Adam Bender

At least three commissioner’s offices still haven’t heard from Chairman Kevin Martin about his plan to complete broad intercarrier compensation reform by mid-November, multiple FCC sources told us. Commissioner offices have met only with industry lobbyists scrambling to learn what the FCC intends to do, we're told. But at a Friday press briefing, Martin stood by a six-month pledge he authorized a lawyer to make May 5 in oral argument at the Court of Appeals for the District of Columbia Circuit (CD May 13 p2). “The commission should be in a position to try and find a way to address both broader intercarrier compensation and potentially at least some of the broader Universal Service reform,” the chairman said, terming the issues connected. The interim USF cap was a “critical first step” toward that goal, he said.

Phone and cable companies split in comments on a rural incumbent carrier’s petition concerning VoIP interconnection rights. Vermont Telephone wants the FCC to rule that it need not interconnect with Comcast Phone, a VoIP carrier. Phone companies largely sided with VTel, noting that only telecom carriers have interconnection rights. But cable said VTel’s petition failed to distinguish between VoIP providers and their wholesale carrier partners.

The FCC should “step up” and tackle universal service issues, since congressional efforts are stagnant, Rep. Lee Terry, R-Neb., said in a conference keynote Tuesday for the Western Telecommunications Alliance and the Organization for the Promotion and Advancement of Small Telecommunications Companies. Terry said he told FCC Chairman Kevin Martin over the phone that “it doesn’t look like we're going to be able to do USF this year.” Terry asked Martin if that means “the FCC perceives that they need to step up,” he said: “He said ‘Yes.'”

VON conference organizer Pulvermedia is “closed for now,” a spokeswoman for the company confirmed Monday, declining to elaborate. The comment is all Pulvermedia has said since layoff rumors spread in late March.

Competitive local exchange carriers submitted another study on Qwest forbearance to the FCC Thursday, urging the commission to deny the Bell’s petition. Qwest seeks relief from loop and transport unbundling rules, tariffing and other regulations in Denver, Seattle, Minneapolis and Phoenix. In the past two months, CLECs have submitted several studies opposing Qwest forbearance. Thursday, Qwest fought back with a 14-page letter to the FCC refuting the recent batch of CLEC studies. The CLECs “recommend several unwarranted changes in the Commission’s forbearance analysis,” Qwest said. The TDS Metrocom-commissioned study released Thursday accuses Qwest of “padding competitive market assessments” with its own resale and commercial offer lines. Those lines are “meaningless in any retail market analysis because they impose no price constraints on the incumbent and provide no meaningful commercial opportunity for competitors,” the CLECs said. The resale market peaked in 2000, serving less than 3 percent of the market, the CLECs said. Commercial offers, Bell-priced wholesale products, “have shown rapidly decaying volumes” since launching in late 2004, they said. Resale is competitively irrelevant because the reseller can’t differentiate a resold product, independently reduce prices or sell access services, they said. “Qwest has attempted to puff up its numbers in a variety of ways,” said Heather Gold, XO Communications external affairs senior vice president. “First they fobbed off ‘wireless substitution’ as competition to wireline service, which is completely erroneous. Now Qwest is adding in its own resale service, which is irrelevant. The only test of market share that matters is the proof of successful, facilities-based competition.”

AT&T saw nothing but industry support on its appeal of a Universal Service Administrative Co. audit. AT&T disputes a USAC order that eligible telecommunications carriers must report partial or pro-rata dollars for USF Lifeline subscribers who left the Lifeline program within the month they joined. AT&T said it doesn’t need to provide the information because it has never asked USAC for partial or pro-rata support. In comments filed Wednesday, USTelecom, Qwest, the Independent Telephone and Telecommunications Alliance, Embarq and Sprint Nextel supported the appeal. No one opposed it.

