Customs Duty

Frontier Communications has “a long way to go” to regain consumer trust in California, a top Democrat in the state's assembly said at a live-streamed hearing about the telco’s ongoing problems moving Verizon wireline customers to its network. Chairman Mike Gatto (D) and other Commerce Committee members slammed Frontier and the California Public Utilities Commission (CPUC) for not foreseeing the large extent of transition issues. Frontier has fixed the underlying problems that occurred when the company performed a “flash cut” of customers from Verizon to Frontier systems April 1, and will be through with the backlog from those problems in 10 days, said Frontier West region President Melinda White.

Hughes Network Systems sought a "competitively and technologically neutral bidding process" in the FCC's planned Connect America Fund reverse auction of broadband-oriented support. Hughes also said the commission should include a Remote Areas Fund framework in a CAF Phase II auction order on the tentative agenda for its May 25 meeting (see 1605050036). A Hughes filing Wednesday in docket 10-90 summarized its meetings with FCC officials, including aides to all five commissioners. Hughes talking points said "satellite broadband covers America successfully" and decreases the number of Americans without broadband access to less than 1.5 million, but "satellite capacity limits will impose constraints on actual bidding." Hughes said a competitively and technologically neutral CAF auction would maximize participation and promote market efficiency. Any FCC fiber preferences would violate such principles and result in higher costs and fewer households served, it said. If the commission doesn't hold a "completely open auction," it should set "reasonable criteria for evaluating competing bids from different types of providers," recognizing factors such as data speed, latency, capacity and economic efficiency, said Hughes, and it proposed a bidding credit or point system to balance the factors. On satellite buildout duties, it said: "Satellite providers will always be able to serve very rural customers more quickly than terrestrial providers. How much more quickly depends on the extent to which funding allows for the reservation of capacity for customers that do not currently take service.”

Mediation could break through stubborn disagreement between Verizon and striking union workers, but only if the parties are willing to negotiate, labor and mediation experts said. The strike continued into this week after the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers balked at Verizon’s “last, best and final offer” Thursday (see 1604280064). Over the weekend, Verizon cut off benefits for strikers and brought in more replacement workers. The company and unions have differed over whether a federal mediator has even yet become involved in the issue.

The North American Submarine Cable Association criticized the FCC's course in a rulemaking proposing undersea cable outage reporting rules (see 1509170047), days after the agency circulated a draft order to require such reporting (see 1604080062). "NASCA remains concerned that the NPRM is premised on an erroneous assumption that there is a hidden submarine cable outage problem," said a Monday filing in docket 15-206 on discussions the group's representatives, including from AT&T and Verizon, had last week with aides to Commissioners Ajit Pai and Mike O'Rielly. "The lack of outage reports under the existing voluntary system is due to a lack of reportable events." NASCA said data show an average of just "two faults" (events needing fixes) per year in U.S. territorial sea (within 12 nautical miles of shore) and exclusive economic zone waters (extending 200 nautical miles out) in the Atlantic Ocean and one such fault per year in U.S. Pacific Ocean areas. A Northern Mariana outage resulted from a lack of redundancy, but most U.S. undersea cable providers have "ring infrastructure systems with multiple segments serving the same route" and some have satellite backup, the group said. "The purposes of the new reporting requirements remain insufficiently defined and lack a clear statutory basis," it said. The NPRM's proposals "would require significant revision to make them workable," said NASCA. An "outage definition's '30-minutes-or-greater' loss-criterion would capture mundane events" and a "loss of 50 percent or more of a cable's capacity" standard couldn't "be meaningfully applied," it said. The FCC underestimated the costs of its reporting proposals, said the group, which proposed a more targeted framework, with an "outage" defined in terms of traffic loss and customer impact, undersea cable operators not required to submit initial notifications until 48 hours after a fault is discovered, and licensees able to determine their own reporting duties. Operators should be given at least one year to implement changes, it said. NASCA strongly backed the FCC's proposed information clearinghouse on submarine cable landings in the U.S.

