“Something has gone seriously awry at the FCC,” Commissioner Ajit Pai said after the U.S. Court of Appeals for the D.C. Circuit stayed the agency’s inmate calling rate caps for a fourth time. The D.C. Circuit granted Securus and others the stay Wednesday (see 1611020060). “I am not aware of any other proceeding in which the courts have intervened this frequently to block agency action,” Pai said in a statement Thursday. “Three times I have urged my colleagues to adopt reasonable regulations that would substantially reduce interstate inmate calling rates and survive judicial scrutiny. Three times they have declined.” It’s part of a “broader trend” of rejecting bipartisan compromises in favor of “legally flawed decisions on party-line votes,” Pai said. “This isn’t how the FCC used to operate. I hope that the agency will someday return to working together to deliver actual, legally sustainable results for the American people.”

Alaska Communications welcomed the FCC's Monday order setting its service duties for using $19.7 million in annual Connect America Fund Phase II "frozen" USF subsidy support to deploy broadband in the state (see 1610310056). The company "is pleased to reach this important milestone with the FCC, setting the stage for the single largest deployment of affordable broadband under any one program in Alaska,” said Leonard Steinberg, senior vice president-legal, regulatory and government affairs, in a release Tuesday. The funding will assist broadband expansion to rural communities along Alaska's highways but doesn't address middle-mile needs for deploying affordable broadband in bush communities not accessible by road, it said.

Frontier Communications showed weak revenue in newly acquired markets from Verizon, Wells Fargo analysts said after Frontier released Q3 results Wednesday. In April, Frontier acquired Verizon wireline assets in Florida, Texas and California but experienced a bumpy transition that’s still getting attention from state regulators and politicians (see 1610130059). In a research note Wednesday, Wells Fargo analysts said they downgraded Frontier to “market perform” from “outperform” because of “continued weakness in revenue in newly acquired markets,” sequentially weaker broadband adds despite commentary that there would be improvement, and still high integration costs. For Q3, Frontier reported $2.52 billion revenue and $999 million adjusted EBITDA, which was lower than Wells Fargo projections of $2.58 million and $1 billion, respectively, the analysts said. Frontier reported 99,000 broadband net losses in the quarter, which was worse than the analysts’ predicted loss of 50,000 as well as Frontier’s Q2 loss of 77,200 customers, they said. “While management noted that they had seen some improvement in October, they seemed hesitant to guide toward significant Q4 improvement.” In a news release announcing Q3 results, Frontier CEO Dan McCarthy said, “We are on course to improve our revenue performance, principally by returning to normal customer trends in the [California, Texas and Florida] market over the coming quarters.” Frontier stock sank 13.74 percent to $3.39 in Wednesday trading.

The FCC set a pleading cycle on AT&T's forbearance petition for relief from certain intercarrier compensation tariffing duties pursuant to the Communications Act (see 1610020048). Comments are due Dec. 2, replies Dec. 19 on the telco's request the commission forbear "from the tariffing requirements of the Act and its rules as to all tandem switching and tandem-switched transport charges on all traffic to or from [incumbent local exchange carriers (LECs)] engaged in access stimulation,” said a public notice Wednesday in docket 16-363 that cited language from AT&T's petition. "The petition also asks that the Commission forbear from enforcing 'all of its rules that allow LECs to tariff a charge billed to [interexchange carriers (IXCs)] for toll-free database queries.' Finally, the petition also urges the Commission to 'promptly issue new rules to address the remaining inefficiencies and arbitrage activities in its hybrid intercarrier compensation system.'”

Comments are due Dec. 27 to the FCC under the Paperwork Reduction Act on its request seeking Office of Management and Budget approval for a revision of a previously approved collection of information, said a notice published Friday in the Federal Register. The information collection comes from a July tech transition order in which the FCC said applications seeking to discontinue legacy TDM-based voice service in order to migrate to IP, wireless or other technologies "must demonstrate that an adequate replacement for the legacy service exists in order to be eligible for streamlined treatment," said the notice, which cited various notification requirements imposed by the commission. The FCC estimated the revisions will result in a total of 1,775 annual burden hours at a total cost of $27,900, the notice said.

The executive branch's "Team Telecom" asked the FCC to defer action on OHCP Northeastern Fiber Buyer's planned buy of Sovernet, Sovernet Fiber, Ion Holdco and National Mobile Communications from ATN International's Sovernet Holding Corp. (see 1609280044). "The Agencies currently are reviewing this matter for any national security, law enforcement, and public safety issues but have not yet completed that effort," said a DOJ filing -- backed by the departments of Defense and Homeland Security -- posted Wednesday in FCC docket 16-266.

