If Frontier's acquisition of Verizon's wireline services in California, Texas and Florida (see 1502050059) is approved before the start of 2016, it will use money allocated from the FCC through Phase II of the Connect America Fund to facilitate broadband deployment in high-cost areas of California and Texas that it will acquire, the company said in an FCC filing. Frontier told the commission in the filing it "has aggressively pursued federal and state broadband support in its current service areas, and will continue to do so in [Verizon's transferred] service areas." The company also said it plans to use about $32 million of CAF Phase II support annually through the next six years for broadband deployment in Verizon's high-cost service areas of California it's in the process of buying, and $16.5 million of CAF Phase II funds throughout the next six years to deploy "high speed broadband to around 37,000 locations in high cost areas" of Texas. "Although Frontier has not yet formulated detailed plans for enhancing broadband deployment and services in the transferring companies' service areas, it anticipates that it will start with the CAF Phase II projects, which would result in significant builds in both California and Texas," it said in the filing. The CAF Phase II projects also will improve its network speed and service, Frontier said, and will require an investment of "substantial amounts of its own capital, in addition to CAF Phase II funding" to complete the high-cost builds.

The FCC Wireline Bureau approved Crown Castle's buy of Sunesys units from Quanta Services, said a public notice released Monday in docket 15-123. No opposition was filed to the application of Crown Castle and Quanta to transfer control of the communications licenses of Sunesys LLC and Sunesys of Virginia Inc., from the latter to the former under Section 214 of the Communications Act. The Sunesys units provide point-to-point telecom services in California, Delaware, Florida, Georgia, Illinois, Maryland, New Jersey, Ohio, Pennsylvania and Virginia, according to the application, and Crown Castle owns, operates, leases and manages almost 40,000 wireless communications towers and rooftop sites, and has deployed "approximately 14,000 distributed antenna system ('DAS') small-cell nodes supported by 7,000 miles of fiber."

Frontier and Verizon responded Wednesday to the FCC request for more information concerning Frontier's proposed purchase of Verizon's wireline services in California, Florida and Texas. The companies submitted a joint reply to the several questions the commission posed in a June letter (see 1506180038) about the effects the purchase would have on particular aspects of each business. Frontier and Verizon said "there are no financial issues in the transaction that are expected or are likely to compromise Frontier's ability to maintain or improve its network and customer service quality beyond the ordinary market risks" of any business transaction. The letter said Frontier's acquisition of the wireline systems will "strengthen" their "already strong financial profile" so they might provide better services to customers, and give them more operating flexibility. In its information request, the commission asked for the details of the plan in place by the which the two companies will transition customers and back-office and billing systems. The telcos responded by citing the previous experience they have of transitioning customers and systems, including after their 2010 transaction moving wireline services in 14 states to Frontier. They said that a "cutover plan" is in place, which includes the testing of the data transfer and integration process. Prior to the information request, both companies said there would be a savings of $700 million in consolidated cost efficiencies, and in its request letter the FCC asked them to define exactly where the benefits would come from. The companies said in their response that $525 million would come from the elimination of Verizon corporate cost allocations, and the remaining $175 million in savings is based on the management of "other allocations and costs."

The FCC should immediately open a new video relay service (VRS) rulemaking sought by providers, Convo Communications said in a filing in docket 03-123. A Convo official told a staffer for FCC Chairman Tom Wheeler Tuesday it was urgent the commission issue an NPRM on "functional equivalency and rate stabilization" for VRS providers followed by expedited comment and decisionmaking. "As an emergent provider operating with increasing debt and no margin, Convo needs to soon understand the Commission's position related to the NPRM," Convo said. The FCC's Consumer and Governmental Affairs Bureau Tuesday adopted further planned rate cuts to VRS provider compensation for the funding year running from July 1, 2015, to June 30, 2016 (see 1506300063). Convo and other VRS providers said the cuts would damage the quality of their VRS services to the deaf and hard of hearing. The VRS providers in April proposed to make enhancements to their services in exchange for an FCC freeze before July 1 on their compensation rates, which have been on a "glide path" down since 2013. But the bureau said it couldn't alter in Tuesday's order the planned rate cuts adopted in a previous FCC order and would address the VRS provider's proposal separately.

