The FCC teed up a petition by Interstate Telecommunications Cooperative and Qwest (CenturyLink) for a waiver of the "study area" definition to transfer a piece of a South Dakota exchange between them. Comments are due March 30, replies April 14, said a Wireline Bureau public notice Monday in docket 96-45. The waiver would permit Qwest/CenturyLink to shift a portion of its Flandreau exchange from its study area to ITC's study area, the companies said in their November petition. The change wouldn't involve a transfer of any facilities or customers, they said; the territory in question has no current active subscriber lines, one requesting subscriber line, and no non-active subscriber locations.

Inmate Calling Solutions opposed inmate calling service rule changes sought by Michael Hamden, a lawyer in Chapel Hill, North Carolina, who has advocated for the ICS rights of inmates and their families. In a petition for partial reconsideration of a 2015 order, Hamden had asked the FCC to ban ICS provider site commission payments to correctional authorities and allow a modest, capped administrative cost recovery fee as an offset (see 1601200053). ICSolutions said the FCC at a minimum should deny the request to include a prohibition or cap on site commissions. "Any rule attempting to cap or prohibit commissions would not only be ineffective and raise multiple constitutional questions, but it would also be in excess of the FCC’s statutory authority and, therefore, unlawful," ICSolutions said in a filing Friday in docket 12-375. "The FCC does not have the statutory authority to dictate how providers of inmate telephone services ('ITS') use their profits and, therefore, cannot prohibit or otherwise cap ITS providers’ payment of commissions to facilities." ICSolutions said certain clarifications of FCC terms and rules Hamden sought were unnecessary, but it said it didn't oppose them.

The FCC and others opposed an Oklahoma bid to stay inmate calling service (ICS) rules set by the commission capping intrastate rates (see 1602230034). The FCC said Oklahoma officials missed a federal court deadline for stay motions, and hadn't even sought an administrative stay from the commission itself, as the agency said federal appellate procedures generally require. “There is no cause to excuse Oklahoma’s refusal to comply with the obligations set forth by this Court and the Federal rules,” the FCC said Friday in its opposition filing to the U.S. Court of Appeals for the D.C. Circuit, which is reviewing the consolidated case (Global Tel*Link v. FCC, No. 15-1461). The FCC said ICS providers filed stay requests at the FCC, which were denied (see 1601220040), and with the D.C. Circuit, which set a Feb. 5 deadline for any further such requests (see 1602040023); but the Oklahoma officials didn't file their stay request until Feb. 22. Even if the D.C. Circuit considers the Oklahoma stay request, the FCC said the court should deny it because the state was unlikely to succeed on the merits of its underlying challenge, hadn't shown it would suffer irreparable harm absent a stay, and a stay would harm third parties and the public interest. The FCC said it didn't intrude on state authority by capping intrastate rates, but simply implemented sections 276 and 201 of the federal Communications Act to ensure that compensation for interstate and intrastate ICS is fair. The FCC was backed in opposing the Oklahoma stay motion by a filing from the Martha Wright Petitioners, which includes numerous groups and individuals advocating for the ICS rights of inmates and their families. They said it was “implausible that Oklahoma was not aware of the FCC Order in time to have filed a timely motion for stay with the agency.” Meanwhile, the states of Arkansas, Arizona, Kansas, Indiana, Louisiana, Missouri, Nevada and Wisconsin as well as Indiana sheriffs’ groups filed motions (here and here) seeking to intervene on behalf of Oklahoma.

The FCC is ready to authorize $37,696 for New Lisbon Broadband and Communications to carry out a rural broadband experiment in seven census blocks of Indiana, the Wireline Bureau announced in a public notice Wednesday in docket 10-90. To be authorized, "New Lisbon must submit at least one acceptable irrevocable stand-by letter of credit and Bankruptcy Code opinion letter" by March 7, the PN said. New Lisbon was given an extension until March 5 to submit proof that it's an eligible telecom carrier in the areas targeted for funding.

