FCC Details ILEC Copper Retirement, Wholesale Service Duties in Tech Transition

The IP tech transition order generally requires ILECs to notify customers and interconnecting carriers and ISPs about planned retirement of copper lines -- including “de facto retirement” -- and to seek permission when they plan changes that discontinue traditional services to retail end users, including of CLECs. “We retain a notice-based regime for copper retirement, in contrast to the approval-based process for a … discontinuance of service,” said the agency. It noted the “interim” discontinuance rules would last until the FCC completes its rulemaking on incumbent special-access offerings to CLECs, wireless carriers and business customers.

Calling many wholesale inputs crucial to competition, the FCC said ILECs seeking to discontinue special access and “commercial wholesale platform” services affecting CLEC end-users must offer rivals replacement “wholesale access on reasonably comparable rates, terms and conditions.” The FCC said in reviewing any disputes, it would ask five questions adapted from principles proposed by Windstream, a CLEC/ILEC: Will price per Mbps increase? Will a provider’s wholesale rates exceed its retail rates? Will bandwidth options be reduced? Will service delivery or quality be impaired? Will reasonably comparable basic wholesale voice and data services be available? Positive answers to all but the last question would weigh against a finding of reasonable comparability. The FCC stressed it would look “holistically” at the “totality of the circumstances,” including, but not be limited to, the five questions, none of which would be individually dispositive.

Copper Retirement Notification

The FCC increased ILEC duties to provide notice of plans to retire copper lines. The current 90-day notice that ILECs must give interconnecting carriers was doubled to 180 days (assuming the facilities are still being used), and the scope was expanded to include all telecom service providers and ISPs directly interconnected with the incumbent’s network in the affected area. The commission rejected AT&T arguments that the expanded duties would be overly burdensome. ILECs will also be required to make “good faith” efforts to provide interconnecting entities with additional information regarding potential customer fallout.

To address “consumer confusion,” the FCC required ILECs to give retail customers notice about involuntary copper retirements affecting them: 90 days for residential customers and 180 days for nonresidential customers. The commission required incumbents to provide customers with a toll-free number and a Web page for more information, and to provide them a “neutral statement” on network changes that contained no upselling, though ILECs would be free to market separately. ADT Security Services said the notification separation was needed to prevent ILECs from using the transition to market their own services.

The commission also expanded the definition of copper retirement to “mean removal or disabling of copper loops, subloops, or the feeder portion” of such lines, or the replacement of such lines with fiber, including de facto retirement -- when failure to maintain copper lines results in the “functional equivalent of removal or disabling.” The FCC encouraged consumers to file complaints if they believe their service is poor due to copper neglect, and said it wouldn’t hesitate to take enforcement action where necessary, though it believed the threat of such action would deter de facto retirement. It also rejected Verizon’s proposal to create “safe harbors” protecting ILECs from notification duties where they have deployed fiber or face certain state mandates.

The FCC required ILECs to certify that they're complying with the notification rules, and declined to give rural carriers an exemption. The commission also encouraged ILECs to sell to rivals copper lines they no longer need.

Discontinuance Wholesale Duty Focus

The FCC required ILECs or any other carriers to file applications under Section 214 of the Communications Act seeking approval before discontinuing, reducing or impairing TDM services used as wholesale inputs that would discontinue, reduce or impair ("discontinue") services to end users, including of competitors. The agency didn't adopt its proposed rebuttable presumption that discontinuing TDM wholesale services would discontinue service to end users of others, and carriers will not have to file applications if they conclude there are no such effects. But carriers must first conduct a “meaningful evaluation” to determine the expected fallout, including by consulting with wholesale carrier customers. The existence of competitive wholesale alternatives will be an important factor in the evaluation, the agency said, “but bare speculation will not be sufficient.”

The commission rejected ILEC arguments that CLECs bear the burden of showing that incumbent discontinuances would affect their end users: “the obligation properly falls on the carrier seeking to discontinue service.” The agency said ILEC concerns about delays were misplaced because once discontinuance applications are put out for comment, they will be granted within 31 or 60 days unless blocked.

The agency said ILECs seeking to discontinue certain TDM services used as wholesale inputs by CLECs must offer replacement services at reasonably comparable rates, terms and conditions. The duty covers special access services with DS1 speeds (1.5 Mbps) and above and commercial wholesale platform services, such as AT&T’s and Verizon’s, that include voice-grade services. The agency cited the concerns of business customers such as Domino's, Sears and Starbucks if CLECs lost access to such platform services, but it denied it was reimposing UNE-P (unbundled network element platform) discounts. The commission said the record contained “compelling” allegations that CLECs would be unable to serve retail customers competitively “without reasonable access” to ILEC last-mile inputs, including for low-bandwidth voice services.

The FCC denied as “meritless” a USTelecom petition for reconsideration of an agency decision last year to apply a “functional test” when analyzing discontinuance applications, which grew out of Verizon's response to Hurricane Sandy.

The FNPRM FCC proposed to codify general discontinuance standards and sought comment on its tentative conclusions that the criteria should include, among other things: “(1) network capacity and reliability; (2) service quality; (3) device and service interoperability, including interoperability with vital third-party services (through existing or new devices); (4) service for individuals with disabilities, including compatibility with assistive technologies; (5) PSAP and 9-1-1 service; (6) cybersecurity; (7) service functionality; and (8) coverage.”