Prospects remain strong for the Senate to act on an extension of the Internet Tax Freedom Act following House passage Tuesday of the Permanent ITFA (HR-235). Supporters of that bill told us that it’s unlikely that extension will come in the form of the stand-alone Internet Tax Freedom Forever Act (S-431), the Senate’s HR-235 equivalent. HR-235 and S-431 would make ITFA’s ban on state and local Internet access taxes and certain state taxes on e-commerce permanent (see 1501090042). The House passed HR-235 by voice vote Tuesday, just as it did in 2014 before Senate consideration of the bill was derailed by debate over the Marketplace Fairness Act. Congress passed a temporary extension of ITFA during last year’s lame-duck session (see 1412170034, 1412030052 and 1407210077).

Industry stakeholders universally praised the FCC Communications Security, Reliability and Interoperability Council (CSRIC) report on communications sector cybersecurity risk management for recommending voluntary processes and assurances, with Motorola Solutions saying in comments posted Monday that those recommendations “strike an appropriate balance” between assuring cybersecurity protection and reflecting the interests of all stakeholders. The CSRIC report, adopted in March, was meant to adapt the National Institute of Standards and Technology’s Cybersecurity Framework for communications sector use (see 1503180056). Industry groups CTIA and TIA similarly praised the CSRIC report for providing important guidance to the sector (see 1505290042). A separate Department of Commerce Internet Policy Task Force (IPTF) proceeding (see 1504090049 and 1503160059) on possible cybersecurity topics the IPTF should address through multistakeholder work drew multiple filings urging the IPTF to factor the NIST framework into its process.

FCC Chairman Tom Wheeler voiced concern that rural telco groups haven't reached agreement on an industry plan for overhauling rate-of-return USF mechanisms. Though he was hopeful rural representatives could still address their differences, industry talks “cannot drag on,” Wheeler said in a letter that circulated Monday responding to a previous letter from Senate Commerce Committee Chairman John Thune, R-S.D., who had urged the FCC to “reform” USF mechanisms to support rural broadband deployment. Telco parties negotiating a possible industry plan face a Wednesday FCC deadline for reaching agreement.

Telco and cable petitioners filed their final brief Thursday in support of their motion to stay two key parts of the FCC net neutrality order, which they called "a seismic departure from the status quo that has prevailed for more than two decades." The American Cable Association, AT&T, CenturyLink, CTIA, NCTA, USTelecom and the Wireless Internet Service Providers Association filed their response to the stay opposition of the FCC, Department of Justice and others (see 1505220037) a day before the filing deadline imposed by the U.S. Court of Appeals for the D.C. Circuit. The petitioners said FCC reclassification of broadband Internet access as Title II common carriage under the Communications Act would expose their industry members "to a host of new, ill-defined requirements, and it immediately threatens them with class-action litigation and enforcement actions." They said the reclassification is likely to be set aside as contrary to the Communications Act and promulgated in violation of the Administrative Procedure Act, citing a host of reasons. "This is thus a paradigmatic case for granting a stay pending appeal," the groups said. "The Internet economy has thrived without Title II mandates, to the immense benefit of the public." Petitioners knocked FCC arguments invoking Supreme Court Justice Oliver Wendell Holmes to claim that case-by-case adjudication can't cause harm. "Petitioners object not to case-by-case adjudication itself, but to a massive regulatory sea change, accompanied by potential class-action litigation and multi-million dollar forfeitures, without any intelligible guidance as to what 'rates' and 'practices' are 'just' and 'reasonable' in the broadband context, and what conduct the newly concocted Internet conduct standard proscribes. Justice Holmes never sanctioned such a regime," they said. Thousands of providers face "immediate and irreparable harm," with the situation "most dire for the hundreds of small broadband providers," they said. The petitioners haven't asked that the four FCC net neutrality rules -- no Internet blocking, throttling or paid prioritization, along with transparency duties -- be stayed. Absent a stay, the commission order takes effect on June 12. The petitioners said at a minimum the court should grant expedited review, which the agency and its intervenors support.

The FCC will offer clarity in a declaratory ruling on the Telephone Consumer Protection Act and how TCPA is to be applied. The ruling is to be circulated for a vote at the agency’s June 18 meeting, commission officials said Wednesday. Some have been seeking clarity on TCPA enforcement (see 1505210034). Meanwhile, it remains unclear whether the FCC will also take up Lifeline reform at the meeting. Industry lawyers said a proposal on the USF program still seems likely. More will be known Thursday, the due date for Chairman Tom Wheeler to circulate items for the June open meeting.

