AT&T voiced continued qualms about how rate-of-return telcos could opt into incentive-based business data service price-cap regulation. But incumbent and rural telco groups cited no opposition to a core FCC proposal for the option, seeking to reject AT&T and Sprint proposals. Replies posted Monday and Tuesday in docket 17-144 crystallized battle lines over an "all-or-nothing" rule, a competitive market test, and a targeted rate of return under price caps.

USTelecom proposed updated methodology for distributing USF voice subsidies in high-cost and extremely high-cost areas not otherwise supported by Connect America Fund Phase II. The group proposed distributing $105 million in annual high-cost USF funding as the starting budget for the voice support -- equal to $95 million in frozen support currently given to price-cap ILECs and $10 million to account for Alaska Communications support. There would be another $35 million in transition support the first year that would be phased out by year three. USTelecom said it and incumbent telco members previously submitted proposals for how the FCC should support price-cap ILEC voice services for unsubsidized locations not given voice-related USF forbearance relief from eligible telecom carrier (ETC) voice duties in states where they accepted model-based CAF II support offers. This plan "encapsulates those areas but also expands to encompass other high cost areas that will remain unsupported after the CAF II Auction" (scheduled to start July 24), said a filing posted Monday in docket 10-90. "This expansion required a fresh look towards a simple and readily implementable interim proposal." Otherwise, it said, price-cap ILECs will have an "unfunded ETC obligation" where not replaced as ETC.

Incompas and IdeaTek Telecom urged the FCC to dismiss a USTelecom petition for forbearance relief from unbundling discounts and other wholesale regulations, but Windstream and CenturyLink Link backed the petition. IdeaTek CEO Daniel Friesen told FCC Chairman Ajit Pai, a Kansas native, that his company focuses on deploying fiber to the home and small businesses in underserved areas of rural Kansas, with plans to invest "even more significantly" in coming years, said an Incompas filing posted Monday in docket 18-141. "Continued access to unbundled network elements [UNEs] is crucial to his ability to continue to provide, and expand, these vital services in unserved and underserved areas," it said. Friesen "focused on his use of the unbundled dark fiber interoffice transport." Incompas and IdeaTek said other fiber builders need UNE access. Windstream, which jointly proposed a three-year transition for eliminating such duties (see 1806260028), met with Pai and Commissioners Mike O'Rielly and Brendan Carr, said postings Friday (here, here, here): "The proposal represented a reasonable compromise between parties with competing interests and that the transition period specified therein reflected the minimum amount of time necessary." CenturyLink discussed UNE details with Wireline Bureau staffers in response to their questions about the data the company provided to USTelecom in support of its petition, said a posting Monday: "CenturyLink has not discontinued the provision of DSL in any market where it has been made available, and we are not aware of any case in which a carrier customer is utilizing UNEs purchased from CenturyLink to provide DSL in areas where CenturyLink itself does not provide DSL."

The communications law impact of Supreme Court Justice Anthony Kennedy's retirement remains largely a mystery (see 1806270070) as the Senate gears up for a confirmation battle. Not only is there a guessing game over who President Donald Trump will nominate as a replacement, but Kennedy's views aren't easy to pigeonhole, attorneys told us. He's "been all over the map," emailed TechFreedom President Berin Szoka.

Windstream backing USTelecom's proposal to put off ILEC wholesale pricing relief from "unbundled network element" discounts until 2021 is helpful at the FCC, and a delay would bolster the ILEC case in expected litigation, said attorney Jeff Carlisle, Wireline Bureau chief 2004-05 who oversaw a triennial review remand order that eased UNE duties and isn't involved in the current proceeding. Though Carlisle agreed with those who said Windstream's endorsement creates added political cover for the FCC to approve a USTelecom forbearance petition (see 1806260028), he said that's less important than the strengthened legal argument the possible delay creates for UNE relief meeting a three-prong test. "Political cover is great for getting the FCC vote USTelecom wants, but that vote will put the last nail in the coffin of the infrastructure access provisions of the 1996 [Telecom] Act and will be appealed immediately," he emailed. "Surviving that appeal depends on USTelecom providing a majority of the Commissioners with a convincing case about a somewhat counterintuitive proposition -- that allowing incumbents to stop selling network elements at deep discounts actually promotes competitive market conditions and is thus in the public interest. Providing a 'gentle' landing for CLECs and a more gradual transition to market alternatives helps that case."

Rural telcos pressed the FCC to hike their USF subsidies, encountering less opposition in replies this week than in initial comments on an NPRM in docket 10-90 (see 1805290060 and 1803230025). RLECs said there's broad support for increasing rate-of-return (RoR) high-cost funding beyond a budget set in 2011 and modesty increased above $2 billion. WTA backed "fully funding" the "outdated" budget to meet broadband demand, first to $2.43 billion this year and gradually to $2.975 billion in 2026. It said RoR USF should be a single budget. NTCA cited "consensus" the agency should "right-size" the budget to account for past and future inflation. A group of Nebraska carriers receiving support based on an Alternative Connect America Cost Model (A-CAM) said increasing their monthly funding from $146 per location to $200 would be a "reasonable balance." The Pennsylvania Public Utility Commission backed hiking A-CAM support to $200/location and increasing the overall budget to account for inflation, including for carriers receiving legacy support. GVNW Consulting on behalf of Illinois RLECs (here) and Granite State Telephone (here) urged keeping a "100 percent overlap" requirement for challenging support based on unsubsidized competition, while GeoLinks, a wireless ISP, urged changes. The Broadband Alliance of the Midwest and the Eastern Rural Telecom Association were among the other RLEC parties replying. The National Tribal Telecommunications Association called for easing a rural-growth cap generally and budget controls for tribal carriers, and Gila River Telecommunications pushed a tribal broadband factor. The Wireless ISP Association said it and NCTA had sought rural USF changes, including moving toward auctions for distributing subsidies. "Arrayed against this reasonable, market-based approach are a handful of [RLECs and allies], all with a vested interest in maintaining the status quo," WISPA said. "Broad aspersions are cast on the ability of competing providers to offer new service to unserved areas without any supporting data other than the skewed information produced by the failed challenge process." USTelecom opposed the auction proposals.

