Alaska Communications opposed General Communications Inc.'s push for FCC reconsideration of equal access and dialing parity relief it gave incumbent telcos in rural Alaska in a broader decision on a USTelecom forbearance petition (see 1601280031). “The FCC correctly abolished its outdated equal access and dialing parity rules, after recognizing that standalone long distance is out of step with modern consumer preferences," Alaska Communications, the state's largest ILEC, emailed us Friday. "Even in rural Alaska, today’s consumers often choose wireless or VOIP national calling plans over traditional local service with a separate pre-subscribed long distance carrier. The USTelecom petition was filed more than 15 months ago, and GCI chose not even to present its arguments to the Commission before the Commission ruled. GCI’s Petition for Reconsideration offers no new evidence, and we are confident that the FCC will uphold its grant of forbearance."
Telmate asked a court to stay FCC inmate calling service rules before they take effect, pending further review of its underlying challenge, according to a motion filed Friday. Global Tel*Link and Securus recently also sought stays in the U.S. Court of Appeals for the D.C. Circuit (Global Tel*Link v. FCC, No. 15-1460 and consolidated cases) (see 1601270029), while CenturyLink recently asked the FCC for a stay (see 1601280033). The commission previously denied GTL, Securus and Telmate stay requests (see 1601220040).
CenturyLink became the latest inmate calling service provider seeking a stay of the FCC’s rate caps on domestic ICS calls, pending judicial review on the merits of an underlying legal challenge. “A stay is warranted because the rate caps will prevent CenturyLink from recovering its reasonable cost of providing ICS to multiple facilities in several jurisdictions,” the company said in a petition to the commission in docket 12-375. The caps thus violate Communications Act requirements, including that ICS providers be “fairly compensated,” and will cause the CenturyLink irreparable harm, the company said. The Martha Wright Petitioners asked the FCC to give parties until Wednesday to respond to the stay request. The CenturyLink petition was dated Jan. 22 but not received by the FCC and posted electronically this week until Wednesday. CenturyLink said expeditious review is particularly important because the commission could rule soon on the stay petitions of other ICS providers; in fact, the Wireline Bureau denied those petitions Jan. 22 (see 1601220040). Global Tel*Link and Securus Technologies have since asked the U.S. Court of Appeals for the D.C. Circuit for a stay of various ICS rules, including the rate caps (see 1601220040). Separately, Customer Teleconnect, a wholesale telecom provider, asked the FCC to reconsider its order to the extent it "purports to rely on" the company's cost data as an example of an "efficient" ICS provider. "The cost information submitted in good faith by Custom Teleconnect represents the costs that the company incurs to provide a limited number of wholesale calling functions that may be used by ICS providers, but these functions ... do not represent a complete end-to-end ICS service," the company said in a letter posted in the docket. The FCC's "extensive reliance" on the cost information "is in error and misconstrues" the data, which doesn't reflect the full cost to provide inmate calling services, it said.
General Communications Inc. asked the FCC to reconsider its forbearance decision relieving local telcos of equal access and dialing parity duties in rural Alaska as part of a broader order on a USTelecom request (see 1512170052). The commission said the rules were no longer needed to ensure long-distance providers could compete with the long-distance services of local incumbents, though it provided some “grandfathering” protections for existing services. The forbearance, “without regard to the level of competition for local services or the status of equal access deployment, threatens to send or suspend consumers in some of the most remote areas of the country in a 1980s time warp for their long distance services. The relief granted was overbroad,” said GCI in a petition for reconsideration posted Thursday in docket 14-192. GCI said stand-alone long-distance service is common in rural Alaska, unlike in the rest of the nation. “GCI estimates that it is the presubscribed [interexchange carrier] for perhaps one-third of rate-of-return customers in Alaska,” it said. Tim Stelzig, GCI federal regulatory attorney, added: “Equal access continues to be a unique source of competition between long distance providers in Alaska. We don’t believe the Commission intended to send rural Alaskans back to the 1980s when high costs made many families think twice before picking up the phone to make a long distance call.” The Alaska Telephone Association is reviewing the equal access issue but hasn't taken a position on the GCI petition. "Over the years we've seen that applying broad policies in Alaska sometimes has unintended consequences, so at times it's been necessary to tailor rules to fit our unique network," emailed Executive Director Christine O'Connor. "I expect there will be contrasting opinions on the petition," she added, calling ATA a "diverse group" of ILECs and wireline and wireless competitors.
The FCC and stakeholders are making progress on a possible rural USF overhaul, NTCA Senior Vice President Mike Romano told us Wednesday. Romano said NTCA is continuing to talk to the FCC about a variety of ways to approach changes to the existing USF mechanisms of rate-of-return carriers. "Nothing’s firm yet, but I think we’re making good progress in finding a way through the logjam that's been tying things up for months now," he said. Various issues still have to be addressed, such as the basic structure of an overhaul and how to deal with new funding limits and unsubsidized competitive overlap, he said, and timing isn't yet clear. "We continue to treat USF reform issues as if the commission is going to circulate an order at any time," he said, referring to a December statement he made (see 1512240014). "We don’t know when it will circulate, but we're treating it as if it could be any day, any week, any month." A draft rural USF broadband overhaul order is unlikely to be on the tentative agenda due out Thursday for the Feb. 18 FCC meeting, but is more likely for the March 31 meeting, an industry source told us Tuesday (see 1601260063).