Competitive carriers and their investors arrayed in droves against a Verizon forbearance petition seeking relief from loop and transport unbundling requirements in parts of Virginia Beach, where Cox is the incumbent cable operator. Comments on the request were due Tuesday. Sprint Nextel, a longtime special access reform advocate, also joined the fray. The opposition wasn’t unexpected: CLECs and Sprint also are fighting a Verizon forbearance petition seeking similar relief in Rhode Island.

Sprint Nextel submitted a plan at the FCC offering its version of Universal Service Fund reform. The “Comprehensive Universal Service Reform (For Everyone)” plan aims to reduce high-cost support, carrier contributions and consumer bills while treating “all industry segments equitably,” Sprint said Wednesday. It’s also “the only plan that can be implemented immediately,” said Sprint Nextel General Counsel Len Kennedy. Adopting the plan would cut annual carrier contributions $3.1 billion annually, Sprint said, estimating that carriers now contribute $4.6 billion yearly. The plan would drop the contribution rate to 6 percent from 11.3 percent, Sprint said. High-cost support for competitive eligible telecom carriers would drop 85 percent, Sprint said. Small rural incumbent local exchange carriers’ share of high-cost support would rise to 81 percent from 41 percent, Sprint said. The plan would let incumbents replace “much of the high-cost support with new service revenue obtained by increasing in modest increments the federal cap on subscriber line charges,” Sprint said. The Sprint plan “works largely within current FCC rules and can be easily administered,” the company said in a letter to the FCC. The plan has three components, it said. The first would raise SLC caps for all ILECs and reduce their high-cost support by the same sum. The second would recalculate required contributions to the High-Cost Loop Support and Local Switching Support funds by “consolidating study areas of holding companies with more than one million ILEC lines initially at the state level and later statewide.” The final component “caps or ends all high-cost support in a study area depending upon the level of CETC penetration.” Alltel lauded the Sprint plan. “Sprint’s recognition for the continuing need for technological-neutrality in universal service is noteworthy,” a spokesman said. “We look forward to working with Sprint on how best to achieve fair and equitable long term universal service reform.” Other carriers and telecom groups we contacted didn’t comment by our deadline.

Arguments against a Verizon petition seeking forbearance in Rhode Island urge the FCC to “impose more demanding criteria than it has used in the past,” Verizon said in reply comments. The carrier seeks relief from loop and transport unbundling requirements. “The commenters do not seriously dispute that Verizon meets the [FCC’s] coverage threshold and share-of-residential-lines tests,” Verizon said. The FCC has studied wireless and cable competition in forbearance petitions before and may do so again, Verizon said. Also, measuring Rhode Island competition on a rate center basis is more appropriate than doing it by wire center or metropolitan statistical area, Verizon said. “Rate centers equally reflect the areas in which competing carriers and Verizon provide local telephone service, and Cox and other cable operators internally track their coverage by rate center.” Verizon got no support in initial comments, said a filing by Covad, NuVox and XO Communications. “The comments were unanimous that Verizon has not met the statutory requirements for forbearance and that a grant of forbearance would result in significant negative impacts on consumers throughout Rhode Island.” The FCC should deny the petition because Verizon hasn’t provided sufficient data to show facilities-based competition in the mass or enterprise market, they said. “Instead, it relies on high-level or imprecise data obtained from websites.” Also, Verizon hasn’t given any competition data on the wholesale market, they said.

There’s room for two prepaid carriers in Las Vegas, Leap Wireless CEO Doug Hutcheson said Tuesday at a Morgan Stanley conference in Washington, D.C. Leap rival MetroPCS already has footing in the market, but Leap’s entry should enlarge the pie, not split it, Hutcheson said. Meanwhile, the economic slowdown has created a consumer “flight to value” that has benefitted Leap this year, Hutcheson said. The carrier struggled against economic “headwind” in the second half of last year, but has been doing better since Black Friday, he said. Leap released upbeat Q1 results last week (CD May 12 p6). Asked about a potential merger with MetroPCS, Hutcheson stuck to the script. A combination makes sense, but it’s not a discussion that will happen in public, he said.