Great Lakes Comnet criticized the FCC defense of an order that sided with AT&T in finding certain GLC access-charge tariffs exceeded a CLEC benchmark rule. The FCC justification (see 1510060033) of its interpretation of Rule 61.26 “is inconsistent with the Rule’s plain language, contravenes the FCC’s past pronouncements as to its meaning, and involves mutually inconsistent interpretations of different subparts of Rule 61.26,” said GLC and subsidiary Westphalia Telephone in their reply brief Wednesday to the U.S. Court of Appeals for the D.C. Circuit (Great Lakes Comnet v. FCC, No. 15-1064). GLC said the FCC order “retroactively changed the plain meaning of Rule 61.26 in an adjudicatory proceeding. The agency found the intermediate carrier was a CLEC -- and thus couldn’t have access tariffs above an ILEC competitor’s rates -- even though its tandem-switch and transport services didn’t directly serve retail end users. GLC said that finding “nullifies the carve-out" from unpaid bill-and-keep traffic exchanges the FCC created for intermediate carriers in a 2011 intercarrier-compensation overhaul. GLC said the FCC also erred in (1) not giving it a rural exemption, (2) finding AT&T Michigan was the competing ILEC, (3) engaging in an unconstitutional taking by forcing it to offer services for free through bill-and-keep, (4) applying the decision retroactively, and (5) making certain statute-of-limitations findings, which GLC said the commission had conceded. The company said the FCC brief made various misstatements of facts, including suggesting long-distance carriers such as AT&T have “no choice” of intermediate carriage to reach local networks, which GLC said it did. GLC also disputed FCC claims that the company (1) “inserted itself in the traffic stream," when instead it had responded to an AT&T service request, (2) “stipulated that it serves urban areas,” when it noted only that it had transport facilities in both urban and rural areas, not that it "served" (originated/terminated traffic from/to) end users in urban areas, and (3) engaged in improper billing to “disguise” traffic, when it made a “simple billing mistake” that was quickly fixed.

The FCC proposed to freeze video relay service rates for smaller VRS providers, which along with larger providers have been subject to regular compensation rate cuts. The commission proposed to partially modify ongoing rate cuts in a four-year VRS compensation plan adopted in 2013 "by adopting a limited-duration compensation rate freeze applicable to VRS providers with 500,000 or fewer monthly minutes," said a Further NPRM released Tuesday in docket 10-51. "Under this proposed modification, such providers will receive compensation at a rate of $5.29 per minute for a maximum of 16 months beginning July 1, 2015. We also seek comment on whether to adopt a number of measures that could enhance the functional equivalence of VRS." As expected (see 1510220067), the notice didn't include an order, as a draft VRS item originally contemplated (see 1510160026). Commissioner Mike O'Rielly, who said he supports seeking comment on freezing the rates for the three smallest VRS providers, partially dissented from the FNPRM. He cited concerns about potentially unjustified expenses.

NTCA raised questions about a possible FCC “bifurcated approach” to rural telco USF reform under which prior expenses would be recoverable through existing mechanisms while new investments and some stand-alone broadband expenses would be recoverable through new mechanisms. “While it is important to get reform done quickly, it is more important to get reform done right,” NTCA said in a filing posted Monday in docket 10-90 on a meeting with a senior FCC staffer. The rural telco group asked what the bifurcated approach's objective is, given that it believes FCC-articulated reform principles are more likely to be achieved by “already-proposed measures,” such as “budget controls and reasonable limits on operating expenses and prospective capital investments." Plus, NTCA said existing high-cost loop support (HCLS) and interstate common line support (ICLS) mechanisms have "shortcomings," but they have worked "better than any other system" to encourage and enable sustainable rural broadband investment. It's “essential that any reforms strike a careful balance toward both a reasonable opportunity to recover costs in accordance with the rules in place at the time the relevant investments and associated expenses were incurred and the need to provide sufficient and predictable support for future broadband deployment and operations; neither can or should be sacrificed for the other,” NTCA said. The group also voiced concerns about any “artificial cut-off” of HCLS/ICLS support that would move all associated costs “to the new mechanism as of a future date certain.” NTCA said HCLS and ICLS support should “continue for the useful life of networks used to deliver supported services; even after those networks are fully depreciated, rural rate-of-return-regulated local exchange carriers ('RLECs') will continue to incur expenses to deliver voice and broadband services over them.” NTCA also noted the “time sensitivity” of a request for commission review of a Wireline Bureau denial of a petition for reconsideration of an HCLS rate floor, which rural telcos believe was flawed. Rural telcos aren’t substantively challenging the application of the rate floor to HCLS support, but its methodology, and the FCC should act “well in advance of June 2016" to set "a more reasonable methodology,” the group said.

The current FCC appears to be waging a “war” against private infrastructure investment, Bob Quinn, AT&T senior vice president-federal regulatory, said Tuesday in a blog post. Quinn cited reports that the agency is sending out “SWAT” teams of FCC staffers “to preach the use” of USF dollars “to build government-owned and operated broadband infrastructure in rural and non-rural areas,” and pointed to the agency’s enhanced look at special access rates. “To be clear, we at AT&T have no problem with government-owned networks in areas where there has been a market failure because the economics for the private sector just don’t work,” Quinn wrote. “Unfortunately, the FCC’s advocacy here … doesn’t appear to be limited to circumstances of market failure.” In the past, “incenting all companies to build broadband was THE goal of all policymakers. It doesn’t feel that way anymore,” he said. The FCC started down this “circa-1980’s regulatory journey” three years ago, he said. “I fretted that these moves signaled its intent to abandon policies that were designed to, and did, result in significant broadband infrastructure investment in the U.S. I called the FCC’s moves the Bridge to Nowhere. My point then, and still is, that the FCC should be focused on establishing policies that lead to more fiber and broadband infrastructure investment in this country. ... It’s high time the FCC got serious about policies that incent that kind of investment.”

