Rural Associations Seek Delay of Five-Year Service Quality Improvement Plan Deadline
Several rural organizations asked the FCC for “emergency” clarification of the requirement that rural rate-of-return regulated ILECs submit five-year service quality improvement plans (http://bit.ly/10mQK8F). NTCA, the Eastern Rural Telecom Association, the Independent Telephone & Telecommunications Alliance, the National Exchange Carrier Association, USTelecom and the Western Telecommunications Alliance all signed the petition, asking that the deadline for submission of the five-year plans be delayed a year, to July 1, 2014.
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The rate-of-return ILECs are likely to approach the reporting requirement with the care that they use when making filings at the Securities and Exchange Commission, the petition said. There, “any prudent” publicly traded company only provides “periodic, carefully crafted forecasts that have been vetted thoroughly by executive management, lawyers, accountants, and auditors through a time-consuming and expensive process,” the petition explained. “And, as the Commission is undoubtedly aware, publicly reporting companies are sure to include with each such report a litany of risk factors, caveats, and warnings to inform the reader that any projections provided therein, despite being carefully crafted, reviewed, and vetted at substantial expense and effort, should not and cannot be relied upon. It is almost certain that RLECs will feel obligated to take a similar tack with respect to Five-Year Plans -- thus incurring substantial expense and burden to prepare reports that contain necessary and justified disclaimers and caveats warning about risk factors."
The problem faced by the rate-of-return ILECs is one of predictability, they say. “We've got a system that is still very much in development,” said Michael Romano, NTCA senior vice president-policy. The much-maligned quantile regression caps, which change every year, “complicate” the process of developing a multi-year plan, Romano told us. And assuming the Office of Management and Budget gives its Paperwork Reduction Act approval, the five-year plans would be due in July. Such plans wouldn’t be very useful guidance to the FCC, Romano said: They would be “heavily caveated by all sorts of language” to take into account changing caps. “One wonders what their utility would be."
"There have just been a lot of questions” about how the capital and operating expenses will be combined to affect the high-cost loop support caps in 2012 and 2013, said David Cohen, vice president-policy for USTelecom. The FCC has “evidenced an openness to discuss the operation of the caps,” and there is a “possibility” that they could maintain the caps for a period of years, Cohen said. “There are many things about the caps that are under consideration and hopefully we will have greater clarity by next summer.” At that point, companies should be able to offer a “more coherent” set of plans for construction of their networks, he said.