Opponents of USTelecom's FCC petition for ILEC wholesale pricing relief have a tough task, particularly in urban areas, more so after the group agreed with previous critic Windstream to propose a delay in eliminating "unbundled network element" discounts until 2021, some told us. Incompas, which represents CLECs using UNEs, said the forbearance petition would cripple the competitors and discourage fiber deployment, including of incumbent telcos. It said the agency should restart a procedural clock and extend comment deadlines. USTelecom said the clock doesn't need to be reset and stood by its analysis that UNE relief would provide consumer and economic benefits.

USTelecom companies, in a deal with member Windstream, changed a proposal so that it would now increase by almost twice the amount of time telcos wouldn't be able to raise prices for unbundled network element connections that competitors can use to reach their own customers. Other telecom companies using such UNEs weren't swayed by the association's changed FCC forbearance proposal posted Friday in docket 18-141, after the past version drew a letter of protest earlier last week to leaders of the Senate Commerce Committee from companies including Windstream. With the changes, Windstream is now on board. Incompas remains concerned, its chief told us.

Rural telcos opposed FCC elimination of the two remaining rural call completion duties of providers covered by a 2013 RCC order, a proposal that received much industry support in initial comments (see 1806050043). The data recording and retention rules helped reduce the number of "dropped and otherwise deliberately non-completed calls," replied WTA this week in docket 13-39. "Sunsetting the rules without a suitable alternative monitoring and enforcement mechanism in place will only undercut the previous progress." NTCA (here), the South Dakota Telecommunications Association (here) and Alarm Industry Communications Committee (here) also filed opposition. NTCA urged the FCC to broadly define "intermediate providers" whose RCC performance would be subject to covered provider monitoring and oversight under an April order. NCTA also opposed and ITTA backed a recent USTelecom request that the FCC stay the monitoring rule (see 1806130086). USTelecom (here), Verizon (here) and ATIS (here) backed eliminating the two rules. Verizon and ATIS opposed mandating industry best practices, with Verizon urging flexible intermediate-provider service-quality standards and full implementation of the Improving Rural Call Quality and Reliability Act and all RCC rules before compliance deadlines. USTelecom sought a broad intermediate-provider definition. NCTA said covered providers should have to only "monitor the performance and registration status of intermediate providers with which they have a contractual relationship." The American Cable Association said a covered-provider definition should be retained, particularly a 100,000-subscriber line threshold. Incompas urged a "flexible" approach to implementing the new law and consideration of "the role that access arbitrage" plays. West Telecom Services said the FCC shouldn't "micromanage" intermediate-provider duties and proposed eliminating a safe harbor's "two-hop cap on use of intermediate providers" by covered providers. HD Tandem backed "transparency mechanisms" to allow regulators "to root out illegal cost shifting or other routing behaviors that impair high-quality call completion." Inteliquent endorsed mandating best-practice compliance.

Most net neutrality litigants agreed to a proposed briefing format and schedule running from August through November, said a motion (in Pacer) Wednesday of petitioners and intervenors challenging the FCC broadband reclassification order. Sixteen groups of petitioners and seven supporting intervenors made the proposal, with word limits, to the U.S. Court of Appeals for the D.C. Circuit in Mozilla v. FCC, No. 18-1051. They said respondents FCC and DOJ consented, but intervenors supporting the FCC plus intervenor Digital Justice Foundation (DJF), which supports neither side, didn't. "The proposed format accommodates the divergent interests of the various parties to this complex appeal," said the motion. "It ensures consolidation among parties wherever the differences in position are possible to bridge." Petitioner briefs would be due Aug. 20; their supporting intervenor and DJF briefs Aug. 27; the FCC/DOJ brief Oct. 11; FCC-supporting intervenor briefs Oct.18; and petitioner and supporting intervenor briefs Nov. 16. The motion noted respondents didn't agree with its "characterization or description of the issues presented by or the procedural history of the case." It also included a statement from ISP intervenors that support the FCC -- the American Cable Association, CTIA, NCTA, USTelecom and Wireless ISP Association -- asking for "sufficient words to respond to all the arguments" of petitioners, akin to what the court provided intervenors in litigation over the FCC 2015 net neutrality order and consistent with an updated rule. The DJF asked (in Pacer) to be allowed to file a reply brief: "No other party (1) supports net neutrality as a policy goal, (2) believes that the 2015 net-neutrality rules had certain statutory defects nonetheless, (3) believes the ... Order's repeal of the conduct rules and reclassification is within [FCC] discretion ..., but (4) believes that the Order's transparency and preemption provisions are unlawful, at least in part."