Connecticut Officials Urge PURA to Adopt Settlement Agreement in Frontier/AT&T, With More Commitments
Connecticut’s Public Utilities Regulatory Authority should adopt the public interest settlement agreed to by Frontier Communications, Connecticut Attorney General George Jepsen and state Consumer Counsel Elin Swanson Katz as part of PURA’s ongoing review of the telco’s proposed purchase of AT&T’s broadband, video and wireline assets in the state, said Jepsen’s and Katz’s offices Friday. The settlement, along with additional voluntary commitments from Frontier, “has satisfied the applicable criteria” PURA requires for approval of Frontier/AT&T Connecticut and makes it acceptable on public interest grounds, said Jepsen’s and Katz’s offices in a joint filing (http://bit.ly/1r6SoKE). Frontier reached the agreement with the two state offices in August (CD Aug 13 p13), but PURA later sought a redraft (CD Sept 3 p16).
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The settlement process for Frontier/AT&T Connecticut has been more complicated than usual, said Joseph Rosenthal, Office of Consumer Counsel principal attorney, in an interview. The original settlement showed PURA was likely to approve the deal, but industry observers had told us approval would not be swift and that additional review was likely to occur (CD Aug 15 p5). Frontier has set a tentative Oct. 15 closing date for the deal, which PURA appears “likely to accommodate,” Rosenthal said. PURA said it plans to issue a draft decision Sept. 30, with objections to the draft decision due Oct. 7 and oral argument set for Oct. 14. A ruling will come Oct. 15, PURA said.
Frontier agreed to 13 more commitments (http://bit.ly/1uOD59z) that align with suggestions PURA officials made during a Sept. 10 hearing for improvements to the public interest settlement, Rosenthal said. Frontier agreed to “embrace” the National Institute of Standards and Technology’s Cybersecurity Framework and to participate in PURA’s review of cybersecurity issues. The telco will file a reorganization plan within 60 days of completing the deal that will detail the telco’s Connecticut operational structure and decision-making policies.
Frontier agreed to spend at least $750,000 before the end of 2015 to upgrade the existing Cisco content delivery network to improve delivery of original content and public, educational and government programming, along with $125,000 per year in 2015 and 2016 in cash funds or in-kind services for community-based PEG programmers, boards of education and other educational technology initiatives. The telco also agreed to update PURA on its network modernization strategy, notify the authority of any plans to wholly or partially buy out any LEC and review with PURA and state officials the previous regulatory terms the authority imposed on AT&T’s state wireline assets when they existed separately as Southern New England Telephone Co. (SNET).
The Connecticut offices’ joint filing didn’t address requests from the Connecticut Internet Service Providers Association (CTISPA) and Connecticut Light and Power (CL&P) for additional commitments. Rosenthal noted the requests from CTISPA and CL&P. But he told us the OCC, Frontier and Jepsen’s office continue to believe their original settlement and the additional Frontier commitments “are all that is needed for this transaction to move forward.”
CTISPA is asking PURA to require Frontier to begin offering DSL service to ISP end users separately from phone service -- known as offering a “dry loop” -- when ISPs buy wholesale DSL transport, something AT&T hasn’t done in Connecticut but offers elsewhere (CD Sept 8 p16). “We're simply asking Frontier to commit to treating customers in Connecticut like they treat everyone else,” said Pullman Comley lawyer Brad Mondschein, CTISPA counsel. The dry loop exception was a longstanding SNET policy that AT&T never updated, Mondschein said. CTISPA continues to believe its requested commitment should be included in the settlement, but the group has said it would also accept a PURA commitment to open a separate proceeding on the dry loop exception after it approves Frontier/AT&T Connecticut, Mondschein said. “We're hoping PURA will continue to look at our issue,” he said. “We don’t view it as something that is technically difficult or expensive to implement."
CL&P is asking PURA to order AT&T to pay the company $9.25 million in “vegetation management costs” that CL&P believes the telco is responsible for in association with cleanup of CL&P lines downed during major storms in 2011 and 2012. PURA previously said AT&T is responsible for $9.25 million in cleanup costs because it benefited from the cleanup. CL&P said it’s concerned that the proposed settlement in Frontier/AT&T Connecticut “essentially lets AT&T off the hook for these costs.” PURA could act on the request by either conditioning its approval of Frontier/AT&T Connecticut on AT&T paying back the $9.25 million or order AT&T and CL&P to begin arbitration for a settlement of between $3 million and $7 million, CL&P said (http://bit.ly/1qRVkMc).