Three telcos asked the FCC to allow price-cap carriers to opt out of Part 32 accounting rules and move to generally accepted accounting principles (GAAP). AT&T, CenturyLink and Verizon said they were making regulatory proposals in response to commission suggestions that price-cap carriers could be shifted from the Part 32 uniform system of accounts (USOA) while continuing to provide necessary information for the agency to perform oversight. "These changes would permit a price cap carrier, on an optional and voluntary basis, to opt-out of the Commission’s Part 32 USOA requirements and, if it did, would provide that the carrier is relieved of the Part 32 rules in their entirety with the exception of a single, targeted obligation: to maintain the ability to create and report, upon request by the Commission, its GAAP accounting data in conformance with the Part 32 account structure," said a filing Friday in docket 14-130 from the three telcos. They said an FCC order providing such relief also could subject carriers to certain targeted conditions, including a lengthy transition on pole attachments rates in which carriers opting for the relief "would be required to adjust (increase or decrease) their annually computed GAAP-based rates by an Implementation Rate Difference for twelve years."

Incompas lamented the FCC's inability to update business data service regulation, as it responded to news that Chairman Ajit Pai had pulled a draft BDS order circulated by previous Chairman Tom Wheeler (see 1701280001). “Failure to fix the broken business broadband marketplace has saddled America with consolidation, not competition, and poses a serious threat to infrastructure goals necessary to putting America first in the race for faster, more affordable networks of the future," CEO Chip Pickering said in a statement Monday. “Without real broadband choice, business customers -- including hotels, schools, hospitals and libraries -- will remain trapped by monopoly rents. We must stop forcing businesses to pay more for slower speeds, and start encouraging competition that will unleash billions in new private network investment and create new jobs. ... We hope the FCC will re-engage and not let business broadband competition and the 5G future slip away.” Other stakeholders we queried declined to comment.

About 30 rural telcos told the FCC this past week they intend to stop offering broadband internet transmission service as separate components of their broadband internet access services. Minnesota Valley Telephone and Winthrop Telephone made filings (here and here) Friday of their broadband intentions, joining other rural telcos from Minnesota, Wisconsin and Iowa that made such filings in dockets 01-92, 14-28 and 10-90 earlier in the week. Under a Wireline Bureau clarification last June of the FCC's net neutrality and broadband reclassification order, the rate-of-return carriers said, "the revenues associated with the broadband internet access transmission would no longer be subject to the federal universal service fund assessment." FairPoint Communications made a similar move last year (see 1606280037).

New FCC Chairman Ajit Pai is champing at the bit to undo broadband regulation, said CCMI telecom consultant Andy Regitsky in a Friday blog post. But he also said Pai wants increased agency transparency and cooperation between commissioners: "Pai is likely to share drafts of important decisions with commissioners of both political parties unlike ex-Chairman Tom Wheeler. It is even possible those draft orders could be made public. Still to be determined is whether Pai will actually compromise with Democrats on important issues." Regitsky said Pai and fellow Republican Commissioner Mike O'Rielly "can quickly begin undoing some of the pro-regulatory actions of ex-chairman Wheeler," including the net neutrality order -- which also reclassified broadband under Communications Act Title II -- and related privacy rules. He said the FCC will ignore concerns about broadband zero rated plans: "With the pressure off, it is likely that ISPs will introduce a flood of such services." Even "more discouraging to ISP competitors and consumer advocates, the new FCC is likely to sit on or discourage most section 208 complaints" while final net neutrality details are determined, he wrote. Rolling back net neutrality and privacy rules, and eventually eliminating special access price caps, "will almost certainly advantage large and established companies. That is why large ISPs, cable companies and their associations are almost giddy with anticipation over Pai’s appointment," he wrote.

Global Tel*Link urged the new FCC to ask a court to hold an inmate calling service case in abeyance due to the change in commission leadership, said the ICS provider's filings Thursday in docket 12-375 on meetings with aides to Chairman Ajit Pai and Commissioner Michael O'Rielly. A split panel of the U.S. Court of Appeals for the D.C. Circuit decided Jan. 18 to proceed with its review and set Feb. 6 oral argument on petitioner challenges to the commission's ICS rate caps, fee restrictions and other decisions in Global Tel*Link v. FCC, No. 15-1461 (see 1701180026). Previous abeyance requests of ICS provider, state and sheriff petitioners were opposed by the Democratic-run FCC and DOJ, but they're now under Republican control. In dissenting from the Jan. 18 panel order, Judge Laurence Silberman said he wouldn't be surprised if the new FCC "changes its position and we had to cancel the Feb. 6 oral argument."