AT&T urged a U.S. bankruptcy court to lift an automatic stay covering Great Lakes Comnet that blocks federal and state appellate court consideration of regulatory litigation affecting both companies (see 1602040034). AT&T filed a motion Feb. 19 asking the U.S. Bankruptcy Court for the Western District of Michigan to declare an automatic stay provision inapplicable or to grant other relief so that the appellate litigation can be concluded, AT&T told the U.S. Court of Appeals for the D.C. Circuit Wednesday in a filing in the case (Great Lakes Comnet v. FCC, No. 15-1064), which included its motion. The D.C. Circuit is reviewing a GLC challenge to an FCC order that sided with AT&T in an intercarrier compensation dispute between the companies. In that order, the FCC found that GLC is a CLEC and that its tariffed rates violated a CLEC benchmark rule. AT&T separately is appealing a contrary Michigan Public Service Commission decision that found GLC isn't a CLEC subject to the FCC switched access rate limits. “The requested relief should be granted, and the parties should be permitted to litigate the pending appeals and regulatory proceedings to a final conclusion regarding a determination of what liability and what tariff rates apply under the FCC rules to the access services provided by the Debtor [GLC],” AT&T said in its bankruptcy court motion. “As the Fifth Circuit recognized in virtually identical circumstances, the adjudication of this type of dispute clearly falls within the purview of federal and state regulatory powers and will result only in a determination of liability under the federal regulatory scheme relating to access services,” the telco said, referring to a 2012 Halo Wireless decision. GLC had no comment Thursday.

CenturyLink and Frontier Communications asked the FCC to allocate $176 million in interim USF support to price-cap incumbent telcos providing voice service in costly remote areas where they are no longer being subsidized. “This support would flow for a maximum of two years, and likely less,” the two ILECs said in a filing, posted Wednesday in docket 10-90, summarizing recent meetings with aides to all five commissioners and a senior Wireline Bureau official. The telcos said the support is needed to ensure voice service continuity “in extremely high-cost and other unfunded locations” of territories served by price-cap carriers in states where they accepted new Connect America Fund Phase II support. Those areas constitute about 6 percent of the census blocks carriers serve in those states, the telcos said. In those areas, they said, the incumbents aren't receiving either the CAF II broadband-oriented support or legacy USF phone support but still must continue to offer voice service under FCC rules. Carriers have complained of an unfunded mandate (see 1601220046). CenturyLink and Frontier noted that the FCC plans to deal with the costs to serve areas either through an interim CAF II subsidy reverse auction or a remote areas fund (RAF), neither of which has been set up. “In the interim, however, restoring the inevitable voice service disruptions in unfunded areas presents a significant universal service challenge. Price cap ILECs that accepted offers of model-based CAF Phase II support are obligated to use such support to deploy broadband to covered locations; they cannot shift these monies to support voice service in the unfunded areas,” said the two telcos, which noted the ILECs must invest “significant amounts” to provide broadband in areas where they accepted CAF II money. They said the proposed interim funding should be based on previous legacy "frozen support" for the unfunded areas, as determined by the cost model. It would last only until the end of the CAF II auction process and could be drawn from the $100 million per year budgeted for the RAF and a “tiny fraction of the existing CAF reserve amount” held by the Universal Service Administrative Co., they said.

NTCA “hopes” the forthcoming FCC policy statement that would adopt the Communications Security, Reliability and Interoperability Council’s (CSRIC) 2015 report on recommendations for communications sector cybersecurity risk management “will capture and sustain this need for flexible voluntary collaboration among stakeholders with shared goals,” Senior Vice President-Policy Michael Romano said in a statement Tuesday. The FCC said Friday that it's circulating the policy statement, which would adopt the nine recommendations CSRIC made in its report on how the agency should encourage communications sector use of the National Institute of Standards and Technology's Cybersecurity Framework and other cybersecurity best practices (see 1602220052). NTCA hopes that “all parties will continue to focus in particular on the substantial need for upfront education so that small businesses can be better equipped to identify and respond to cybersecurity challenges,” Romano said.

Oklahoma officials asked a federal court to stay an FCC inmate calling service order, pending further judicial review of an underlying ICS challenge. The commission lacked the authority to cap intrastate ICS rates at levels that were below what the state negotiated and below provider costs, said Oklahoma Attorney General Scott Pruitt, Solicitor General Patrick Wyrick and Danny Honeycutt, general counsel of the Oklahoma County Sheriff's Office. They filed a motion Monday with the U.S. Court of Appeals for the D.C. Circuit in the consolidated case (Global Tel*Link v. FCC, No. 15-1461). The state officials said the FCC also lacked "relevant expertise" and disregarded evidence in writing a rule that not only was arbitrary and capricious but would harm Oklahoma's correctional facilities and inmates. The order will cause "dramatic" revenue reductions that force Oklahoma "to either abandon its inmate welfare programs, shift revenues away from other critical public safety programs, or eliminate inmate calling services if the State cannot satisfactorily renegotiate the contracts with its carriers," the officials said. Because Oklahoma is likely to win on the merits and would suffer irreparable harm, they said, the D.C. Circuit should stay the rule. The Oklahoma officials filed a separate motion asking the D.C. Circuit for leave to seek a stay, which came after the court's Feb. 5 deadline for such requests (see 1602040023). They said they originally had filed their legal challenge in the 10th Circuit, which didn't transfer the case to the D.C. Circuit until Feb. 16, at the FCC's request. "Oklahoma is the only party seeking a stay in this case that actually operates correctional facilities, has law enforcement interests, and receives rather than pays site commissions. Oklahoma thus has unique irreparable harms and a unique perspective on the public interest," the officials said. In an order Tuesday, the D.C. Circuit gave the FCC until noon, Friday to file a response to both Oklahoma motions. ICS providers CenturyLink, Global Tel*Link, Securus and Telmate also have sought stays, and recently filed reply briefs in support of their motions (see 1602190065), after the FCC and intervenors filed opposing briefs (see 1602120060).

