Adam Bender

Competitive carriers and their investors arrayed in droves against a Verizon forbearance petition seeking relief from loop and transport unbundling requirements in parts of Virginia Beach, where Cox is the incumbent cable operator. Comments on the request were due Tuesday. Sprint Nextel, a longtime special access reform advocate, also joined the fray. The opposition wasn’t unexpected: CLECs and Sprint also are fighting a Verizon forbearance petition seeking similar relief in Rhode Island.

Arguments against a Verizon petition seeking forbearance in Rhode Island urge the FCC to “impose more demanding criteria than it has used in the past,” Verizon said in reply comments. The carrier seeks relief from loop and transport unbundling requirements. “The commenters do not seriously dispute that Verizon meets the [FCC’s] coverage threshold and share-of-residential-lines tests,” Verizon said. The FCC has studied wireless and cable competition in forbearance petitions before and may do so again, Verizon said. Also, measuring Rhode Island competition on a rate center basis is more appropriate than doing it by wire center or metropolitan statistical area, Verizon said. “Rate centers equally reflect the areas in which competing carriers and Verizon provide local telephone service, and Cox and other cable operators internally track their coverage by rate center.” Verizon got no support in initial comments, said a filing by Covad, NuVox and XO Communications. “The comments were unanimous that Verizon has not met the statutory requirements for forbearance and that a grant of forbearance would result in significant negative impacts on consumers throughout Rhode Island.” The FCC should deny the petition because Verizon hasn’t provided sufficient data to show facilities-based competition in the mass or enterprise market, they said. “Instead, it relies on high-level or imprecise data obtained from websites.” Also, Verizon hasn’t given any competition data on the wholesale market, they said.

There’s room for two prepaid carriers in Las Vegas, Leap Wireless CEO Doug Hutcheson said Tuesday at a Morgan Stanley conference in Washington, D.C. Leap rival MetroPCS already has footing in the market, but Leap’s entry should enlarge the pie, not split it, Hutcheson said. Meanwhile, the economic slowdown has created a consumer “flight to value” that has benefitted Leap this year, Hutcheson said. The carrier struggled against economic “headwind” in the second half of last year, but has been doing better since Black Friday, he said. Leap released upbeat Q1 results last week (CD May 12 p6). Asked about a potential merger with MetroPCS, Hutcheson stuck to the script. A combination makes sense, but it’s not a discussion that will happen in public, he said.

The telecom industry is skeptical about FCC Chairman Kevin Martin’s headline-making pledge to tackle broad intercarrier compensation reform in six months. An FCC lawyer announced the Martin-authorized promise in oral argument May 5 at the Court of Appeals for the District of Columbia Circuit (CD May 6 p1). More likely, industry sources said, the FCC will only act on compensation for ISP- bound traffic, a subset issue that the D.C. Circuit remanded for FCC action back in 2002. But even that’s not certain unless the appeals court grants a Core Communications request for a writ of mandamus forcing the FCC to act, a telecom analyst said.

AT&T suggested three legal paths the FCC could take to retain current rules governing reciprocal compensation for ISP-bound traffic. In 2002, the Court of Appeals for the District of Columbia Circuit asked the FCC to give a statutory basis for a nine-year-old interim regime that exempts ISP-bound traffic from the rules, which require incumbent local exchange carriers to pay terminating competitive LECs for traffic the ILEC originates. In an ex parte letter, AT&T urged the FCC to point to section 251(i) of the Telecom Act, which says nothing in section 251 “shall be construed to limit or otherwise affect” the FCC’s section 201 authority. “That language preserves the [FCC’s] traditional authority to continue setting rates it deems ‘just and reasonable’ under its traditional section 201 authority for jurisdictionally interstate traffic, including ISP-bound calls,” AT&T said. The FCC “can and should also” follow a District of Columbia Circuit Appeals Court suggestion to “justify its current scheme under the bill-and- keep savings clause of section 252(d)(2)(B)(i),” AT&T said. It should also conclude that terminating ISP-bound traffic creates “zero” additional costs “in light of the [enhanced service provider] exemption,” AT&T said.

FCC Chairman Kevin Martin’s pledge to reform intercarrier compensation within six months was news to at least two commissioners’ offices. An FCC lawyer announced the Martin-authorized promise in oral argument Monday at the Court of Appeals for the District of Columbia Circuit (CD May 6 p1). “We never thought Martin was that interested” in intercarrier compensation, one eighth floor source told us: “You learned about it when we learned about it.”

The FCC might not have authority to set emergency backup power rules for carriers, Judges David Sentelle and Raymond Randolph suggested in oral arguments on CTIA’s appeal in the U.S. Court of Appeals for the District of Columbia Circuit. CTIA, Sprint Nextel, T-Mobile and USA Mobility challenged the rules, adopted after Hurricane Katrina (CD March 16 p10).

The FCC should condition its grant of 700 MHz C-block licenses to Verizon on that carrier’s acceptance of open- access obligations on its own devices, Google said Friday in a petition. “Failure to do so now will only foster uncertainty and delay, rather than innovation and investment,” Google said. Verizon claims the right to exclude its handsets from the open-access condition imposed on the C block in the 700 MHz auction, Google said. If Verizon does so, it could block applications on its C-block devices, Google said. “Verizon believes it may force customers who want to access the open platform using a device not purchased from Verizon to go through ‘Door No. 1,’ while allowing customers who obtain their device from Verizon access through ‘Door No. 2,'” Google said. Google’s petition is “sour grapes,” a Verizon Wireless spokesman said: “We knew the auction rules before we bid, and of course are abiding by those rules.” The company plans to respond to the petition this week, he said.

The FCC will come out with a comprehensive intercarrier compensation revamp in six months, FCC lawyer Joseph Palmore said during oral arguments on Core Communications’ appeal in the U.S. Court of Appeals for the District of Columbia Circuit. FCC Chairman Kevin Martin authorized the statement, Palmore said. Core seeks a writ of mandamus telling the FCC to provide within 60 days a statutory basis for a nine-year-old interim compensation scheme for ISP-bound traffic.

USTelecom named a former top advisor to Rep. John Dingell, D-Mich., a deputy to Walter McCormick, the association’s president. Alan Roth, former House Commerce Committee staff director and chief counsel, will fill a new position of senior executive vice president, USTelecom said. Starting June 1, Roth will oversee all government affairs, said a USTelecom spokeswoman. Regina Hopper, USTelecom executive vice president, will oversee all other external affairs, she said. Both will report to McCormick. “It’s clear that USTelecom and other incumbent providers are gearing up for [a] tough next two years with growing Democrat majorities” and perhaps a Democrat president, said Paul Raak, legislative affairs vice president for the Independent Telephone & Telecommunications Alliance. “Here at ITTA we are evaluating our strategy for the next two years as well, which will no doubt be challenging.”