Florida Power and Light says Verizon hasn't come close to proving its case in its pole-attachment complaint against the power company. In its opposition to the complaint in FCC docket 15-73, FPL said Verizon has had more than 40 years, two complaint filings, four economist declarations, four additional affidavits and thousands of pages of documents to make its arguments to demonstrate that it was paying too much for the right to use the "infrastructure that FPL designed, constructed and maintained for Verizon." The FCC should dismiss or deny the complaint, "given that the burden of proof was squarely on Verizon," FPL said. Saying the FCC dismissed Verizon's first complaint Feb. 11, FPL said Verizon's most recent complaint "inexcusably fails again to address the value of FPL having granted voluntary access" to its network of poles and easements. "The sum total of the benefits provided Verizon and the obligations borne by FPL for Verizon dwarf Verizon's claims of overpayment and, at the very least, establish that Verizon's annual payment of a joint use attachment fee of approximately $35 to $37 per pole is eminently just and reasonable," FPL said. After the first complaint was dismissed, Verizon refiled its complaint March 13 with supplemental information identified by the FCC Enforcement Bureau that the telco said further establishes its right to pay the same rates FPL charges other competitors. "This long-standing pole attachment dispute involves the continuing efforts of FPL to use a contractual evergreen clause to forever charge Verizon rental rates that are nearly four times the rates FPL may charge Verizon’s competitors -- even though Verizon terminated the parties’ forty-year-old Joint Use Agreement nearly three years ago after repeated attempts to resolve the rate issue with FPL proved futile," Verizon said. "In its February 11, 2015 Order, the Enforcement Bureau rejected the vast majority of FPL’s reasons for resisting Verizon’s ability to maintain pole attachments at the rates envisioned by the Commission’s Pole Attachment Order. In particular, the Bureau made clear that, since July 12, 2011, Verizon has been entitled to a just and reasonable rate from FPL for pole attachments."

The FCC is actively encouraging fiber deployment to boost broadband capabilities, spur competition and facilitate innovation, said Gigi Sohn, counselor to Chairman Tom Wheeler, in prepared remarks Tuesday at Fiber to the Home's Fiber on Fire conference in Anaheim. "Fiber networks lead to an influx of business, resources, jobs, and consequently, economic growth," she said. "On top of the economic benefits, broadband enhances health care, education, energy use, environmental protection, public safety, transportation, civic engagement, you name it." Sohn said that fiber-driven advances improve U.S. competitiveness overseas and broadband competition domestically. Citing many consumers' slow data speeds, she noted that the FCC increased the baseline speed for "broadband" from 4/1 Mbps to 25/3 Mbps. The agency is "working to help lift barriers to broadband deployment" by taking steps to foster wireless backhaul, better align the costs of using poles and conduits, and pre-empt state laws restricting community broadband, she said. Local and industry deployment efforts "are even more exciting," she said, and they often spark competitive responses. "If our efforts to lift barriers are not enough and if the efforts of communities across the country don’t reach far enough, rest assured, the FCC is taking more steps to incentivize fiber deployment. We need to make sure that all Americans will reap the benefits of fast broadband speeds." She cited the FCC decision to allocate $10 billion in USF support over six years to extend broadband in high-cost areas currently served by price-cap telcos; if the carriers decline funding in a state, others, including municipal systems and electric cooperatives, will be eligible for the funding, she noted. Sohn said the commission is promoting fiber deployment through the E-rate program subsidizing school and library communications.

AT&T and GTT Communications signed a long-term IP interconnection agreement, they said Tuesday in a joint news release. GTT CEO Rick Calder said the deal will give his clients additional capacity. GTT says its "global Tier1 IP network connects to any location in the world and with any application in the cloud." AT&T is trying to win Department of Justice and FCC approval of its planned takeover of DirecTV (see 1506290061), and Cogent and some others are pushing for an interconnection condition. AT&T had announced interconnection agreements with Cogent and Level 3. Separately Monday, AT&T and DirecTV said they might need longer to complete their transaction, amid the regulatory reviews (see 1506300052).

