FCC Wants to Review Verizon’s Fire Island Petition More Closely, Could Be Proxy for IP Transition Fight, Sources Say

"The Commission typically authorizes proposed discontinuances of service on a streamlined basis when there are no concerns that customers or other end users would be unable to receive service or a reasonable substitute from another carrier, or that the public convenience and necessity would be otherwise adversely affected,” the bureau wrote in a public notice released Wednesday night (http://bit.ly/1bAJU4I). “Where there are concerns in the record as to whether a service has reasonable substitutes or whether the present or future public convenience and necessity will be adversely affected, the Commission may take a petition off the automatic grant if necessary to allow further review of the discontinuance application, consistent with its statutory obligations."

The bureau emphasized that its removal of Verizon’s applications from the automatic grant process “should not be construed as a final determination on the merits of Verizon’s requests for authority to discontinue services.” Several parties “raised concerns about Verizon’s proposed discontinuances and, in particular, opposed an automatic grant of the proposed discontinuances,” said the bureau.

"The Fire Island scenario is an important test case for the commission, and the latest [developments] might be a way to buy some time for the commission while also rounding out the record to make a decision regarding how to handle those types of technological and market transitions in the future,” said former FCC Commissioner Robert McDowell, now a visiting fellow at the Hudson Institute. “While Fire Island itself is not very big, the issues coming out of it are potentially revolutionary for the communications marketplace.”

"In light of the opposition to the applications that have been filed, the Commission’s decision to request additional information from Verizon is not shocking and merely indicates the Commission’s commitment to a thorough review,” said Genny Morelli, president of the Independent Telephone and Telecommunications Alliance, which supported Verizon’s request. “Once that review is completed, we believe the applications will be granted.”

"The FCC takes applications off of streamlining when it has an issue it needs more time to pursue,” said John Nakahata, a Wiltshire Grannis telecom lawyer and former FCC official. “Sometimes those are small, other times big. From the questions asked, it seems clear that the FCC wants to know more about the service-affecting implications of shifting from wireline to wireless provisioning on Fire Island."

In a letter Wednesday, Wireline Competition Bureau Chief Julie Veach asked Verizon for more information, including the instance of cell site outages in the affected areas since May 2011, the reliability of 911 calls using Voice Link and what quality of service Voice Link provides compared with copper. “How has Verizon defined the minimum acceptable service for Voice Link in terms of engineering parameters, including: minimum channel rate, packet loss rate, dial tone availability or other applicable parameters? Please also describe Verizon’s minimum performance objectives for Voice Link, such as time to repair, and what Service Level Agreements (SLAs), if any, are available to Voice Link customers,” the bureau asked (http://bit.ly/1bAK9wF).

"If I were at the FCC, I'd just say, ‘Verizon, you have to file something, and then we'll grant it subject to your providing all of the data we ask for, in terms of treating it as a test,'” said former FCC Chief of Staff Blair Levin, now at the Aspen Institute.

"On the one hand, because this case is among the first of its kind (and therefore has significant precedential value), having the FCC take Verizon’s petition out of automatic approval -- particularly when there is significant opposition -- is legally prudent and standard operating procedure,” said Phoenix Center President Lawrence Spiwak by email. “On the other hand, because this case is among the first of its kind (and therefore has significant precedential value), having a forthright discussion about how we should amend and modify the traditional ’social contract’ in the face of radically different market conditions from 1934 is also entirely appropriate.” The big question, Spiwak said, is “whether the FCC asks the right questions in that discussion and ultimately makes the right call."

"It’s possible the FCC information request is serving dual objectives,” said Jeff Silva, analyst at Medley Global Advisors. “One obviously relates to the agency’s consideration of Verizon’s application to discontinue landline service on Fire Island. The information request will undoubtedly extend the regulatory review process, but not necessary presage rejection of Verizon’s request down the line. Another possible objective is to secure information/data for the public record to inform future deliberations in the broader policy matter of IP transition. One should always take note when the FCC puts significant time and thought into an information request. Indeed, the questions sometimes can be more telling than the answers received."

A former eighth-floor FCC official said the tendency at this point is to move issues such as Fire Island down the road, waiting for Wheeler to get on board as chairman. “God decided to grant [Verizon] a 214 and did the physical work of shutting down the copper network,” the official said. “This isn’t a case where someone is asking for permission to shut something down. It’s shutdown. Now the question is what do you do with it. Unfortunately, it has become a proxy for what will be a very important fight, which is how do we address similar circumstances where it is non-economic to continue to invest in the TDM network. This is what the whole IP transition is about.”

"We filed comments in the FCC docket asking the commission to hold off on its order until we had a chance to reach our decision in our ongoing investigation for the intrastate portion of that service, so we're pleased that the FCC did what it did,” said New York PSC Commissioner Gregg Sayre. New York Attorney General Eric Schneiderman applauds “the FCC for taking a closer look at Verizon’s activities on Fire Island to ensure consumers are fully protected,” said a spokeswoman.

"It’s important to have a double layer of protection where the state close to the community is reviewing and the FCC acts as an important backstop,” said Public Knowledge Senior Vice President Harold Feld. “We're pleased the FCC is going to take a longer view of the situation and give us the opportunity to follow our process,” he said. “This is not going to happen in the next month, but it makes it more likely that someone in the chain will set minimum standards for things like voice quality, call quality and how to deal with services that these consumers are relying on.”

To the AARP, the FCC’s decision to not automatically grant the request is important to the elderly. “AARP is fighting to preserve affordable and reliable phone service for the elderly and other citizens who rely on landlady service for emergency purposes and to stay connected to their family, friends and communities,” said Cristina Martin Firvida, AARP director of financial security and consumer affairs. The FCC needs to take steps to require Verizon to maintain its existing wireline facilities, Firvida said. “If Verizon allows wireline to deteriorate as an end run, it would force consumers to migrate to less reliable technology than their previously available service.”