Moody's predicted wireline telcos will suffer a "slow yet steady decline" due to various constraints, including "capital allocation practices that favor shareholder returns, lagging infrastructure relative to cable companies and high cost of capital." Telcos such as CenturyLink, Frontier Communications and Windstream "all have high dividend yields that promote a cycle that steadily erodes each company's value and scale," Moody's said in a release Wednesday. "These telcos have strong operating cash flows and the ability to invest more, but they are hindered by market expectations for dividends," said Mark Stodden, a Moody's vice president-senior credit officer. "Their weak market position can only be changed by increased investment, but this would threaten dividends and is unpalatable to both equity investors and management teams." Moody's said there's a widening competitive gap between cable companies and telcos offering mostly DSL. "To compete with cable operators, DSL telcos would need to make significant investments in fiber-optic service, which they are generally unwilling to do," Moody's said, citing a report: "Wireline Telecommunications -- US - Boxed In: Wireline Telcos Face Continued, Painfully Slow Decline." Moody's added, "These factors will together force telcos to make credit-negative decisions pertaining to capital re-allocation that will slowly erode their competitive positions, and ultimately, their credit metrics."
CenturyLink received four fair-opportunity award decisions from the U.S. Defense Information Systems Agency to provide DISA network and data transmission services, said the telco in a Wednesday news release. The task orders, which run through May 2017, were awarded via the General Services Administration’s Networx Enterprise contract and are valued at up to $10 million, it said. CenturyLink will provide ethernet private line and IP services to support advanced data services for global Defense Information Systems Network users in the continental U.S.
Global Tel*Link targeted FCC exclusion of site commission costs as central to its court challenge to the agency's inmate calling service rate restrictions (see 1510220059). The commission order "(i) imposed tiered rate caps for ICS in prisons, jails, and other correctional facilities based on the FCC’s calculation of the cost of providing ICS; (ii) excluded from its calculation of the cost of providing ICS the site commissions ICS providers are required to pay correctional facilities for the right to provide service; (iii) applied its rate caps to both interstate and intrastate ICS calls," GTL said in a statement of legal issues filed Monday with the U.S. Court of Appeals for the D.C. Circuit (Global Tel*Link v. FCC, No. 15-1461 and consolidated cases). GTL said the issues include whether the decision to exclude site commissions from its calculations caused the FCC to set rate caps at levels that (1) prevent ICS providers from recovering their acknowledged costs, (2) are confiscatory and (3) are arbitrary and capricious and otherwise unlawful. GTL also questioned the legality and constitutionality of the rate caps notwithstanding the exclusion of site commission calculations, and whether the FCC had the authority to reduce and cap intrastate ICS rates. In a separate statement, GTL asked for more time to propose a briefing format, since two other parties, Securus and Telmate, have filed legal challenges and the time for filing hasn't closed. The FCC recently denied ICS provider requests for a stay of the order; the providers have said they will seek a court stay (see 1601220040).
Verizon said there was record Fios traffic over the weekend due to customers stuck at home by Winter Storm Jonas. Fios data traffic was up almost 40 percent at its peak Saturday compared with a typical weekend day, and Sunday's numbers "were almost as impressive," said a company release Tuesday. "We also saw record Fios TV Video on Demand requests on Saturday with 50 percent higher demand than a typical Saturday and 20 percent higher than our previous busiest day," Verizon said. "While we certainly don’t wish another blizzard the magnitude of Jonas on our customers, we do want them to know, that the next time they’re stuck at home when they’d otherwise be out having fun, the nation’s largest 100 percent fiber-optic network will be there to help fend off the boredom." Some cable companies in storm-hit areas also reported higher Internet and on-demand usage for the weekend (see 1601250058).
The Fiber to the Home Council cited a member's cost reductions in arguing for Connect America Fund Phase II reverse auction rules that favor fiber deployment. Noting the economic challenges of rolling out fiber networks in rural areas, the FTTH Council said Clearfield Inc. is using innovative practices and equipment to drive down the costs of deployment, including in rural areas. "For instance, in working with a rural provider in a smaller community in Minnesota, [Clearfield] used 'open architecture' equipment and other practices that resulted in the FTTH deployment costing approximately $800 per home passed, which is similar to the cost of an urban build," the trade group said in a filing posted Friday in docket 10-90 summarizing an FCC meeting about the planned CAF II reverse auction, which is the subject of a draft order. "In another build in rural Oregon, the cost to pass a home was approximately $1,100. Just five years ago, the cost of a rural FTTH build was much greater." Clearfield believes more savings can be expected -- particularly on labor, a major cost component -- by providing equipment that's easier to connect and improving productivity through better training, the FTTH Council said. The reduced costs have lowered the "payback period" in rural areas to seven years, it said. Based on market trends, "the Commission should conclude that FTTH deployments in all but the very least dense rural areas are economically viable and will be increasingly so," said the FTTH Council. "This means that the Commission should feel confident that it can use CAF support to bring the same 'future-proof' technology (FTTH networks) to unserved areas cost-effectively and should not fear 'running out of support' if FTTH is preferred in a competitive bidding process." The Utilities Telecom Council and the National Rural Electric Cooperative Association also urged the FCC to adopt fiber-friendly CAF II auction rules, said a filing last week. Commissioner Mike O’Rielly and satellite interests have voiced concerns about a possible FCC fiber preference (see 1511170063 and 1512290025).