Verizon urged the FCC to keep its current discontinuance process available for carriers if it creates a new process for discontinuing legacy telecom services to facilitate technology transitions. "We urged the Commission that any additional criteria it considers in the context of discontinuances related to technology transitions should be limited to the proposed streamlined process for discontinuing voice services. Providers should continue to have the option of using the existing process in all circumstances," said a Verizon filing Thursday in docket 13-5 on meetings with aides to Commissioners Mike O'Rielly and Mignon Clyburn. The telco also said the commission shouldn't require cybersecurity certifications as a condition for the streamlined track. Another recent Verizon filing elaborated: "As both the Chairman and the National Institute for Standards and Technology have recognized, a one-size-fits-all approach -- particularly one involving proscriptive regulations -- is not the best way to address cybersecurity concerns. Establishing cybersecurity guidance on a provider-by-provider or, where discontinuance applications cover a small geographic area, region-by-region basis is unworkable and inefficient." In that filing, Verizon said AT&T's proposal for a 2025 sunset date for an interoperability criterion is too far in the future.

The FCC will implement a rate-of-return USF budget-control mechanism in September, said a Wireline Bureau public notice in docket 10-90 listed in Thursday's Daily Digest. The mechanism, established under a March rural broadband overhaul order, is intended to keep rate-of-return USF spending at $2 billion, at least until a planned cost-model option takes effect. "Going forward the target amount will be calculated for each mechanism each year prior to the annual filing of access tariffs, but that was not possible in this initial year of implementation" because "these calculations were just recently announced," the PN said. NTCA Senior Vice President Mike Romano, who recently voiced concern about a previously planned July 1 implementation date (see 1606170058), said his group appreciates the commission's willingness to set a "more reasonable" timetable. He said the new September date is consistent with a rule calling for two months' notice to carriers. Romano noted the rural high-cost fund isn't indexed for inflation, unlike some other USF programs.

The Human Rights Defense Center asked why Global Tel*Link is seeking a waiver to FCC inmate calling service rule changes that it already has implemented. The HRDC noted a GTL release Monday that said it "completed implementation of rate and fee changes" under the rules that took effect the same day, and commended its law enforcement and correctional facility customers for helping to ensure compliance. "This document begs the question of why GTL has expended so much in the way of public and private resources in pursuing what is clearly an unnecessary waiver request and why they haven’t moved to withdraw the petition," said an HRDC filing Wednesday in docket 12-375. "If they have completed implementation of the FCC rates why are they seeking a waiver if not to be able to continue gouging the public and exploiting the poor as they have for decades?" GTL didn't comment Thursday. GTL's waiver petition asked the FCC for 90 extra days to implement two rules: 64.6080, barring providers from imposing per-call or per-connection charges on ICS consumers, and 64.6090, barring providers from offering flat-rate ICS calling. GTL said it needed more time to complete contract talks with its correctional facility customers and to seek relief at the state level on "intrastate ICS rate cap regimes that will result in confiscatory rates once the per-call surcharge or flat-rate calling component is removed."

The FCC asked Verizon and XO Holdings for more information on their planned deal, in which Verizon would take over XO Communications and its wireline assets. "We require additional information and clarification of certain matters discussed in the applications," said a Wireline Bureau letter to the companies posted Thursday in docket 16-70. The 25-page letter contained numerous and detailed instructions and queries on the applicants and their deal. For example, the bureau asked the companies to "provide all documents created by or for the Applicants (either internally or by outside providers) for the purpose of analyzing the effects of this Transaction with respect to: competition, diversity, consumer welfare, technology, cost savings, efficiencies, synergies, benefits, and profitability." It asked for much information on: the applicants' internet backbone and transit services and customers; interconnection agreements; the benefits of combining their offerings; and the full reach of their service footprints. Many of the questions focused on their business data services (BDS), a market in which the two companies compete in some areas. For instance, the bureau asked for a description of "Verizon's post-closing plans concerning XO's services provided via Ethernet over Copper." Critics are concerned Verizon/XO will undercut competition in the BDS and other markets. The bureau asked the companies to provide the information and associated documents by July 7. A Verizon spokesman said the request was part of the standard review process. “Nothing out of the ordinary and we’re glad the process continues to move forward,” he emailed. Josh Stager, policy counsel of New America's Open Technology Institute, emailed: "While some of this is due diligence, it does make clear that the FCC isn't going to rubber-stamp the merger. The Commission's requests are responsive to the concerns raised by many, including OTI, that the transaction will harm the markets for Internet transit and business data services." Phillip Berenbroick, Public Knowledge counsel-government affairs, emailed: "The nature of the questions regarding competitors and market share comports with what Public Knowledge and the other parties in the docket have consistently pointed out -- that Verizon and XO have been rather cavalier in explaining how this transaction serves the public interest and what effect the transaction will have on competition in the BDS market. We've also asserted that the competition issues raised by the Verizon/XO deal are compounded by the Verizon/Nextlink spectrum lease arrangement, and hope the Commission asks Verizon and Nextlink about those issues and considers these transactions jointly."

