Chairman Kevin Martin circulated a draft order denying a Qwest forbearance petition opposed by competitive local exchange carriers, agency and industry sources confirmed. The draft’s market-share test doesn’t count cut-the-cord wireless subscribers, we're told. Qwest seeks relief from loop and transport unbundling rules in Phoenix, Denver, Seattle and Minneapolis. Commissioners must vote by July 26 under a statutory deadline.
Adam Bender
Adam Bender, Senior Editor, is the state and local telecommunications reporter for Communications Daily, where he also has covered Congress and the Federal Communications Commission. He has won awards for his Warren Communications News reporting from the Society of Professional Journalists, Specialized Information Publishers Association and the Society for Advancing Business Editing and Writing. Bender studied print journalism at American University and is the author of dystopian science-fiction novels. You can follow Bender at WatchAdam.blog and @WatchAdam on Twitter.
A comprehensive intercarrier-compensation revamp might not be possible by Nov. 5, FCC Commissioner Jonathan Adelstein said Wednesday at a Quebec, Canada, conference of the Organization for the Promotion and Advancement of Small Telecommunications Companies. Chairman Kevin Martin has promised a complete overhaul by then (CD July 14 p2). “I'm not sure we're really going to,” Adelstein said, predicting that the work may be broken up. If it is, the FCC should tackle phantom traffic, a “growing problem,” right away, he said.
The FCC should overhaul its collection method for fees charged submarine cable systems this year, said nine submarine cable operators. Global Crossing and Tata Communications have endorsed a proposal to create a new regulatory category for submarine cable systems carved from the existing international bearer circuit category. Friday, the nine operators submitted a revised plan addressing “concerns raised on the record that smaller-capacity systems using older technologies could be disadvantaged by a per- system fee that does not account for the particular circumstances of such systems,” they said. Under the revised plan, small-capacity systems would pay half what new, higher- capacity systems pay, they said. The revisions clarify that a consortium-owned cable system should be treated as a single system when paying the new SCS fee, even if the FCC has issued multiple cable landing licenses for it. Payment responsibility would be divided among consortium members according to commercial agreements, they said. FCC commissioners are to vote on an item about regulatory fee assessment at the Aug. 1 meeting (CD June 14 p2). The submarine cable group believes the FCC has enough information to adopt the group’s proposal Aug. 1, said an industry official close to the proceeding. The submarine cable group recently met with legal aides to Commissioners Kevin Martin, Robert McDowell and Deborah Tate, and has meetings scheduled this week with Jonathan Adelstein and Michael Copps, the official said. More carriers have said they soon will embrace the proposal, which may undergo further revision to broaden its scope, the official said. AT&T, Verizon and Qwest oppose the proposal, which they say would give submarine cable operators an unfair regulatory advantage (CD June 10 p11).
The FCC needs a long-term overhaul policy for the Universal Service Fund, FCC Commissioner Deborah Tate told an OPASTCO conference Monday in Quebec, Canada. It’s “critical” that a revamp “strikes a balance between the costs of advancing our national telecommunications infrastructure and the costs consumers are willing to bear,” she said. The current USF surcharge on interstate calls is 11.4 percent, she said.
Extend AT&T accounting-rule forbearance to all price-cap carriers, urged Windstream, joining Embarq and Frontier Communications in a Wednesday meeting with the Wireline Bureau. Embarq initially made the request in comments last month (CD June 30 p2) on whether to extend forbearance to Qwest and Verizon. The carriers want relief from cost- assignment rules requiring incumbent carriers to keep records that, among other tasks, separate interstate and intrastate costs. If the FCC extends forbearance to the Bells, it likely will apply it to smaller price-cap carriers as well, said a lawyer close to the proceeding. None of the carriers has filed formal forbearance petitions, but Section 403 of the Communications Act authorizes the FCC to act on its own motion, he said. Forbearance foes say Qwest, Verizon and other carriers shouldn’t get relief because, unlike AT&T, they are rate-of-return regulated at the state level. That logic is unlikely to sway the FCC, which probably will focus on the federal level, the lawyer said. The FCC likely will answer the Qwest-Verizon request before addressing a reconsideration petition by Sprint Nextel, competitive local exchange carriers and others challenging the AT&T order, the lawyer said. The FCC usually makes ILEC requests a priority, he said. The FCC should act on the reconsideration petition first, a Sprint spokesman said. Extending forbearance to other carriers will only “compound” the FCC’s mistake in granting AT&T’s petition, he said. Sprint is focused on the reconsideration petition and so far doesn’t plan to go to court, as the National Association of State Utility Consumer Advocates has, he said. The AT&T order doesn’t take effect until the Wireline Bureau approves a compliance plan explaining how the Bell will continue maintaining accounting information that the FCC might request in the future. AT&T is expected to file the plan soon, the lawyer said.
