The FCC Enforcement Bureau reached a consent decree with inContact to resolve an investigation into whether the company failed to complete long-distance calls to a consumer in rural Minnesota. "Rural call completion problems have significant and immediate public interest ramifications," said the Monday bureau order. "To settle this matter, inContact admits that it failed to ensure that its intermediate providers were performing adequately in delivering service to the rural consumer and that it failed to cooperate with the Commission’s investigation of this problem. [I]nContact will implement a compliance plan to prevent recurrence of these violations and will pay a $100,000 civil penalty."

The FCC teed up an application from Mix Networks to obtain phone numbers directly from numbering administrators under the commission's new rules for interconnected VoIP providers, which took effect in February (see 1602050021). Comments on the Mix application are due May 20, said a public notice in docket 16-108 listed in Friday's Daily Digest. The Wireline Bureau recently approved a Vonage VoIP application for phone numbers (see 1603310050).

The FCC special access push creates "potential headwinds" for some telcos, said Wells Fargo analyst Jennifer Fritzsche, citing the proceeding as one reason for her downgrade of CenturyLink to "market perform" this week. She said CenturyLink "could see an impact (+$2B access revenue)" from possible FCC regulatory changes, given the "very high margin" in the last-mile portion of special access (business data service). "If the FCC sides with the likes of [Level 3], Sprint, and now [Verizon], it is hard not to see this revenue and margin facing a bit of a squeeze," she wrote in a note Tuesday. Updating her views Wednesday after the company's earnings call, Fritzsche said management acknowledged special access is "high margin" with little to no maintenance costs. "While we acknowledge there are still many unknowns here, there is no doubt this is becoming a part of the regulatory focus for investors and could serve as a near term overhang on those names with special access revenue exposure," she wrote, calling CenturyLink's earnings (here) "in line" with expectations accompanied by "solid" free cash flow generation, but with "cautious" 2016 guidance. Cincinnati Bell (here), Cogent Communications (here), Consolidated Communications (here), FairPoint Communications (here), Frontier Communications (here) and Windstream (here) also reported quarterly earnings this week.

The FCC Enforcement Bureau denied EarthLink's claims in a complaint it filed against SBC Communications and SBC Advanced Solutions Inc. (SBC-ASI). "The Complaint alleges that SBC and SBC-ASI illegally subsidized their retail Internet access service with profits earned from the sale of their wholesale asynchronous digital subscriber line (ADSL) transport service in violation of Sections 201(b) and 202(a) of the [Communications] Act, Section 64.901 of the Commission’s rules, and the Commission’s Computer III requirements," said the order issued Wednesday in docket 14-207. The bureau found EarthLink's claims were "without merit" for various reasons it explained in the order.

Scores of rural telcos challenged FCC data that indicated competitors provide qualified broadband/voice service in certain census blocks, while some cable companies updated data on their rival offerings. Certain levels of unsubsidized competitive service in an area render the RLECs ineligible for high-cost support under the commission's new optional model-based rate-of-return USF mechanism (see 1603300065). In a filing in docket 10-90, TDS Telecommunications, a large rural telco, challenged Clearnetworx's Form 477 submission that indicates it serves 62 census blocks in the territory of TDS subsidiary Delta County Tele-Comm. "Clearnetworx's own coverage map and statements from its customer service representative ... reveals that they do not offer voice or broadband service in those census blocks. Given there are no other unsubsidized competitors offering the required service, these census blocks should be treated as unserved by an unsubsidized competitor" and thus eligible for model-based Connect America Fund support, TDS said. Some of the other RLECs submitted statements from competitors confirming they didn't provide qualified service in census blocks listed as served under the cost model. But updating its data, Time Warner Cable said it was providing qualified broadband service for the first time in about 9,564 census blocks. "Because these census blocks are 'served' by TWC, rate of return carriers should not be eligible to receive model-based support in those blocks," it said. Cox Communications said it identified an additional 1,048 census blocks with competitive coverage. Co-Mo Comm submitted a list of 847 census blocks where it was deploying fiber-based broadband service. The competitor said it "has reason to believe that some or all" of the census blocks are in rate-of-return study areas in the latest cost model, and should be removed from CAF eligibility. Thursday was the filing deadline for filing challenges or updates.

