Consolidated Communications executives acknowledged reputational issues with the FairPoint name as a public-relations risk for its proposed acquisition. At a Maine Public Utilities Commission technical conference live-streamed Tuesday, consumer advocates and unions pressed the executives on FairPoint's history and service quality issues raised in an ongoing PUC probe about missed service quality benchmarks from Q3 2014 to Q2 2016 (see 1701030041). FairPoint turned its business around after initial problems, but “there is a certain amount of reputational issues associated with the name,” said Consolidated Chief Financial Officer Steve Childers. When Consolidated sought financing for the deal, one of the acquirer's lead banks “pulled out at the last minute on us when we were putting the commitment papers together simply because they lost quite a bit of money on the Verizon/FairPoint thing,” he said. FairPoint went bankrupt after buying Verizon Northeast wireline systems. Consolidated Vice President-Regulatory and Public Policy Michael Schultz cited public-relations risk from FairPoint/Verizon integration problems and the bankruptcy that followed. “Even though that was several years ago, there’s still a memory here” FairPoint improved, but some could bring a “here-we-go-again mentality” to the Consolidated deal, he said. Consolidated aims to meet or exceed Maine’s service quality standards, Schultz said. The company plans to apply customer-service best practices from its footprint, including a self-service support tool that reduces the number of trouble reports the company receives, he said. Consolidated Vice President-Operations Gabe Waggoner said the telco also intends to deploy in Maine a GPS tool that optimizes service technicians’ routes to keep them on schedule, and a “virtual hold” feature that lets customers calling into support hang up while keeping their place in the queue. Separately, telecom analysts told us they expect strong state scrutiny of the deal but that FairPoint’s history could end up helping Consolidated secure OKs. “FairPoint has history of service quality issues,” said Technology Business Research analyst Chris Antlitz. “A lot of the issues stem from underinvestment in back office systems and the network. Consolidated can and is likely to use this factor to its advantage to seal the deal because they can promise to clear up some of those issues and boost investment if allowed to merge.” FairPoint’s weak finances kept the company from fixing service issues, but the companies combined could resolve them, he said. Cowen analyst Paul Gallant agreed “having new management of the Maine system probably is a plus in the PUC’s eyes.” The analyst said he'd be “surprised if the Maine PUC isn’t extremely focused on the merger’s impact on service quality.” The Verizon/FairPoint transition “was a game changer in how states review rural telco takeovers," Gallant said. "That was not a good experience for Maine and I expect regulators will take no chances of it happening again.”

A broad group of financial services associations asked the FCC to extend the comment deadlines on a petition by Craig Moskowitz and Craig Cunningham, which the groups say would rewrite the rules they face under the Telephone Consumer Protection Act (TCPA). In a Feb. 8 public notice, the FCC sought comment on the petition for a rulemaking “to overturn the Commission’s improper interpretation that ‘prior express consent’ includes implied consent resulting from a party’s providing a telephone number to the caller.” The FCC sought comment by March 10, replies by March 27. “Such a dramatic change would prevent consumers from receiving important communications from our members on their mobile phones, communications that provide critical information that consumers want and need to receive,” the associations said in docket 02-278. “It would also likely require our members to make fundamental changes to their practices for obtaining consent in conformity with the TCPA’s requirements. Each day, our members make calls to millions of our customers who would be impacted in a very negative way by the change proposed in the Petition. We believe that consideration of a proposed change of this magnitude should be done through a process that affords a greater opportunity for public participation.” The deadlines are simply too tight to allow for thoughtful comment, the groups said. The American Bankers Association, ACA International, American Association of Healthcare Administrative Management, American Financial Services Association, Consumer Bankers Association, Credit Union National Association, Financial Services Roundtable, Independent Community Bankers of America, National Association of Federally-Insured Credit Unions, National Council of Higher Education Resources and Student Loan Servicing Alliance signed the filing.

