CLECs continue to press the FCC to curb ILEC business data service prices and practices (see 1607220040), while a cable group asked for "light touch" regulation of new entrants. Level 3 sought rules to counter ILEC "lock-up plans," said a filing posted Thursday in docket 16-143 on the company's arguments to a Wireline Bureau official. To limit ILEC opportunities to use circuit-portability conditions to lock up BDS demand, the commission should bar incumbents "from setting the terms of circuit-specific plans in non-competitive areas at longer than two years," said Level 3, arguing customers should be allowed at the end of the term to pay the same price on a month-to-month basis. ILECs should be prohibited from imposing "terms for volume commitment plans in excess of one year in non-competitive areas," it said. Level 3 also asked the FCC to apply tariff filing duties to ILEC commercial agreements for provisioning circuit-based and packet-based dedicated services "in non-competitive areas." It said some ILECs weren't filing agreements, preventing efforts to uncover unreasonable discrimination. Level 3 asked the agency to prevent market power abuse by prohibiting ILECs from "tying" BDS sales "in non-competitive markets to the sales of other products." It also urged the FCC to ensure protections adopted this spring and recommended in the filing take effect as soon as possible, including a "fresh look" proposal to give customers new rights to avoid volume shortfall penalties and early termination fees. Separately, Level 3's counsel told Wireline Bureau Chief Matt DelNero that BDS regulation would be more effective "if it includes price caps and tariffs." An FCC Further NPRM sought comment on eliminating BDS tariffs (see 1604280057). Level 3 would support a benchmark pricing regime to constrain BDS prices "in non-competitive areas," but a collective effort to develop such a proposal has so far been unsuccessful, it said, calling price-cap regulation and tariffs "far superior" to available benchmark options. Other CLECs this week also summarized BDS-related discussions: Windstream focused on its proposals for overseeing "wholesale Ethernet last-mile inputs"; Granite Telecommunications cited concerns about the FCC's decision to link a wholesale voice platform's termination to the issuance of new BDS rules; and U.S. TelePacific discussed a bureau decision suspending AT&T tariff filings (see 1607150062). The American Cable Association and members urged an aide to Commissioner Mignon Clyburn "to continue the FCC’s traditional light touch approach to regulating competitive providers." They said small cable operators invested more than $300 million annually to deploy BDS facilities, but cable BDS rate regulation "would create significant disincentives" to invest and could hamstring smaller providers in particular.

The DOJ, backed by the Defense and Homeland Security departments, asked the FCC to defer action on a proposed transaction involving Oxford Networks Holdings and OHCP Northeastern Fiber Buyer. "The Agencies are currently reviewing this matter for any national security, law enforcement, and public safety issues, but have not yet completed that effort," said a DOJ letter Tuesday in docket 16-222. It asked the FCC to "defer action until such time as the Agencies notify the Commission of the completion of their review and, based on the results of such review, request appropriate action by the Commission. The Agencies will advise the Commission promptly upon completion of our review."

CenturyLink said the FCC's inmate calling service rate caps still would be too low even if it increases them as proposed in a draft order tentatively scheduled for an Aug. 4 vote (see 1607140087). CenturyLink officials discussed a fact sheet on the draft order on reconsideration with an aide to Commissioner Ajit Pai, said a filing posted Wednesday in docket 12-375. "CenturyLink noted that it recognizes the value of inmate calling in keeping families connected and has supported reasonable reform efforts to benefit consumers. However, it explained that the Fact Sheet’s rate cap for prisons remains unrealistic when compared with the demonstrated costs of providing service at some institutions, even without applying commissions required by the state," said the telco's filing. Network Communications International Corp. said it disagreed with a recent filing by Michael Hamden, a criminal defense attorney whose petition for reconsideration the FCC has cited in proposing its latest order. Hamden said creating a "discrete, interim facility cost-recovery mechanism at a modest increase in per-minute calling rates ... can work, but only if all other payments to correctional facilities are prohibited," particularly site commissions (see 1607250027). "NCIC fully supports the Commission’s decisions to cap interstate and intrastate per minute inmate calling rates, as well as ancillary fees. Those decisions appropriately constrain ICS rates; thus, the Commission should reject Mr. Hamden’s proposal to prohibit or limit site commission payments," said an NCIC letter. It said Hamden's rationale for such a ban is misguided because he "mistakenly identifies site commissions as the 'underlying cause of dysfunction' in the ICS market when they are actually the product of an unregulated environment that permitted high rates and fees." NCIC said site commissions will decrease once the order goes into effect (the 2015 rate caps have been stayed in court pending further judicial review of challenges on the merits). It also said: Hamden's cost-recovery proposal doesn't work for all facilities; lower rates will lead to higher call volume and higher facility costs; if site commissions are curbed, ICS providers will find other ways to offer incentives to facilities; and regulating site commissions, which NCIC believes the FCC lacks authority to do, would jeopardize other reforms.

FCC staff released new comments from two peer reviewers of a white paper by commission consultant Marc Rysman on the business data service market, which the agency cited in its Further NPRM proposing a new BDS regulatory framework. The comments came in response to updated cable BDS data and associated FCC and Rysman analyses released recently indicating no basic changes (see 1606290045 and 1607080052). They were contained in a Wireline Bureau filing in docket 16-143, the cover letter for which was posted in the Daily Digest Tuesday. Tommaso Valletti, a professor of economics at Imperial College in London, said the recent updates didn't produce any material change to his previous estimates on the effects of facilities-based BDS competition. Andrew Sweeting, an associate professor at the University of Maryland, said he "like[d] the fact that the FCC staff have included new measures of cable presence" in the new analysis. "One might have argued that these connections could provide some substitute competition to the type of 'facilities based building measure' that was included in the previous regressions, especially as it seems that this often reflects actual connections rather than the ability to easily provide a connection." But he said the new results were "a little hard to interpret" and said he didn't have "any clear basis to disagree" with a staff assessment that certain large price effects "are likely to be picking up something" other than what he had postulated in his original peer review. "A simple analysis of summary statistics (whether in terms of demographics, business density, types of customers, and factors that might affect costs of service) might be useful to understand what is going on here," he wrote.