The FCC pushed back comment deadlines to the early fall in its telco special-access regulatory review so parties can review industry data that has been submitted to the agency but not yet released, a Wireline Bureau public notice said Wednesday. The deadline for initial comments on a further NPRM is now Sept. 25, and Oct. 16 for replies. The previous deadlines were July 1 and July 22. The FCC hasn't said when it will release the industry data. Special access covers services traditionally offered over ILEC higher-capacity DS1 and DS3 lines (24 and 672 voice-grade equivalents, respectively) connecting to businesses or providing interoffice transport. Competitors say they often need regulated wholesale access to the ILEC circuits to serve businesses or provide backhaul. The Bells and other ILECs say the market is increasingly competitive and regulation is not only unnecessary but counterproductive because it discourages investment in more-robust fiber networks.

The FCC Wireline Bureau published a list of census blocks deemed "extremely high-cost" for USF support purposes in areas served by price-cap telcos, in a public notice Tuesday. The census blocks are generally not eligible for Connect America Fund Phase II model-based support, the notice said, but price-cap telcos accepting such support in a state can substitute the identified locations in lieu of those in other census blocks to meet their broadband deployment duties in a state, provided that the total number of locations served is larger than or equal to the number of locations in eligible census blocks that must be served under the duties. The list includes 151,505 extremely high-cost census blocks with varying numbers of locations. (There are more than 11 million census blocks in the U.S., said a Census Bureau Web page). Extremely high-cost census blocks that aren't targeted for CAF Phase II broadband deployment will be included in the Phase II reverse auction the FCC expects to hold some time after carriers decide whether to accept support, the notice said. Those decisions are due Aug. 27, but Frontier already has announced it will accept all $283.4 million in annual support it was offered by the FCC (see 1506160039).

Verizon offered unions representing 38,000 wireline employees 2 percent wage increases the next two years and a $1,000 lump sum payment in the third year as part of a three-year contract offer, the company said in a news release Monday. Opening labor talks, Verizon made the comprehensive offer to the Communications Workers of America and the International Brotherhood of Electrical Workers at the outset "to encourage a substantive and productive dialogue," said Robert Mudge, wireline operations executive vice president. Verizon said the proposed pay increases were contingent on signing an agreement by Aug. 1, and would add to an average annual salary and benefit package of $130,000 for Verizon associates in the east. Pension-eligible associates could choose between continuing to earn benefits under a traditional pension plan with some limitations and forgoing a 401(k) company match, or opting for an enhanced 401(k) plan currently offered to management (including a bigger company match) with a frozen pension benefit, the release said. Verizon called the combined pension and 401(k) benefits for employees hired before Oct. 28, 2012, a structure "from another era." Noting Verizon associates' healthcare costs were above the national average and calling cost control "essential," the carrier proposed an increase of $8.10 per week for individual healthcare premiums and said "other reasonable cost controls" were needed to keep the wireline business competitive. Mudge said fiber deployment had positioned Verizon for growth, but the company's "cost structure has not changed nearly fast enough to align with today's market realities and consumer needs." Verizon said it seeks more flexibility to manage the workforce "consistent with customer demands." Tami Erwin, president of Verizon's Consumer and Mass Business unit, said, "We need contractual changes that position us to compete with new and emerging technologies." The last contract negotiations lasted 15 months in 2011-12, the release noted. IBEW representatives had no comment. CWA issued a statement Tuesday from Dennis Trainor, District 1 vice president, that said: “Verizon’s claims about the pay increases they put on the bargaining table yesterday are simply a smokescreen designed to hide the harsh reality of their concessionary demands: deep cuts to pension benefits, skyrocketing increases in medical costs, and the complete elimination of job security. Despite $9.6 billion in profits in 2014 and $44 million in compensation to their top five executives, Verizon wants to eliminate middle-class jobs and let customer service deteriorate. Their proposals would slash thousands of jobs and leave our remaining members with a diminished standard of living at the end of any new contract."