Bells, Rural Groups Oppose New Separations Rules for CALEA Costs
In the midst of reforming the separations process the FCC shouldn’t be taking “piecemeal” actions such as setting up a new account to handle CALEA costs, the Bells told the Commission in comments filed late Fri. The FCC asked for comments on separations treatment of CALEA costs on behalf of the Federal-State Joint Board on Jurisdictional Separations. Such costs can include such items as new software and switches. The separations process, which the Bells call outdated, decides which telephone company costs are regulated as interstate and which as intrastate. Interstate regulation generally is the FCC’s responsibility; intrastate rules are the purview of the state PUCs. The FCC instituted a 6-year freeze on the separations process in 2001 while the agency considered reforming it.
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The Joint Board should be concentrating on separations reform rather than this “narrowly focused inquiry,” SBC said. While CALEA is important, the separations issues associated with it “are minuscule when compared to the unresolved separations issues related to intra and inter-state telecommunications services,” SBC said. There’s no need for CALEA costs and reimbursements to be separated into CALEA-specific accounts, said BellSouth: “The existing ‘Part 32’ accounts are sufficient to record CALEA-related transactions as they occur… The costs and burdens of establishing new and separate CALEA-specific accounts or CALEA-specific separations rules may, for BellSouth, exceed certain compliance expenses associated with implementing CALEA itself.” Separations has become “increasingly less meaningful” as technology changes and competition grows, Verizon said: “Thus the Joint Board should add no new categories nor make any changes to the separations process for CALEA related costs… Creating a new category for separation purposes would undermine the goal of the freeze in instilling simplicity and stability [and] require Verizon and other carriers to conduct time consuming cost studies to measure usage of the service between jurisdictions.”
John Staurulakis Inc., a consulting firm serving rural LECs, said it has been treating CALEA compliance costs as “any other Central Office software upgrade” under current separations categories and doesn’t think rule changes are needed. Fred Williamson & Assoc., a consultant to rural LECs mainly in Kan. and Okla., said “changes to the existing separations rules for allocation of CALEA costs are unnecessary and inappropriate until the Joint Board addresses the current separations freeze.” Williamson said existing separations rules can provide “reasonable jurisdictional allocations of CALEA costs.”
Rural telephone companies said CALEA costs should be deemed interstate without separating out an intrastate portion because the few intercept requests they process are made by federal law enforcement agencies. The costs should be “directly assigned” to the interstate jurisdiction, said a joint filing by the National Telecom Co-op Assn. and OPASTCO: “The requirement that carriers be CALEA compliant comes from federal law and is driven in part by national security initiatives… Additionally, there is evidence that rural ILECs are receiving few CALEA-related requests from state and local law enforcement agencies. Direct assignment to the federal jurisdiction is also simple and efficient. There is no compelling reason to force rural carriers to go through the lengthy, burdensome and costly process of separating their costs between the intrastate and interstate jurisdictions.” Perry-Spencer Rural Telephone Cooperative (PSC) said it had to purchase a new switch because its current switch can’t be made CALEA compliant: “This is despite the fact that PSC’s current switch meets all of PSC’s customers’ needs and PSC has never received an intercept request. PSC shouldn’t be forced to undergo this significant expense without any ability to receive reimbursement.” SEI Communications, a small LEC that provides service in Dillsboro, Ind., said it spent about $20,000 so far to upgrade its facilities to comply with CALEA needs.