoices from terminating carriers, TDS said.

"Transcom successfully put everyone else at risk by running up huge bills to the industry, while minimizing exposure to itself,” TDS said. “Once it became likely that the game might be ended by this commission and regulators elsewhere, Transcom executive Scott Birdwell directed that Halo declare bankruptcy to ensure that the scheme could be prolonged.”

Birdwell owns 19.2 percent of Transcom and owned 50 percent of Halo, which only possessed two employees paid $500 a month, AT&T California Associate Director J. Scott McPhee testified before the Michigan Public Service Commission in April (http://bit.ly/OCCbGs). “Halo gets 100% of its revenue from a closely affiliated company called Transcom” and Birdwell was “the largest single individual owner” of Halo, he added.

In its Wisconsin petition, Transcom also argued for revisiting whether access charges were owed and asked for proof. “There is no evidence that either Halo or Transcom were actually receiving ‘access service,’ as defined in the ILECs’ tariffs,” Transcom said. AT&T reiterated the reasoning behind the PSC decision. “Since Halo received access service, Halo owes access charges,” AT&T said. “Every state commission to rule on this issue has found that Halo owes access charges.” The carrier also noted that Transcom suffers “no harm or impact of any kind” from these orders and was not asked to pay access charges, only Halo. Therefore, “Transcom has no authority to challenge it,” AT&T said. “And if Transcom wants to challenge the ruling merely to clear the way to engage in similar access-avoidance schemes with other carriers in the future, that is all the more reason to uphold the Decision."

Transcom’s activities are not limited to Wisconsin alone. In the last month, the company has been active in other state commissions as well as in court. Transcom brought the Tennessee Regulatory Authority to court. In that case, a Monday ruling granted Transcom’s motion to continue the Case Management Conference of an access charge complaint (http://xrl.us/bnnv4k). It’s now set for Sept. 20 at 10:30 a.m. The Georgia Public Service Commission also received a Transcom request for reconsideration at the end of July, and the docket is still open (http://xrl.us/bnnv5q). As in Wisconsin, AT&T Georgia and TDS weighed in with concerns in early August.

Both AT&T and TDS expressed displeasure at the length of Transcom’s Wisconsin petition, 50 pages despite a commission limit of 15. TDS tied that to its broader alleged problems and called it “blatant disregard.” TDS wanted Transcom’s petition struck for that reason alone. The Wisconsin State Telecommunications Association joined in the motion to strike Transcom’s petitions in a Thursday filing (http://xrl.us/bnnvxo). Its own arguments would match those of TDS, the association said.

Transcom declined to comment publicly on recent proceedings, as in the past.