AT&T agreed to pay $10,080,600 in a consent decree to end FCC investigations into whether the company violated FCC rules on customer proprietary network information and recovery of universal service fund contributions from customers, the FCC said late Tuesday. AT&T also agreed to develop, within 60 calendar days, plans to ensure future compliance with FCC rules, the FCC said. The investigations related to complaints about AT&T’s CPNI opt-out mechanism, and a voluntary disclosure by AT&T that it had recovered federal USF contribution costs from end users in excess of permitted amounts. “While these were inadvertent errors, we regret that they occurred,” AT&T said in a statement. “To resolve these matters, we have entered into a consent decree, which includes implementing additional internal controls.”
A universal-service revamp and broadband are priorities for the House Commerce Communications Subcommittee, Chairman Rick Boucher of Virginia said in an interview. His official agenda awaits suggestions from Commerce Chairman Henry Waxman, D-Calif., Boucher said. The committee plans an organizational meeting Wednesday afternoon. Boucher said he also wants to gather the views of subcommittee members before creating a hearing schedule and legislative wish list.
The NCTA proposed changes that the next administration could make at the FCC. A letter from NCTA President Kyle McSlarrow to Susan Crawford, co-lead of the FCC Agency review team from the Obama-Biden transition team, said there should be a clearer distinction between notices of inquiry and notices of proposed rulemaking. “In particular, broad inquiries that lack any tentative proposals should be deemed to be inquiries rather than NPRMs,” McSlarrow said. Once rulemakings are crafted, the public should know, he said. “It would also be important to make public the text of the rule or decision proposed for action no later than when the agenda meeting items are circulated.” The NCTA also laid out broadband stimulus and USF recommendations. It favors a technology-neutral approach to any broadband stimulus and thinks new deployments should be targeted in unserved areas, the letter said. Congress should also look at sparking demand for broadband by helping make computers and laptops more affordable, McSlarrow said. Meanwhile, Massachusetts Executive Office of Housing and Economic Development Secretary Daniel O'Connell sent the transition team a memo detailing his state’s public broadband-stimulus activities. The memo recommends giving states direct grants and offering loans, loan guarantees or tax incentives to private businesses. “If demographically-targeted outreach is contemplated to raise broadband adoption levels as part of the stimulus package, it may be best implemented in the form of flexible grants to states, counties or cities, or directly to non-profits,” the memo said.
An overhaul of intercarrier compensation and the Universal Service Fund could upset broadband deployment and hurt companies in and outside the telecom industry, telecom interests warned in reply comments this week. Replies were due Monday on three FCC overhaul plans. Though many arguments were repeats from the initial comment round, some new faces appeared, including the U.S. Department of Agriculture Rural Utilities Service, and associations for utilities and payphone providers.
The Alarm Industry Communications Committee said that if the FCC makes their members pay into the Universal Service Fund, the effect would be “devastating.” The group filed in a FCC docket seeking comment on various proposals for USF reform, which include proposals to base USF contributions on individual phone numbers. “The imposition of either an $.85/number or $l/number charge could have devastating effects on a rapidly growing sector of the alarm industry,” the group said. It noted that its service, connecting alarms to a central office, does not touch the PSTN and customers would not be able to make or receive calls. “The transmission between the customer’s premise and the alarm monitoring center is specified by the alarm company, and not the customer,” the filing said. “The panel dials a predetermined number which serves the alarm company and … the panels may not be used to dial the PSTN except with extreme difficulty, if at all.”
Stifel Nicolaus, handing out its annual tongue-in-cheek awards, gave FCC Chairman Kevin Martin a special prize for helping stimulate the economy. He “starts sudden effort for big reform of long-running intercarrier compensation combined with USF,” the firm said. “No vote, but generates huge lawyers’ fees just as economy requires Keynesian jolt. Like the National Recovery Act, Mr. Martin did his part.” AT&T got several awards, including a special one for “not quite eating their own dog food": “Telecom giant that preaches virtues of connecting everyone through telecommunications, moves headquarters from San Antonio to Dallas to ‘gain better access to its customers and operations.'”
Two associations for small rural carriers urged the FCC to reject the agency’s reverse auctions plan for Universal Service Fund distribution. Earlier this month, FCC Chairman Kevin Martin voted for that proposal, which is the second of three FCC plans to overhaul USF now out for comment (CD Dec 15 p3). Other commissioners haven’t voted yet. In a Thursday ex parte letter to the FCC, the Western Telecommunications Alliance and the Organization for the Promotion and Advancement of Small Telecommunications Companies said reverse auctions would thwart broadband investment in rural areas. Auctions “would generate significant unpredictability for rural carriers, which is the enemy of network investment,” OPASTCO and WTA said. And major lenders to rural incumbent local exchange carriers have said “the uncertainty of rural carriers’ cost recovery under a reverse auction mechanism would cause them to restrain the amount of debt made available,” they said. Also, auctions are a “'race to the bottom’ that will drive carriers to submit bids that are well below what they actually need to maintain and upgrade their networks to provide an evolving level of quality services in high-cost rural areas,” they said.
Rural phone companies met Tuesday with members of the Obama-Biden transition team to discuss proposals for broadband incentives in the economic recovery package, executives said. Verizon, AT&T, Qwest, and USTelecom met with the team last week to offer suggestions, company officials said. Documents from the meetings are starting to make their way to Change.gov, the transition team’s Web site. President-elect Barack Obama has promised to publicize meetings with business representatives, to post summary documents and solicit public commit.
Concerns are growing that the FCC faces additional sanctions from the U.S. Court of Appeals for the District of Columbia Circuit unless it provides an additional response to that court on the ISP remand beyond its interim order released last month, FCC and industry officials said this week. The FCC on Nov. 5 issued an order responding to the court’s long-standing remand by providing additional justification for the original 2001 ISP-bound traffic rule, without changing compensation rules overall.
Improved audit processes would improve distribution of Universal Service Fund money, the National Exchange Carrier Association said in reply comments to an October FCC inquiry into how it might strengthen USF management, administration and oversight (CD Nov 17 p6). The FCC Office of Inspector General has identified “a large portion of payments … as erroneous due to documentation issues or audit disclaimers,” NECA said, citing a recent OIG report that the high-cost fund has a 23.3 percent error rate: “Reporting these as ‘erroneous’ appears to materially overstate the extent of actual incorrect or improper high cost disbursements.” In separate reply comments, the Independent Telephone & Telecommunications Alliance agreed that USF audits are in a bad state. “While some [ITTA members] identified few discrete problems, others described audits that, when held against multiple state commission audits spanning three decades … were the ‘worst … ever seen,'” ITTA said. Members had common criticisms, including auditors’ knowledge of telecom, unclear FCC document retention rules and an inefficient audit process, it said.