Net neutrality advocates are peddling misconceptions in defending the FCC 2015 order, said American Enterprise Institute visiting scholar Daniel Lyons, referring to a recent news conference by lawmakers and a public-interest advocate (see 1702070042). He said in a Friday blog post that repealing the reclassification of broadband under Communications Act Title II "is not the same as eliminating the open internet." He noted FCC Chairman Ajit Pai opposed Title II use but supported a "free and open internet." Lyons said the debate should focus on protecting "consumers, not edge providers" and on promoting "competition throughout the internet ecosystem," rather than "singling out ISPs." The law is outdated, he said, urging a "holistic approach" to clarify FCC broadband authority and "give the agency clear marching orders, rather than forcing it to fit the square peg of the internet into the round statutory holes of law written to govern the telephone network." CCMI telecom consultant Andrew Regitsky also urged legislation, arguing Pai faces a difficult battle to change the order, which will leave the FCC "scarred" even if he wins. "As soon as the next Democratic president is elected, he or she can simply appoint FCC commissioners that could reverse all of Pai’s actions," wrote Regitsky in a blog post. "Congress must write new net neutrality rules and soon. And the remarkable thing is that both political parties are not that far apart. A compromise is eminently doable."

Free Press told the FCC it should ignore NCTA and USTelecom requests that the agency issue a broad stay of the effective date of the enhanced disclosure rules in the 2015 net neutrality and broadband reclassification order (see 1702060064). The regulator shouldn’t spare just smaller carriers, especially since the rules may be overturned by the FCC, the groups argued. The associations are just recycling old arguments, Free Press said in a filing in docket 14-28. “The NCTA/USTA Letter presents no sufficient justification for granting its last-minute request,” Free Press said. "But what it lacks in reason, it makes up for in audacity and hypocrisy. This letter is part of a years-long concerted effort by BIAS [broadband internet access service] providers to profess unyielding adherence to the principles of transparency, all while working to undermine effective and sensible transparency rules such as those adopted in the various Open Internet orders."

The FCC circulated a draft Connect America Fund order Feb. 13, according to the agency circulation list updated Friday. A March 30 Further NPRM on rate-of-return telco USF issues had asked whether operating expenditure limitations should be modified for carriers serving tribal lands, said a commission spokesman. "This order addresses that question."

A combination of Sprint and T-Mobile seems to stand a good chance of approval if proposed under the Trump administration, Raymond James said in a research note. Analysts said their comments were informed by meetings during the NARUC winter meetings in Washington, D.C. “Sprint/T-Mobile deal was often brought up, and success hinges on how the DoJ decides to view the market,” the firm said in a research note. “In recent years, the DoJ moved to a national market approach whereby they had analyzed deals focusing on the entire country, as opposed to its historical approach of individual market competition. If the DoJ were reverted to individual market analysis, we believe [the deal] has a stronger chance of approval.” The FCC won’t be able to abandon its statutory obligation to consider the “public good” in transaction reviews, “but it could refrain from adding on the involuntary concessions,” Raymond James said. The firm said the consensus from its meetings was that there's “100% bi-partisan support to include broadband” in any infrastructure bill. “The downside was that it could fund uneconomic projects that compete with incumbents rather than add to them,” the firm said. “The carriers are actively looking at how they can limit the inclusion to unserved areas only to avoid the BTOP (Broadband Technologies Opportunity Program) issues from 2009 with funds provided to overbuild incumbents.” Building out small cells will remain a challenge, Raymond James said. “The issue is that small cell infrastructure does not ride on the same infrastructure that telecom networks have historically been attached to, namely utility poles owned and regulated by power companies. These facilities have extensive state and federal regulation as to the pricing and application process.”

Latham & Watkins attorney Tad Lipsky, who was named to the FTC landing team last month by the Trump transition team, was appointed acting director for the agency's Competition Bureau, said FTC acting Chairman Maureen Ohlhausen in a news release Thursday. His appointment will be effective March 6 and he replaces Deborah Feinstein, who was appointed in 2013 by then-Chairwoman Edith Ramirez. Lipsky has 40 years of experience in antitrust law and began his career in DOJ's Antitrust Division, focusing on deregulation, competition and enforcement in the aviation, transportation and energy sectors, the agency said. He returned to the DOJ after a break from government service to be deputy assistant attorney general in President Ronald Reagan's administration. Ohlhausen also appointed Alan Devlin, who was her attorney adviser, as acting deputy director of the Competition Bureau, and Svetlana Gans, a former attorney adviser and litigation attorney within both the bureaus of Consumer Protection and Competition, as her chief of staff.