FCC staff fined Simple Network $100,000 for not registering with the commission, which allowed the company to avoid paying into federal funding programs such as USF despite providing interstate telecom services. In response to a May 4, 2015, notice of apparent liability, Simple Network argued the Enforcement Bureau "did not adequately justify and explain the nature of the violation or the proposed penalty against the Company," said a bureau order Wednesday in File No. EB-IHD-13-00011486. "We disagree. After reviewing Simple Network’s response to the NAL, we find no reason to cancel, withdraw, or reduce the proposed penalty." The order said Simple Network's failure to register was "both willful and repeated, despite the Company's arguments to the contrary." In addition, it said, "notably, the Commission recently fined the Company $5 million for 'deceptively marketing its prepaid telephone calling cards'" (see 1510210053). Simple Network didn't comment Wednesday.

FCC staff posted USF budget control mechanism calculations affecting rural telcos in the first half of 2017 under a rate-of-return overhaul order issued in March. The mechanism is intended to maintain a $2 billion annual budget for rate-of-return carriers, said a Wireline Bureau public notice in docket 10-90 listed in Wednesday's Daily Digest. Representatives of NTCA, ITTA, WTA and USTelecom voiced concerns about the potential impact of budget controls on carriers' ability to meet reform goals under the order, said an NTCA filing posted Wednesday on a meeting Monday with bureau officials. They voiced concerns about (1) whether those sticking with revised "nonmodel" support would be able to deliver stand-alone broadband service at "reasonably comparable" rates or meet buildout obligations, and (2) whether those opting into new model-based support "would be able to achieve more aggressive buildout obligations (or even obtain such support at all) in the event of 'oversubscription' in the election process." NTCA expressed much interest in working "promptly" with the FCC to avoid a scenario in which "a lack of sufficient support could undermine the ability of carriers on both paths to carry out the mission of universal service, deter investment, and/or compel much higher prices" for rural broadband consumers. In a filing on a phone call with an aide to Chairman Tom Wheeler, NTCA called for "action immediately after November 1, 2016, with respect to the sorting of model elections and resolutions of any budget concerns that may arise should such elections result in 'oversubscription' for the model."

New York state officials urged the FCC to approve their request for expedited waiver of Connect America Fund requirements that Phase II broadband subsidy support in the state be awarded through competitive bidding. Empire State Development Corp. is seeking a waiver that would allow it to tap federal CAF II support, declined by Verizon in New York, to help fund the state's own reverse auction of broadband subsidies for the same areas targeted by the FCC auction (see 1610130047). That "would align the federal and state broadband funding processes in New York, which would ensure the rapid deployment of broadband services in many unserved communities," said an ESD filing posted Wednesday in FCC docket 10-90 on a meeting with an aide to Commissioner Mignon Clyburn. "Many of the affected New York communities are in low-income and tribal areas that would not receive broadband services for some time absent the waiver." The ESD officials made similar arguments to an aide to Commissioner Jessica Rosenworcel. "Conducting two auctions in the same territories would raise a host of challenges, including potential funding of duplicative broadband networks and disparate federal-state funding requirements," said another filing. "Grant of the Petition would resolve these challenges through a simple process by which carriers in New York receive funding from the Connect America Fund in coordination with the State’s broadband program." In comments this week in the docket, ViaSat and the Wireless Internet Service Providers Association opposed the ESD petition; Verizon and numerous smaller telcos supported it; and the Pennsylvania Public Utility Commission asked the federal commission to expand any waiver relief to Pennsylvania and other states that have state broadband deployment programs.

The FCC rejected a SureWest Telephone appeal of a Wireline Bureau decision denying its request for a waiver of a state certification deadline under the commission's rules. A 2011 USF order requires states annually to certify that eligible telecom carriers (ETCs) receiving federal high-cost subsidies are using that support for the deployment and operational purposes for which it's intended. SureWest wasn't included in an ETC certification list filed by the California Public Utilities Commission Sept. 28, 2012. "SureWest claims it was confused due to changes in the certification requirements for high-cost support and the fact that its high-cost support status changed after being acquired by a price cap carrier," said a commission order Wednesday in docket 08-71. When the telco later filed for certification and asked for an FCC waiver of the deadline, the bureau denied the request, "finding that SureWest’s 'mere confusion' regarding the Commission’s rules was not sufficient to establish good cause for waiver," the order said. The company filed an application for review on grounds the bureau failed to address material facts, but the commission Wednesday concluded the company "failed to establish any basis" for overturning the decision. In a concurring statement, Commissioner Ajit Pai agreed SureWest violated rules and wasn't entitled to a waiver due to a simple mistake. But the commission's decision to withhold $2.9 million in interstate common line support "for this minor filing error -- as we are required to do under our rules -- is exceedingly harsh," he said, urging the agency to re-examine its rules and penalties.