Executive from price cap carriers Frontier, Windstream and CenturyLink sought clarity on the new Universal Service Fund rules (CD Oct 28 p1) with FCC staff last week, according to an ex parte notice we obtained Tuesday. “Specifically, we sought to understand the (1) calculation of and eligible uses for Phase I [Connect America Fund] incremental support … (2) calculation … and application of the adjustment in frozen Phase I CAF support where end-user rates are below a benchmark in price-cap study areas … (3) extent to which the new Eligible Telecommunications Carrier service obligations are linked to the receipt of explicit” USF support, “(4) application of the new default reciprocal compensation rules for traffic exchanged with Commercial Mobile Radio Service providers … and (5) relationship of collected access revenue to the calculation of eligible recovery through the new Access Recovery Charge and Intercarrier Compensation Charge,” the executive said, according to the ex parte notice. Most of the new rules take effect Dec. 29, and it’s doubtful the price cap companies will challenge the order, one telecom official told us Tuesday.
The FCC changed a rule in its UnivUSF order and the change’s impact is being felt in the ongoing efforts to reform the Lifeline program. Under the USF order adopted in October (CD Oct 28 p1), an eligible telecom carrier will not meet facilities-based requirements if it uses its facilities only for directory or operator assistance.
District of Columbia residents and businesses would be expected to pay for the projected access service revenue reductions that Verizon would incur in other states as a result of the FCC’s USF/ICC order, said Betty Anne Kane, head of the D.C. Public Service Commission in an ex parte filing. She claimed one result of the FCC’s decision to mandate a “bill and keep” ICC arrangement for both interstate and intrastate access is to allow Verizon to recover revenue reductions from intrastate access services provided in other states from D.C. residents and businesses. It’s unfair because Verizon would have had no reduced intrastate access revenue in D.C., she said. Additionally, the USF order would allow price cap ILECs to transfer the unrecovered revenue requirement for that state through access recovery charge increases to its other operating companies’ residential and business customers in other states, she said. It’s “unfair, unprecedented” and “legally unjustified” for the FCC to authorize Verizon and other multi-state price cap ILECs to re-apportion intrastate revenue requirements from one state to another, she said. She urged the FCC to amend the order’s directive that the Eligible Recovery calculation for access recovery charge be performed at the holding company level, and instead direct that the calculation be performed at the operating company’s study area level. Verizon hasn’t made a decision on whether it will take advantage of the changes, a spokesman said. The USF order is a “balancing act” and a “broad framework” that needs to be looked at as a whole, he said.
The FCC can’t properly regulate next generation 911 without tackling problems with IP interconnection, CompTel said in comments filed on docket 11-153 and circulated by email on Monday. “Each and every advancement contemplated by the Commission in the deployment of NG911 is built upon the premise of using Internet Protocol (IP) as the foundation for all communications. COMPTEL fully supports this presumption,” CompTel lawyer Mary Albert said in her 19-page submission. “It also submits that the Commission’s premise represents yet another example of the need for the Commission to confirm without further delay that carriers are entitled to direct IP-to-IP interconnection pursuant to Sections 251 and 252 of the Act so that they may offer their customers access to managed, advanced NG911 services.” CLECs, in particular, have been angry that the FCC punted on IP interconnections in its USF reform order and merely order telcos to negotiate in “good faith” while the commission goes through another round of rulemaking (CD Oct 28 p1). CompTel has been aggressively pushing an IP interconnection mandate on the USF docket and now on the next generation 911 docket.
NTCA held a flurry of last-minute meetings with FCC staff just days before the group filed an appeal of the commission’s Universal Service Fund order (CD Dec 12 p7), records on docket 10-90 showed. NTCA Vice President Michael Romano joined executives from Vantage Point Solutions and TDS in two meetings with Wireline Bureau staff on Wednesday, one meeting addressing the costs of meeting increased speed standards and the second meeting addressing traffic exchanges, according to an ex parte dated Friday and released Monday (http://xrl.us/bmks85). A day later, Romano joined executives from the National Exchange Carrier Association, OPASTCO and TDS Telecom to discuss caps on operating and capital expenses, a separate ex parte notice showed (http://xrl.us/bmktat).
Friday saw at least four more appeals of the Universal Service Fund order (CD Oct 28 p1), as AT&T, NTCA, NASUCA and the Vermont Public Service Board filed in three different appellate circuits. NTCA and NASUCA each filed in the 4th U.S. Circuit Court of Appeals in Richmond, Va.; Vermont filed in the 2nd Circuit in New York; and AT&T filed its appeal in the D.C. Circuit. They join earlier appeals, one from CLEC Core Communications in Richmond (CD Dec 5 p11) and another from Pennsylvania regulators filed in the 3rd Circuit in Philadelphia (CD Dec 6 p2).
It will be “more of the same” for the FCC in 2012, Chief of Staff Eddie Lazarus told the Practising Law Institute conference Friday. The FCC still has significant work left expanding broadband adoption and addressing the country’s spectrum deficiencies, he said. Privacy experts on a separate panel said they expect the FTC and FCC to increase their focus on online privacy and cybersecurity issues in the coming year.
Competitive telcos think the FCC has turned its back on them, CLEC executives and lawyers told us. “I think the commission hasn’t taken any initiatives to promote competition,” said Eckert, Seamans telecom lawyer James Falvey. “There have been a number of issues that the CLECs have brought to the commission and said, ‘We need your help on this to promote competition.’ The commission hasn’t taken any proactive steps.”
Telcos will have collected more than $16.6 billion in Universal Service Fund revenue in the fourth quarter of 2011, the Universal Service Administrative Company projected Tuesday, based on USF forms, called 499-Qs, filled out by some 6,437 carriers, USAC said (http://xrl.us/bmkcfh). It'll be used to determine the contribution methodology for the first quarter of 2012. The latest projection is about $72 million lower than the previous quarter’s projection, which may mean the contribution factor will rise. FCC Chairman Julius Genachowski has apparently promised to tackle contribution reform next year and the matter has arisen in the confirmation of would-be commissioners Jessica Rosenworcel and Ajit Pai (CD Dec 1 p7). One ILEC official predicted that, based on the ILEC’s own analysis, the contribution factor might approach 18 percent before the end of next year.
The Pennsylvania Public Utility Commission appealed the FCC’s order on Universal Service Fund and intercarrier compensation at the 3rd U.S. Circuit Court of Appeals in Philadelphia. Another appeal from NASUCA is coming, the group’s executive director, Charles Acquard, told us. More appeals might be coming from states, analysts said. The FCC looks forward to “vigorously defending” in court its “unanimous, balanced” USF and ICC reforms, an agency official said.