AT&T asked a court to deny a Bandwidth.com appeal of a panel ruling that vacated an FCC intercarrier-compensation decision siding with CLEC and VoIP partners (see 1611180063). The 3-0 panel overturned the decision "on a basic ground of administrative law: the FCC failed to explain its decision adequately," said an AT&T response (in Pacer) to the U.S. Court of Appeals for the D.C. Circuit. The court had asked the telco to respond to a petition filed by Bandwidth.com and other intervenors to rehear AT&T v. FCC, No. 15-1059 (see 1701110054). "The panel committed no error -- much less one of 'exceptional importance.' The FCC itself does not seek rehearing or rehearing en banc, and for good reason: Intervenors' claim of error rests on a myopic reading of the arguments AT&T raised and the bases for the panel's decision," the big telco wrote. Bandwidth.com said the case "presents a question of exceptional importance" because the panel judges allegedly went beyond AT&T's arguments and decided the case based on their own research. Interpreting a VoIP symmetry rule, the FCC found CLEC/VoIP partners provide the "functional equivalent" of end-office switching and can thus collected associated access charges, which are higher than tandem-switching charges. But the panel vacated the order because the FCC's test can't distinguish between end-office and tandem switching functions, AT&T wrote, and that conclusion flowed directly from the telco's claim the agency didn't account for the unique functions of end-office switching. The panel thus didn't rule "on the basis of arguments not presented by AT&T," the telco said. It also said intervenors were "wrong to suggest that '[w]hether a court may go beyond the arguments presented by a petitioner' presents a 'question of exceptional importance' warranting rehearing." The question already was decided against intervenors, the carrier wrote, as one of the D.C. Circuit cases they cite (Carducci v. Regan, 1983) "makes clear that a panel 'is not precluded from supplementing the contentions of counsel through [its] own deliberation and research' ... Even if the panel had created the 'failure to distinguish tandem switching' theory out of whole cloth -- and it did not -- that would not justify further review."

New York gave funding assurances on a state broadband subsidy auction that it's hoping to augment with $170.4 million repurposed from a planned FCC Connect America Fund auction. Empire State Development counsel John Beahn said he spoke with FCC Wireline Bureau staffer Heidi Lankau Tuesday. "I confirmed that New York State would make at least $200 million available in the upcoming phase of its reverse auction to ensure that State broadband funding would meet or exceed any federal CAF funding allocated and awarded pursuant to the waiver," he said in a filing in docket 10-90. "This phase of the New York auction will include areas previously declined by Verizon, as well as other unserved areas to be auctioned by the State." The Wireless Internet Service Provider Association and ViaSat oppose the CAF auction waiver sought by New York (see 1701240056). The FCC could act "relatively soon," an agency official said last week (see 1701190060).

Lack of strong opposition to CenturyLink's planned buy of Level 3 is "encouraging" for the deal's prospects, Cowen analyst Paul Gallant wrote investors Wednesday. He noted Incompas, which counts Level 3 as a member, "raised several concerns but also seemed open to merger approval with meaningful conditions" (see 1701240037). "We view these developments as positive for deal approval," he wrote. His key takeaways were: there are fewer opponents to CenturyLink/Level 3 than to last year's Verizon/XO, which was approved; additional parties may still file; business data service (BDS) "is the key issue"; and possible pricing and structural remedies may help close the deal. "We believe the DOJ's and FCC's main focus will be on the office buildings where CenturyLink-Level 3 would be 2-to-1 merger. CenturyLink says there are a total of 100 such buildings," he wrote. Although Incompas says that understates the competitive overlap, Gallant doesn't view BDS overlap as a deal-killer: "DOJ and FCC have approved past ILEC-CLEC mergers (CenturyLink-Qwest, Verizon-MCI, SBC-AT&T) in which the remedy for lost BDS competition was either price caps for BDS service or divestiture of facilities in discrete buildings. Either way, we believe the deal will be approved because: A) The deal appears to have at least some pro-competitive effects (e.g. CenturyLink-Level 3 as a stronger competitor to the larger AT&T and Verizon for multi-location customers); and B) Conditions like price caps and divestitures are well-established remedies in comparable mergers."

TDS Telecom will get about $75.1 million annually for 10 years from the FCC Alternative Connect America Cost Model (A-CAM), the company said in a Wednesday news release. FCC staff Tuesday approved 182 rural telcos to receive $454 million in annual funds through A-CAM (see 1701240046). TDS plans to use its share to expand and upgrade broadband service for about 160,000 homes in 25 states over the next decade, starting this quarter, it said. Speeds will vary by location, with most covered TDS customers getting 25/3 Mbps and the rest getting 10/1 Mbps, the company said. The carrier plans to release buildout maps and other details in the next few weeks, it said. “We look forward to working with our local communities on this massive endeavor to improve internet speeds,” said Executive Vice President Kevin Hess. “Consumers want to work remotely and are seeking faster speeds than the existing, deployed DSL technology was designed to handle.”

The Wireless Internet Service Providers Association and ViaSat continued to oppose New York's petition to repurpose FCC Connect America Fund Phase II auction money for its own state broadband auction. WISPA and ViaSat responded to recent filings by New York, Massachusetts and the American Cable Association. "Granting New York State’s Petition would: (i) undermine the Commission’s efforts to distribute CAF II resources fairly and efficiently through the upcoming, nationwide reverse auction; and (ii) result in a shortage of funding to serve households in other states under CAF II," said their filing Tuesday in docket 10-90. New York broadband program rules are also "inconsistent with the Commission’s universal service policies, particularly because New York State’s rules are not technology neutral and not based on cost-effectiveness or performance," wrote the ISP group and satellite firm. "Neither New York State nor any other party has refuted either point." The FCC could act "relatively soon," said an agency official last week (see 1701190060).