Alaska Communications made broadband commitments to try to meet FCC expectations for expanding deployment in its price-cap service areas under the Connect America Fund Phase II program, after doing further analysis and engaging in discussions with Wireline Bureau staff. "Alaska Communications will commit to making broadband available at 10/1 Mbps to a prescribed number of unserved locations within census blocks identified by the Commission as eligible, not to exceed 26,000 required locations, provided that up to 25 percent of the required number of locations may be unserved locations in partially-served census blocks, and up to ten percent of the required number of locations may be unserved locations in census blocks with model-based costs below the high-cost threshold but adjacent to eligible high-cost census blocks," the company said in a filing posted Tuesday in docket 10-90. It asked that the first build-out milestone be set at 20 percent by year-end 2020. Alaska Communications also asked the FCC to require that competitive eligible telecom carriers (CETCs) receiving CAF support state by year-end 2017 "where they intend to deploy broadband and what middle-mile facilities they will build or lease in order to deliver broadband coverage meeting the FCC’s minimum broadband standards." Such advanced notice of deployment plans "followed by annual reporting of facilities actually deployed, would significantly increase CETC accountability for the nearly $1 billion targeted to their service areas" under an Alaska Telephone Association proposal involving rate-of-return carriers, Alaska Communications said.

Comments are due July 21, replies Aug. 5 on the Connect America Fund auction the FCC is planning after a summary of a Further NPRM in docket 10-90 was published in Tuesday's Federal Register. The FCC approved the CAF Phase II auction FNPRM along with an order May 25 to provide $215 million in annual broadband-oriented support to unsubsidized rural areas traditionally served by larger telcos (see 1605250046). "The Commission seeks comment on three discrete sets of issues relating to the process for determining winning bidders: How to apply weights to the different levels of performance adopted in the Order above; measures to achieve the public interest objective of ensuring appropriate support for all of the states; and measures to achieve the public interest objective of expanding broadband on Tribal lands," said the summary.

Siding with Verizon, a court overturned a National Labor Relations Board pro-union ruling in a picketing dispute. A panel of the U.S. Court of Appeals for the D.C. Circuit ruled the NLRB didn't giving proper deference to an arbitration panel decision in favor of Verizon (Verizon New England v. NLRB, No. 15-1062). "The Board misapplied its highly deferential standard for reviewing arbitration decisions," wrote Judge Brett Kavanaugh in the controlling opinion. The International Brotherhood of Electrical Workers (IBEW), Local 2324, waived its right to picket under a collective bargaining agreement with Verizon, but in a subsequent dispute, employees displayed pro-union signs in cars parked on company property that could be seen by passers-by, Kavanaugh wrote. After Verizon ordered the employees to stop and the union resisted, the telco invoked a clause of the agreement and won an arbitration panel decision. The union took the matter to the NLRB, where an administrative law judge also ruled in favor of the telco. On appeal, the board ruled 2-1 to overturn the decision. The NLRB may review arbitration decisions "in certain circumstances when the losing party says it has been deprived of a right otherwise guaranteed by the National Labor Relations Act," wrote Kavanaugh, but such reviews are conducted under the "highly deferential" Spielberg-Olin standard. "Under that standard, the Board should have upheld the arbitration decision in this case. The Board acted unreasonably by overturning the arbitration decision. Therefore, we grant Verizon’s petition for review and deny the Board’s cross-application for enforcement," said Kavanaugh's opinion, which was accompanied by two other opinions. Judge Karen LeCraft Henderson joined with Kavanaugh on most of the opinion while concurring on two parts. She said she doubted Kavanaugh's description of the arbitration deferral standard. Judge Sri Srinivasan joined, concurred and dissented in part. He said he concurred with the court's explanation of the legal standards. "My sole (and narrow) disagreement with the court concerns the application of that deferential standard in the specific circumstances of this case. In my respectful view, the Board’s decision was not unreasonable in setting aside the arbitration decision," he wrote. Verizon emailed that it's "pleased not just because its position has been vindicated after 8 years of litigation, but also because the Court's decision emphasizes the obligation of the NLRB to defer to collective bargaining agreements and the use of the arbitration process to resolve disputes that arise from time to time under those agreements." The NLRB and IBEW didn't comment.

The FCC set a pleading cycle on the proposed sale of Inmate Calling Solutions from Centric Group to TKC Holdings. Comments are due July 1, replies July 8, said a public notice in docket 16-188 listed in Monday's Daily Digest. ICS is an institutional telecom services provider that has contracts in 38 states, the PN said.

The FCC teed up applications of Manhattan Telecommunications and Telnyx to obtain phone numbers directly from numbering resource administrators. Comments are due July 5 on the requests of both interconnected VoIP providers, said public notices (here and here) in dockets 16-134 and 16-172 listed in Monday's Daily Digest. The Wireline Bureau issued an order in docket 16-135 Wednesday granting AT&T direct phone numbering rights for interconnected VoIP service, becoming the third provider to win such authorization after Vonage and Mix Networks (see 1603310050 and 1606070011).

The FCC approved a National Exchange Carrier Association proposal to change the formula used to calculate USF high-cost loop support for "average schedule" rate-of-return telcos (see 1605160023). The new formula, which covers support from July 1 to Dec. 31, incorporates a reduction in the authorized rate of return from 11.25 percent to 11 percent, said a Wireline Bureau order in docket 05-337 listed in Monday's Daily Digest. That's the first 0.25 percentage point cut required by the FCC in its March rate-of-return USF broadband overhaul order driving the authorized rate of return down to 9.75 percent over six years (see 1603300065).