Five consumer and privacy groups are urging House and Senate Commerce Committee leaders to back the creation of a U.S. data protection agency, among suggestions on how the FTC can increase data protection and promote competition and innovation. "The United States is one of the few democracies in the world that does not have a federal data protection agency, even though the original proposal for such an institution emerged from the U.S. in the 1970s," wrote the Center for Digital Democracy, Consumer Federation of America, Consumer Watchdog, Electronic Privacy Information Center and U.S. Public Interest Research Group in the Wednesday letter. They said the FTC should support the creation of such an agency. The groups urged the agency to continue to uphold Privacy Shield, the trans-Atlantic data transfer framework, and Children’s Online Privacy Protection Act. The commission, the letter said, has approved too many deals -- including Google's acquisitions of DoubleClick (see 1612190037) and Nest, and Facebook's purchase of WhatsApp (see 1609220031) -- that the groups said failed to protect privacy. The FTC must use its antitrust power to block such deals that concentrate data and endanger privacy, they said. Not only should the FTC seek more legislative authority to protect privacy, it also should bring more actions over unfair trade practices, the groups said. "The unworkable 'notice and choice' approach fails to provide meaningful privacy protections, and simply produces vague privacy policies." Instead, the FTC's unfairness authority can provide "substantive" protections and reduce identity thefts, data breaches and financial fraud, the letter said. Other suggestions include enforcing existing consent orders, incorporating "important" public suggestions into proposed settlements, requiring baseline privacy standards in settlements and increasing transparency over the complaint process. The letter was addressed to House Commerce Chairman Greg Walden, R-Ore., and ranking member Frank Pallone, D-N.J., and Senate Commerce Chairman John Thune, R-S.D., and ranking member Bill Nelson, D-Fla.

Cable and telco groups continued to battle over FCC treatment of pole attachments under a proposed ILEC shift from traditional Part 32 regulatory accounting rules to generally accepted accounting principles (GAAP). The American Cable Association said if the commission ends use of Part 32 data to calculate pole-attachment rates, it should adopt an NCTA proposal to freeze price-cap carrier rates at current levels (see 1702090042). If the FCC adopts an ILEC 12-year transition proposal "in lieu of a rate freeze, at least it should provide that: incumbent carriers cannot increase rates for the first five years of the transition; incumbent carriers must maintain and produce part 32 data during this five year period so it can be compared to rates that would result from the use of [GAAP]; and, incumbent carriers should file with the Commission annually underlying data to show how they derive rates," said an ACA filing posted Thursday in docket 14-130. Telcos acknowledged the shift may cause pole-attachments rates, typically under $10 (per pole attachment per year), to rise "by several dollars, a substantial rate hike," which would be "especially felt" by ACA's members and hinder broadband deployment, the cable association said. The agency is considering streamlining its Part 32 rules at commissioners' Feb. 23 meeting (see 1702020051). A USTelecom filing posted Wednesday called the NCTA arguments "flawed" and Part 32 accounting "a relic of rate of return regulation" that "makes no sense for America's price cap carriers." It said ILECs understood the concerns of cable and others, and proposed "a reasonable transition mechanism" for calculating GAAP pole-attachment rates. The transition proposed by AT&T, CenturyLink and Verizon factored in depreciation, cost-of-removal and any other differences between methodologies, USTelecom said. Freezing rates based on one year's costs "cannot be a realistic alternative to a reasonable, long-term transition," the ILEC trade group said. The telco proposal "is not an effort to increase pole attachment rates; any suggestion otherwise is conflating an argument about problems with the formula used to define rates with a procedural accounting issue," it said. USTelecom said the carriers' confidential submissions back their claims that the transition's rate impact would vary -- rates would "in many cases, go down or not be significantly affected."

Comcast executives sat with FCC Chairman Ajit Pai to discuss his regulatory reform steps, focus on the digital divide and other issues, said an ex parte filing posted Thursday in docket 13-236. The operator said it also gave him its latest Internet Essentials broadband program subscriber numbers and urged Pai "to act expeditiously" in restoring the UHF discount. Such action is expected to occur soon (see 1701110067). Also at the meeting were Pai Chief of Staff Matthew Berry, Comcast Senior Executive Vice President David Cohen, NBCUniversal Senior Vice President-Government Relations Mitch Rose and Comcast Senior Vice President-Regulatory and State Legislative Affairs Kathryn Zachem. Pai, since assuming the chair, also met with Incompas (see 1702130023). The agency declined to comment now.