USTelecom asked the U.S. Court of Appeals for the D.C. Circuit to intervene in defense of the FCC against Full Service Network's petition for review challenging the agency's net neutrality order. "Unlike all of the other petitioners that have filed petitions to date, these Petitioners intend to argue that the FCC should have imposed even more regulation on providers of broadband Internet access service, including USTelecom’s member companies," USTelecom said in its motion Tuesday. USTelecom has filed a petition for review (and sought a stay) of the FCC order on the grounds that the commission allegedly overstepped its authority in seeking too much regulatory oversight, among other things.

Rural telcos reported progress but asked the FCC Wednesday for a couple more weeks to try to develop consensus proposals for reforming universal service funding for rate-of-return (RoR) carriers, said an ex-parte filing by WTA -- Advocates for Rural Broadband. Under prodding from the FCC to develop common proposals, representatives of WTA, the Independent Telephone & Telecommunications Alliance, the National Exchange Carrier Association, NTCA, USTelecom and others updated commission officials on the status of their efforts since April 16. That's when FCC officials asked the telco associations to develop a broad industry plan within a month, but it became clear recently that they hadn't reached a consensus (see 1505150046). In their filing, the groups said they had reached agreement on a number of issues but others remained unresolved for a variety of reasons, "including disagreements between certain representatives and insufficient time to work out the details of certain proposals and options." The groups asked for a two-week extension, until June 3, "to continue to negotiate a comprehensive plan for future RoR high-cost support," the filing said. FCC officials seemed receptive to the industry efforts, one telco official said. "Things are fluid. Hopefully we'll get a little more time to submit a framework," the official said. "We're trying to make sure the plan is all-encompassing," addressing proposals for carriers wanting to move to model-based support and rural group "data connection service" (DCS) proposals for carriers wanting revisions to the current mechanisms to facilitate stand-alone broadband support. The FCC has asked the groups to modify their DNS proposals by including some additional constraints, the telco official said. "So we're trying to make that happen."

Alamo Broadband and USTelecom asked the U.S. Court of Appeals for the D.C. Circuit not to dismiss their initial challenges to the FCC net neutrality order. In a joint opposition to the agency's motion to dismiss their filings, Alamo and USTelecom said the FCC had conceded they have since filed timely supplemental petitions for review of the order following its Federal Register publication. "The Court need not decide the motion to dismiss now and can -- and should -- refer the motion to the merits panel, which may address it if necessary to resolve this case," said the company and the association. "In any event, contrary to the FCC’s claims, neither its regulations nor this Court’s precedents clearly resolve the question of when a party may petition for review of a declaratory ruling that is included in an FCC document that also promulgates new regulations."

The White House wants FCC Commissioner Jessica Rosenworcel to have another term as FCC commissioner. But Rosenworcel, a Democrat, may not have an entirely speedy or easy confirmation from the GOP-controlled Senate, though some observers believe derailing her reconfirmation could backfire on Senate Republicans if attempted. Her term expires June 30, and she will be empowered as a commissioner through the end of next year if there is no Senate action.

The FCC Wireline Bureau is seeking comment on Granite Telecommunications' request for FCC clarification of Bell Operating Company (BOC) Section 271 duties to combine unbundled network elements at wholesale discounts and commingle them with other services. Comments/petitions are due June 15 and replies/oppositions are due June 30, said a bureau public notice in docket 15-114. In a May 4 petition for a declaratory ruling, Granite, a CLEC with business customers, asked the FCC to remove uncertainty about BOC duties "(1) not to separate unbundled network elements ('UNEs') provisioned pursuant to Section 271(c)(2)(B)(iv)-(vi) of the [Communications] Act; (2) to combine such UNEs; and (3) to commingle such UNEs with other wholesale services." Granite said a court-driven FCC rollback in ILEC unbundling duties under Section 251, the absence of FCC rules on BOC Section 271 UNE duties, and a recent USTelecom filing -- asserting the BOCs don't have to combine Section 271 UNEs -- "have created uncertainty as to the BOCs' obligations regarding the separation, combination, and commingling of Section 271 UNEs." Citing a Section 202(a) prohibition against unreasonable discrimination and a Section 201(b) prohibition against unjust and unreasonable practices, Granite asked the FCC (1) to prevent BOCs from separating already-combined UNEs unless requested by a CLEC or unless the BOCs have a reasonable basis for doing so; (2) to require BOCs to combine Section 271 UNEs at the request of CLECs unless the BOCs have a reasonable basis for refusing to do so; and (3) to require BOCs to commingle, or allow CLECs to commingle, Section 271 UNEs with wholesale services obtained from ILECs unless the BOCs have a reasonable basis for refusing to do so. Granite said the BOC Section 271 obligations to provide competitors with unbundled access to local loops, transport, and switching are ongoing and independent of ILEC Section 251 unbundling duties. "[I]n the absence of Section 251 unbundling obligations for local switching and shared transport, the Section 271 competitive checklist provides the only regulatory compulsion for BOCs to provide these network elements on an unbundled basis today," Granite said.