The FCC Wireline Bureau announced the timeline for an urban rate survey of fixed voice and broadband service providers. Email notifications will be sent on or about Tuesday to Form 477 contact persons of fixed service providers that are required to participate in the survey, with completed surveys due Dec. 8, the bureau said in a public notice posted in docket 10-90 Friday.

USTelecom pressed FCC officials for approval of a petition for forbearance relief from special access discount restrictions and other rules. "We discussed the relief sought in that petition, particularly in the areas of discounting special access services, equal access requirements and structural separation mandates placed on rate-of-return carriers," said a USTelecom filing posted Monday in docket 14-192. "FCC rules that explicitly ban offering lower prices to customers that want them seem unlikely to serve the public interest. USTelecom’s Petition seeks targeted relief that would provide consumers immediate benefits from increased discounting while preserving the Commission’s broad powers to act."

AT&T's peering policy with ISPs and Internet backbone providers "is typical of those in the industry (and more generous than some)," the company said in a filing posted Monday in docket 15-149 as part of a response to Media Bureau document requests (see 1510130063) for data in the review of Charter Communications buying Bright House Networks and Time Warner Cable. AT&T said its policy broadly is to allow "a peer to transmit up to two times more traffic ... than it receives from AT&T." Third parties also can interconnect with AT&T's network via Managed Internet Service and the Content Interconnection Platform, it said. The heavily redacted filing also gave some details on AT&T's data cap policy -- offering 150 GB/month service to DSL customers, and charging $10 for every 50 GB used beyond that; and through its U-verse high-speed Internet providing 250 GB/month as the lowest-priced data plan option, with that allowance increasing with higher-speed plans -- and gave no indication of any intention to change those policies.

WTA members voiced doubts about a broadband cost model and some other aspects of a potential FCC overhaul of high-cost USF mechanisms for rural rate-of-return telcos. Arvig Enterprises, 3 Rivers Communications and the Range family of telecom companies said they have yet to determine the likely impact of possible future USF support on their operations “due to the number of significant details that remain unresolved” in two-track proposals to give rural telcos the option of receiving support based on a broadband cost model or based on updated USF mechanisms. The companies “expressed concerns regarding the general accuracy of the price cap-based model for rural companies, as well as their present inability to determine the amount of Model-based support they might receive and their associated build-out obligations,” said a WTA filing posted Monday in docket 10-90 on their meeting with an FCC staffer. They said their ability to serve remote, high-cost customers would be undercut if the FCC reduces a cap on model-based support per location. “They also noted that many state universal service funds are tied to the existing federal mechanisms, such that shifts to Model-based support could mean loss of state support by some rural carriers,” the filing said. “The companies also expressed concern that the proposed bifurcated rate-of-return path was being developed in a rapid and untested manner, and could well entail a number of unforeseen consequences. They pointed particularly to the increased recordkeeping and accounting complexities and costs and the difficulties of accurately and equitably allocating investments and associated operating expenses.” In addition, they suggested the FCC’s current 10/1 Mbps broadband USF definition won't be “reasonably comparable to urban broadband speeds and applications for very long” (such reasonable comparability is a statutory USF standard). Whatever high-cost support changes the FCC makes, the companies stressed the need for “stability, predictability and sufficiency." WTA made similar filings (here and here) on behalf of Range and Volcano Communications after meetings with other FCC staffers.

The time frame of the video relay services (VRS) program Further NPRM will likely take providers past at least one more rate cut, said ASL Services, CAAG/Star VRS and Convo Communications in a filing in FCC docket 03-123 posted Friday. The companies identify themselves as the three "smallest, emergent and minority-owned businesses" that are being compensated at a rate lower than their reasonable and necessary costs of providing VRS. The companies said they requested an expedited process because any further reductions in rates could put them out of business.

The FCC should get going on reforming its USF contribution system, ITTA and the Montana Telecommunications Association (MTA) said Friday. There is “growing pressure on the Universal Service Fund as the Commission considers expanding the scope of services supported by USF programs,” said midsize-telco group ITTA in a filing posted in docket 10-90 summarizing an Oct. 28 meeting with Gigi Sohn, counselor to FCC Chairman Tom Wheeler. “We urged the Commission to undertake USF contribution reform and broaden the base of contributors before taking any further steps to modify the Lifeline program to include support for broadband services.” MTA also urged the FCC to address contribution reform, “particularly given the increasing pressure on the high cost reform efforts caused by budgetary restraints and the shrinking contributions base,” the association said in a filing on its meetings with aides to Wheeler and Commissioners Mike O'Rielly and Jessica Rosenworcel. An FCC spokesman said the issue was before a federal-state joint board. Carriers currently contribute 16.7 percent of their interstate and international telecom revenue to USF, a rate that has trended up over the years as subsidies have increased and the industry revenue base has eroded. Carriers generally pass the fees along to consumers.