A federal appeals court threw an interconnection dispute between Qwest and Western Radio Services back to district court Wednesday. Western disputes a Qwest interconnection agreement written by the Bell after the companies went through arbitration at the Oregon Public Utilities Commission. Western alleged that Qwest failed to negotiate in good faith, as required by the Telecom Act, and that the PUC violated Western’s constitutional rights. A U.S. District Court in Portland, Ore., dismissed the charge against Qwest for lack of jurisdiction and the one against the PUC as unripe for decision. Western appealed to the 9th U.S. Appeals Court in San Francisco. The 9th Circuit vacated and remanded. Western couldn’t sue Qwest alleging bad faith before the PUC handled the charges, the appeals court agreed. But the commission may have done that when, shortly after the district court ruling, it approved the interconnection agreement filed by Qwest, it said. The lower court should consider whether the PUC decision is “sufficient to permit adjudication of Western’s good faith claim in district court,” the 9th Circuit said. The district court should also review whether the commission ruling affects its decision on Western’s charge against the PUC, it said. Qwest and Western Radio Services didn’t comment by our deadline.
The FCC has until Nov. 5 to explain the statutory basis for a nine-year-old interim compensation scheme for ISP-bound traffic, the U.S. Appeals Court for the District of Columbia Circuit ruled Tuesday. It granted Core Communications’ petition for writ of mandamus. A promise by FCC Chairman Kevin Martin that the agency would wrap up a comprehensive intercarrier-compensation overhaul by that date (CD May 6 p1) held no water for the court. “We have heard this refrain before,” it said. “Having repeatedly, and mistakenly, put our faith in the Commission, we will not do so again.”
The FCC circulated an order on forbearance for Qwest in four metropolitan areas, a commission source told us, declining to elaborate. Meanwhile, Sen. Jon Kyl, R-Ariz., urged commissioners to follow review tests set in the FCC order granting Qwest forbearance in Omaha. The carrier wants relief from loop and transport unbundling rules in Denver, Phoenix, Seattle and Minneapolis. Qwest and forbearance opponents have been lobbying legislators to write to the FCC (CD June 27 p9). Kyl has no “independent knowledge” of whether competition in Phoenix warrants regulatory relief, he said. “But the public policy goal ought to be free and rigorous competition, with minimal federal intervention required.” The Omaha order “may provide a good case study for the FCC review of Qwest’s latest petition,” he said. In an ex parte last week, CompTel fought the Omaha order’s applicability. “The Omaha experiment has proven unsuccessful and the Commission should avoid making the same mistake again,” it said.
Rules to protect deaf consumers from unwanted marketing and lobbying have created a double standard for how the FCC regulates telecom relay service providers and dial-tone carriers, said relay providers and others. But advocates for deaf people said marketing is one issue for which the FCC should treat TRS providers differently. “If we get abused, the fundamental principles of relay service will not meet its full potential,” said Claude Stout, executive director of Telecommunications for the Deaf and Hard of Hearing (TDI). If TRS users believe their call is being monitored or their data will be used for other purposes, they will be “less confident” to use relay service, he said. “We need to make sure that doesn’t happen.”
The FCC should grant cost-assignment rules forbearance to Embarq and all other price-cap incumbent local exchange carriers that agree to conditions the agency imposed on AT&T, Embarq said in comments on a Verizon and Qwest “me-too” request. In April, the FCC granted AT&T forbearance from cost-assignment rules requiring incumbent carriers to keep records that, among other tasks, separate interstate and intrastate costs (CD April 28 p5). But all of the me-too requests could be rendered moot. Last week, the National Association of State Utility Consumer Advocates challenged the AT&T order, appealing to the U.S. Court of Appeals for the District of Columbia.