Level 3 Q1 free cash flow rose to $213 million, from $42 million in the year-ago quarter, as revenue and net income were relatively stable, the company said Wednesday. Total revenue rose about 1 percent to $2.05 billion, excluding results from a deconsolidated Venezuelan subsidiary's operations. Net income rose about 1.6 percent to $124 million. Guidance for expected 2016 adjusted EBITDA was slightly raised from 9-12 percent growth to 10-12 percent growth year over year. "Level 3's first quarter results demonstrate the benefit of our emphasis on profitable growth, as evident in our expanding margins and strong Free Cash Flow during the quarter," CEO Jeff Storey said in an earnings release.

The FCC Wireline Bureau denied requests by scores of school districts for waivers of an invoice filing deadline under the E-rate USF program. "The rules allow billed entities and service providers to seek and automatically receive a one-time extension of the invoicing deadlines, provided that the extension request is made in advance of the initial invoicing deadline," said a bureau order listed in Tuesday's Daily Digest in docket 02-6. "None of the petitioners timely sought such an extension, and none present evidence that would justify waiving the requirement that invoice extension requests be filed before the invoicing deadline." Many petitioners cited "employee confusion, lack of understanding of the program rules, staff turnover, or no reason at all for not timely seeking an extension," it said, saying such reasons don't constitute "extraordinary circumstances."

AT&T said it's offering affordable wireline Internet access to low-income households in its 21 wireline states, under an "Access from AT&T" program that grew out of an FCC transaction condition. Qualifying households can obtain the fastest of three speed tiers -- 10 Mbps, 5 Mbps or 3 Mbps -- available at their address, with 5-10 Mbps costing $10 per month, and 3 Mbps costing $5 per month, the telco said in a release Friday. AT&T will waive installation and Internet equipment fees but additional taxes and fees may apply to households, which must have a least one resident participating in the U.S. Department of Agriculture Supplemental Nutrition Assistance Program. Participants for the next month will have a monthly data allowance of 150 GB or 250 GB, depending on the specific service, but starting on May 23, the monthly allowances will be 150 GB, 300 GB or 600 GB, with overage charges of $10 for each extra 50 GB (or part thereof) used. Access from AT&T (further here) will be available through April 2020. An AT&T Digital You portal provides additional resources for users. As one of several conditions for approving AT&T's purchase of DirecTV (see 1507280043), the FCC adopted an order July 24 that required AT&T to begin a program within nine months to substantially increase broadband adoption among low-income households in its wireline footprint. AT&T is to do outreach efforts to low-income people, including through $15 million in public service announcements and coordination with school and community-based groups. Commissioner Mignon Clyburn, who pushed for the deal condition, emailed us the following response: “Our noble goal of connecting communities with affordable broadband alternatives, will ultimately be realized through targeted and innovative initiatives, both public and private. This is why I am pleased to witness the launch of Access from AT&T, an affordable broadband option. ... I look forward to seeing how this program helps to close the opportunity divide by getting more consumers and communities connected to high speed Internet services.”

Facebook became the latest Internet edge heavyweight to join Incompas, the trade group said Thursday in a release. Other recent additions include Amazon, Google Fiber, Netflix, Rocket Fiber, TiVo, T-Mobile and Twitter.

The FCC gave CenturyLink a waiver to consolidate its ILECs in states where it has multiple incumbent telcos, to reduce the number of regulated "study areas" in a state. "This waiver permits CenturyLink to consolidate its ILECs and allow its switched access rates and Eligible Recovery to be consolidated and calculated on the basis of the surviving Study Area in a state," said a Wireline Bureau order Wednesday in docket 15-324. "CenturyLink’s requested relief is in keeping with Commission precedent, and utilizes a methodology that is in the public interest and will benefit CenturyLink’s customers as well as the company. We also find that the requested relief will help facilitate the Commission’s goal of transitioning price cap carriers to the bill-and-keep regulatory regime."