The FCC Wireline Bureau finalized broadband coverage data for a cost model in a new USF mechanism that rate-of-return telcos can opt into to receive Connect America Fund support pursuant to a commission March 31 overhaul (see 1603300065). The bureau concluded a streamlined challenge process for the voluntary Alternative Connect America Cost Model (A-CAM), said an order in docket 10-90 listed in Tuesday's Daily Digest. "The Bureau is making the necessary adjustments in A-CAM in order to make final calculations of the offer of model-based support to rate-of-return carriers and will shortly release the Public Notice summarizing offer amounts and associated deployment obligations, which will trigger the 90-day deadline for carriers to indicate their intent to elect model-based support," the order said. "In this proceeding we received 146 comments, containing 273 requests to change reported A-CAM coverage data. Following our review of each filing on its merits, today we grant 80 requests and deny 73 requests. We decline to act on 124 requests that request changes that are administratively infeasible or unnecessary to make. We modify the A-CAM coverage data in the model accordingly, as described more fully" in the rest of the order. The disposition of each request is listed in an appendix.

An FCC draft order to raise inmate calling service rate caps doesn't seem to address a key problem, said the criminal defense attorney whose petition for reconsideration the commission cited in proposing the item tentatively scheduled for an Aug. 4 vote (see 1607140087). The FCC's fact sheet appears "to suggest that the Commission is contemplating an increase in 'proposed rate caps to account for costs facilities incur in offering ICS,' but without prohibiting or limiting the payment of site commission payments," said Michael Hamden, of Chapel Hill, North Carolina, in a letter posted Monday in docket 12-375. "Such an approach would increase ICS calling rates previously determined to be 'just, reasonable, and fair,' without addressing the underlying cause of dysfunction in the ICS market that has resulted in the exploitation of prisoners and their families for decades." Hamden recently said he was "encouraged" by the FCC's move (see 1607180059). Although the FCC is right to reconsider a 2015 order that set rate caps, he said, "lasting reform cannot be achieved without the prohibition or strict limitation on site commission payments" to correctional authorities. "Modifying the Order to designate a discrete, interim facility cost-recovery mechanism at a modest increase in per-minute calling rates (say, $0.01 to $0.04 per minute, depending on facility size) can work, but only if all other payments to correctional facilities are prohibited," he wrote. "Under such an approach, the interim rate would be set pending substantive review of a meaningful data collection process to determine the actual, legitimate expense of providing ICS services. However, all other payments to facilities and correctional authorities, including 'site commissions,' in-kind payments, and all forms of the payment of value for the provision of ICS, must be prohibited." The FCC didn't comment Monday.

The FCC Enforcement Bureau admonished Momentum Telecom for not making full and timely contributions to the USF for more than a year. That failure deprived the USF of funds and gave Momentum an advantage over competitors that made timely contributions, said a bureau order Friday in File No.: EB-IHD-15-00018669. The bureau said that starting in September 2013, Momentum failed to make full and timely USF contributions, owing over $100,000 in August 2014, before fully erasing its arrears in October 2015. "An admonishment is appropriate in this case because the relevant statute of limitations has expired for all but a de minimis amount of the USF debt at issue. Nevertheless, Momentum’s habitual late payments to the USF must still be sanctioned," it said. Momentum said the $100,000 debt was due to a single missed invoice and notes it wasn't placed on "red light" status or had its case referred to the U.S. Treasury for debt collection, the order said. The bureau believes the size and duration of the debt warrant some enforcement action, but it didn't issue a fine despite some consideration. Momentum didn't comment Friday.

FCC staff is prepared to fund five rural broadband experiments by Big Bend Telecom in Texas. The Wireline Bureau is ready to authorize Universal Service Administrative Co. to disburse $178,425 for BBT broadband deployment in 15 census blocks, said a public notice Thursday in docket 10-90. The PN said BBT must submit at least one acceptable, irrevocable standby letter of credit and Bankruptcy Code opinion letter by Aug. 4 to be authorized.

Correction: Comments were due Thursday, July 21, on an FCC Further NPRM proposing a Connect America Fund Phase II reverse auction of broadband-oriented subsidy support (see 1607200042 and 1607190040).

Verizon will assess a maintenance fee monthly to Fios customers with “outdated” broadband routers, the company said in a post on its support forum Wednesday. The telco ISP started notifying customers by email and direct mail July 18 and will continue to send notices until Aug. 29, it said. Most Fios customers have newer routers with higher wired and wireless speeds, and won’t be affected, the company said. “We’re asking customers using older generation routers to upgrade to one of our current models … If they choose not to upgrade, notified customers will be assessed a $2.80 monthly fee to cover the rising costs of supporting the outdated devices.” Customers can avoid the charge by buying a refurbished third-generation Verizon router for $59 or the company’s new Quantum Gateway for $199.99 or $10 a month, Verizon said. The affected older routers are the Aciontec MI424WR Rev A, C, D, E and F, and the Westell 9100EM Rev A and C, Verizon said. “The routers in question are outdated and some have been in service for as long as ten years which is far older than many of the modern devices that now connect to them,” it said. “Our tech support centers have a much higher call-in rate for customers with the older routers resulting in higher costs to Verizon to keep these customers in service. The $2.80 fee will help recoup these higher support costs.”