Reconsideration Petition Seen As Next Front in Accounting Rules Battle

The FCC shouldn’t have granted AT&T forbearance when, in the same order, it concluded cost-assignment data is still necessary, said Anna Gomez, Sprint Nextel government affairs vice president, in an interview. The FCC in its order said it “cannot conclude” that it never will have use for the accounting data and ruled that AT&T still must provide it upon agency request “for regulatory purposes.” It’s “illogical” to admit the data is necessary and then kill the rules requiring collection, Gomez said. Karen Reidy, CompTel regulatory affairs vice president, concurred. “By conditioning relief on a compliance plan, the commission in effect found that oversight of AT&T’s accounting processes and systems remains necessary,” she said.

The petition also questions letting AT&T craft its own compliance plan. That’s like letting a “fox guard the hen house,” Gomez said.

The FCC should reject the Sprint petition, an AT&T spokesman said. “For 15 months the [FCC] thoroughly reviewed the record in this proceeding, including Sprint’s previous filings and arguments,” he said. “Now, Sprint is asking for a ‘do over.'” The FCC never said the data was still necessary, he said, highlighting a line from the order saying “there is no current, federal need for the Cost Assignment Rules, as they apply to AT&T, to ensure that charges and practices are just, reasonable, and not unjustly or unreasonably discriminatory; to protect consumers; and to ensure the public interest.”

Angling for “me too” relief, Qwest and Verizon discussed the AT&T order with the FCC General Counsel office last week, according to a Verizon ex parte. “The Commission’s rationale in granting AT&T forbearance compels extending the same relief to Verizon and Qwest,” Verizon said. “Like AT&T, Verizon and Qwest are federal price cap carriers, and thus on the federal level there is no link between Verizon and Qwest’s costs and customer rates.” The Bells are willing to file compliance plans to address FCC forbearance conditions in the AT&T order, Verizon said.

Foes of AT&T forbearance expected Qwest and Verizon to seek similar relief, and plan to focus on reversing the “precedential” AT&T order, said James Blaszac, a lawyer for the Ad Hoc Telecommunications Users Committee, in an interview. Ad Hoc represents 21 major customers of telecom companies, including financial, manufacturing and other big businesses.

Opponents will focus on the reconsideration petition, because there are “no meaningful distinctions” between AT&T and either Qwest or Verizon that would stop the FCC from applying the same relief, a CLEC lawyer told us. Forbearance foes can push off opposition to Qwest and Verizon petitions until late 2009, when a fresh batch of FCC commissioners will be required to review them, the lawyer said.

It’s “not clear” within what context Qwest and Verizon seek “me too” relief, Gomez said. Verizon and Qwest have forbearance petitions seeking relief from Automated Reporting Management Information System (ARMIS) requirements. They haven’t filed “me too” petitions based on the AT&T order. The carriers’ forbearance petitions seek to end reporting -- not collection -- of cost-allocation data, Gomez said. To get me-too relief, the Bells must file new, identical forbearance petitions, she said. “Verizon and Qwest have not sought the same relief that the Commission granted AT&T and have not demonstrated that they are entitled to it,” agreed Reidy.

A Verizon spokesman wouldn’t specify how the carrier expected relief. “In the past, such things have been done different ways -- based on petitions and not,” he said. “We'll have to see what the FCC does.” Qwest didn’t return a request for comment.

It’s unusual that Qwest and Verizon lawyers combined their efforts, but it makes sense considering they both stand to benefit from the AT&T order, Blaszac said. A Qwest spokesman explained: “Since the relief we both sought was similar in nature, it was an efficient manner to discuss the pending request.”