TDS Metrocom, XO Ask FCC to Reverse Bureau Order Upholding USAC Audit Findings

Wireline Bureau erred in determining whether mixed-use private line revenue should be considered "interstate" (and assessed for USF contributions) under a "ten percent rule" that assigns private line revenue as intrastate if 10 percent or less of a line's total traffic is interstate. TDS, which combined with US Link, one of the original parties, said the order made errors. "It applies the ten percent rule in violation of Commission precedent; it is based on mistakes in fact that presume all intrastate private lines are mixed use and connected to the Internet; and it violates the Administrative Procedures Act [sic] by substituting new law for old -- applying the ten percent separations rule to CLECs and adopting a new burden of proof and production -- without notice and comment," said the company's application for review posted Tuesday in docket 96-45. TDS said the FCC should reverse the order, apply it only prospectively or give the company a waiver on a 2010 audit. In its application seeking reversal, XO made similar arguments: "The Bureau misinterpreted the Commission’s orders involving the jurisdictional classification of private line revenues and, like USAC, essentially requires [XO] to prove that a circuit is not interstate. Commission history and the purpose of the Ten Percent Rule, however, demonstrate that so-called 'mixed use' private line services are to be treated as intrastate communications if, as in the case of [XO], the circuits are physically intrastate and are configured by the provider as closed networks and there is no affirmative evidence that any of the traffic is interstate."