A USTelecom bid for ILEC relief was backed by incumbents but opposed by rivals and a state regulatory commission, as six parties responded to an FCC request to refresh the record by Monday in a proceeding that started three years ago. CenturyLink, USTelecom and Verizon said the FCC should grant the ILEC group's December 2012 petition asking the FCC for a declaratory ruling that incumbent telcos are nondominant in the provision of switched access services. CenturyLink called the petition's factual foundation "indisputable," given the "remarkable transformation" in "the competitive landscape, whereby almost 50% of U.S. households are 'wireless only'" and traditional ILEC phone service is being eclipsed by interconnected VoIP. "The record overwhelmingly demonstrates that ILECs are not dominant carriers in the provision of voice services and, therefore, dominant carrier regulation of ILEC switched access services is unnecessary," CenturyLink commented in docket 13-3. "There is no question that some relief here is warranted, and declaring ILECs to be non-dominant would be the cleanest approach," USTelecom said. "We do not seek blanket deregulation of ILEC switched access voice services; rather, we seek a narrow scope of relief that would result in the consistent treatment of all providers in this highly competitive marketplace as 'non-dominant' providers." Verizon agreed, saying the petition "seeks only regulatory parity" among local phone competitors. But General Communications Inc., the Michigan Public Service Commission and Sprint opposed the petition. The FCC should deny the petition "as vague, unsupported, and inconsistent with precedent," GCI said. "To the extent it grants any relief, the Commission should ensure that it does nothing to backpedal on the reforms of the [2011] USF/ICC Transformation Order and the subsequent implementing orders or to prejudice ongoing proceedings or other carriers." The Michigan PSC said ILECs remain dominant in the provision of switched access services. "The data provided in the petition is outdated and not applicable to every area. Although wireless and broadband technologies continue to experience growth, not every customer currently has access to these options. ILEC carriers remain the most reliable, and in many cases the only option for customers in rural and underserved areas," the PSC said. Sprint said that all the reasons it listed for opposing the bid three years ago remain valid.

Frontier Communications' planned April 1 takeover of some Verizon assets is going well, and it's undertaking a "strategically significant initiative" to expand multichannel video services, CEO Dan McCarthy said on a Q4 2015 investor call Tuesday. He said Frontier is in the "final stages" of its plans for converting the Verizon wireline systems in California, Florida and Texas. "All indications are very positive with less than 40 days to the scheduled cutover," he said. McCarthy is optimistic Frontier will avoid the transition problems it experienced when it took over AT&T's systems in Connecticut for two main reasons: This time, Frontier is adopting all the Verizon bundles and products in the three states rather than trying to convert its local pricing and marketing to "Frontier-like" structures from the get-go; it also scheduled the customer "cutovers" to happen in phases rather than all in one day. Frontier believes the deal will create $600 million in cost-reduction "synergies" on day one. McCarthy said Frontier launched its new pay-TV campaign in Durham, North Carolina, as it plans to upgrade video capabilities in 3 million households in 40 markets over three to four years, extending its video service to about half of its existing 8.5 million households. The video expansion's cost is just $150 million and has "low capital intensity" due to compression technology that allows Frontier to allocate bandwidth efficiently. He said the company already is seeing market gains in Durham because it can now offer bundled products to apartment and condo complexes that previously were uninterested. He said the closing of the Verizon deal will improve the company's product mix, reducing the company's exposure to voice revenue declines. Frontier had Q4 broadband net adds of 28,530, and plans to connect or upgrade 100,000 households to broadband under the FCC Connect America Fund subsidy program in 2016, said a company presentation. Frontier Q4 revenue rose 6.2 percent to $1.41 billion from the year-ago quarter and operating income of $182 million was up 5.2 percent. It had a net loss of $103 million, as it incurred interest and integration costs related to the Verizon deal, versus a year-ago $14 million profit, said a company release. "Solid report from [Frontier] as results were in line across the board," Wells Fargo analyst Jennifer Fritzsche wrote investors. Frontier stock rose more than 12 percent to $5.08 at market close Tuesday.