Two Pennsylvania state offices supported the Public Utilities Commission’s right to investigate the quality of Verizon’s copper network. In briefs filed Friday to the PUC, the state Office of Consumer Advocate and the PUC Bureau of Investigation and Enforcement said the Verizon probe can move forward despite the telco’s arguments that an administrative law judge set an unlawful procedure for the investigation, which was requested last year by the Communications Workers of America (see 1602230036).

The FCC proposal to impose stricter privacy rules on ISPs would create an uneven playing field, favoring edge providers like Google and Amazon, doesn't use an economic approach and needlessly would impose heavy security requirements to protect customer information that is essentially public, panelists at a Technology Policy Institute discussion said Monday. But Lisa Hone, FCC associate Wireline Bureau chief, said the FCC NPRM is still just a proposal. The commission expects "vigorous comment," she said. "From a staff perspective, we’re interested in hearing what works and what doesn’t work for customers and ISPs."

The FCC can't give VoIP providers full numbering rights without classifying them as telecom carriers that provide telecom services under Title II of the Communications Act, NARUC said in challenging a 2015 order that gave interconnected VoIP (I-VoIP) providers direct access to phone numbers (see 1506180060). "Its implementing regulations giving I-VoIP providers direct access to numbers/portability" in all but name deem it a telecom service, the state regulatory group said in its brief filed late Monday (NARUC v. FCC, No. 15-1497). "An entity cannot 'be deemed' to be a telecommunications carrier unless it is offering a service that conforms to the Act's definition. In 2011, the [U.S. Court of Appeals for the] 10th Circuit rejected a similar FCC analysis." The commission's brief is due May 19.

The FCC on Thursday, over strong protests by Commissioners Mike O’Rielly and Ajit Pai, approved 3-2 an NPRM seeking comment on privacy rules for ISPs. The notice poses more than 500 questions as it probes rules for Internet providers in the wake of last year’s net neutrality rules, which reclassified broadband as a Communications Act Title II service, giving the FCC new jurisdiction. FCC officials said the change in classification necessitated ISP privacy rules. The NPRM also looks at broad changes in the agency’s customer proprietary network information (CPNI) rules.

An independent compliance officer (ICO) gave AT&T high marks for its efforts to satisfy FCC conditions on its 2015 takeover of DirecTV (see 1507280043). Donald Stern, a managing director of Affiliated Monitors who was named ICO under an agency monitoring process, said AT&T met its reporting obligations for the transaction, including submitting a report Jan. 27 on its compliance with conditions. "The staff and leadership of AT&T has been cooperative and supportive of the ICO," he said in his report to the commission, which was posted Monday in docket 14-90. Stern noted compliance and evaluation complexities for AT&T and himself, and said he hadn't been able to independently verify substantive information provided by the company. But he said he had been able to review AT&T's descriptions of its compliance systems and processes, and had begun testing to validate company data. Stern said AT&T met its reporting duties for complying with four conditions he reviewed: (1) to deploy fiber to the premises (FTTP) to 12.5 million new mass-market customer locations (only 1.5 million of which can be in new, "greenfield" housing developments) within four years; (2) to offer 1 Gbps service to schools and libraries eligible for E-rate discounts in, or contiguous with, areas where AT&T has FTTP service; (3) not to favor affiliated programming over unaffiliated programming, including through an exemption of affiliated services from usage-based allowances; and (4) to devise a program to boost broadband adoption by low-income households in the company's wireline footprint. He said initial verification testing "tends to confirm the reliability of reported FTTP information, but more testing is needed." AT&T data were generally redacted. Stern didn't report on an Internet interconnection disclosure condition, which is the subject of a separate review process.

The FCC appears likely to modify Lifeline mobile voice proposals that have raised concerns, but the specifics remain unclear, some public interest and industry officials told us Monday. Cheryl Leanza, United Church of Christ policy adviser, said she believes there will be some "moderating" changes. "I would be surprised if they didn't alter the proposal in some way. It's hard to say exactly how," she said, but "I wouldn't say it's going to change radically." Public Knowledge counsel Phillip Berenbroick said he "wouldn't be shocked" to see the FCC show some flexibility on proposed minimum service standards and their implementation timeline.