CenturyLink received four fair-opportunity award decisions from the U.S. Defense Information Systems Agency to provide DISA network and data transmission services, said the telco in a Wednesday news release. The task orders, which run through May 2017, were awarded via the General Services Administration’s Networx Enterprise contract and are valued at up to $10 million, it said. CenturyLink will provide ethernet private line and IP services to support advanced data services for global Defense Information Systems Network users in the continental U.S.

The FCC and stakeholders are making progress on a possible rural USF overhaul, NTCA Senior Vice President Mike Romano told us Wednesday. Romano said NTCA is continuing to talk to the FCC about a variety of ways to approach changes to the existing USF mechanisms of rate-of-return carriers. "Nothing’s firm yet, but I think we’re making good progress in finding a way through the logjam that's been tying things up for months now," he said. Various issues still have to be addressed, such as the basic structure of an overhaul and how to deal with new funding limits and unsubsidized competitive overlap, he said, and timing isn't yet clear. "We continue to treat USF reform issues as if the commission is going to circulate an order at any time," he said, referring to a December statement he made (see 1512240014). "We don’t know when it will circulate, but we're treating it as if it could be any day, any week, any month." A draft rural USF broadband overhaul order is unlikely to be on the tentative agenda due out Thursday for the Feb. 18 FCC meeting, but is more likely for the March 31 meeting, an industry source told us Tuesday (see 1601260063).

Moody's predicted wireline telcos will suffer a "slow yet steady decline" due to various constraints, including "capital allocation practices that favor shareholder returns, lagging infrastructure relative to cable companies and high cost of capital." Telcos such as CenturyLink, Frontier Communications and Windstream "all have high dividend yields that promote a cycle that steadily erodes each company's value and scale," Moody's said in a release Wednesday. "These telcos have strong operating cash flows and the ability to invest more, but they are hindered by market expectations for dividends," said Mark Stodden, a Moody's vice president-senior credit officer. "Their weak market position can only be changed by increased investment, but this would threaten dividends and is unpalatable to both equity investors and management teams." Moody's said there's a widening competitive gap between cable companies and telcos offering mostly DSL. "To compete with cable operators, DSL telcos would need to make significant investments in fiber-optic service, which they are generally unwilling to do," Moody's said, citing a report: "Wireline Telecommunications -- US - Boxed In: Wireline Telcos Face Continued, Painfully Slow Decline." Moody's added, "These factors will together force telcos to make credit-negative decisions pertaining to capital re-allocation that will slowly erode their competitive positions, and ultimately, their credit metrics."

Verizon said there was record Fios traffic over the weekend due to customers stuck at home by Winter Storm Jonas. Fios data traffic was up almost 40 percent at its peak Saturday compared with a typical weekend day, and Sunday's numbers "were almost as impressive," said a company release Tuesday. "We also saw record Fios TV Video on Demand requests on Saturday with 50 percent higher demand than a typical Saturday and 20 percent higher than our previous busiest day," Verizon said. "While we certainly don’t wish another blizzard the magnitude of Jonas on our customers, we do want them to know, that the next time they’re stuck at home when they’d otherwise be out having fun, the nation’s largest 100 percent fiber-optic network will be there to help fend off the boredom." Some cable companies in storm-hit areas also reported higher Internet and on-demand usage for the weekend (see 1601250058).

Global Tel*Link targeted FCC exclusion of site commission costs as central to its court challenge to the agency's inmate calling service rate restrictions (see 1510220059). The commission order "(i) imposed tiered rate caps for ICS in prisons, jails, and other correctional facilities based on the FCC’s calculation of the cost of providing ICS; (ii) excluded from its calculation of the cost of providing ICS the site commissions ICS providers are required to pay correctional facilities for the right to provide service; (iii) applied its rate caps to both interstate and intrastate ICS calls," GTL said in a statement of legal issues filed Monday with the U.S. Court of Appeals for the D.C. Circuit (Global Tel*Link v. FCC, No. 15-1461 and consolidated cases). GTL said the issues include whether the decision to exclude site commissions from its calculations caused the FCC to set rate caps at levels that (1) prevent ICS providers from recovering their acknowledged costs, (2) are confiscatory and (3) are arbitrary and capricious and otherwise unlawful. GTL also questioned the legality and constitutionality of the rate caps notwithstanding the exclusion of site commission calculations, and whether the FCC had the authority to reduce and cap intrastate ICS rates. In a separate statement, GTL asked for more time to propose a briefing format, since two other parties, Securus and Telmate, have filed legal challenges and the time for filing hasn't closed. The FCC recently denied ICS provider requests for a stay of the order; the providers have said they will seek a court stay (see 1601220040).

The Fiber to the Home Council cited a member's cost reductions in arguing for Connect America Fund Phase II reverse auction rules that favor fiber deployment. Noting the economic challenges of rolling out fiber networks in rural areas, the FTTH Council said Clearfield Inc. is using innovative practices and equipment to drive down the costs of deployment, including in rural areas. "For instance, in working with a rural provider in a smaller community in Minnesota, [Clearfield] used 'open architecture' equipment and other practices that resulted in the FTTH deployment costing approximately $800 per home passed, which is similar to the cost of an urban build," the trade group said in a filing posted Friday in docket 10-90 summarizing an FCC meeting about the planned CAF II reverse auction, which is the subject of a draft order. "In another build in rural Oregon, the cost to pass a home was approximately $1,100. Just five years ago, the cost of a rural FTTH build was much greater." Clearfield believes more savings can be expected -- particularly on labor, a major cost component -- by providing equipment that's easier to connect and improving productivity through better training, the FTTH Council said. The reduced costs have lowered the "payback period" in rural areas to seven years, it said. Based on market trends, "the Commission should conclude that FTTH deployments in all but the very least dense rural areas are economically viable and will be increasingly so," said the FTTH Council. "This means that the Commission should feel confident that it can use CAF support to bring the same 'future-proof' technology (FTTH networks) to unserved areas cost-effectively and should not fear 'running out of support' if FTTH is preferred in a competitive bidding process." The Utilities Telecom Council and the National Rural Electric Cooperative Association also urged the FCC to adopt fiber-friendly CAF II auction rules, said a filing last week. Commissioner Mike O’Rielly and satellite interests have voiced concerns about a possible FCC fiber preference (see 1511170063 and 1512290025).

FCC Commissioner Mike O’Rielly welcomed an FCC request for additional comments on a 2012 USTelecom petition for ILEC nondominance on certain services (see 1601210066). "Although refreshing the record is likely to confirm [what] we already know, I’m pleased that the ball is finally starting to roll on this item as it should allow the Commission to move to final action of providing the requested and appropriate relief very soon. I hope commenters will focus on the petition before the Commission and not esoteric issues, views or concerns," O’Rielly said in a statement Thursday. USTelecom had asked that incumbent telcos be declared "no longer presumptively dominant when providing interstate mass market and enterprise switched access services," said a Wireline Bureau public notice earlier Thursday in docket 13-3. Comments are due Feb. 22, replies March 7.

Federal judges denied a Saturn Telecommunication Services challenge to two FCC orders that dismissed the company’s complaint against AT&T for allegedly violating duties on discounted wholesale access to its unbundled network elements (UNEs). Saturn failed to raise any new objections that weren't covered by a 2006 settlement with AT&T, a panel of the 11th Circuit Court of Appeals ruled in a short per curium order Friday (Saturn v. FCC, No. 14-15422). “Under the Settlement Agreement, Saturn released ‘all Demands, Actions, and Claims, whether known or unknown, asserted or which could have been asserted, against [AT&T] related to the'" 2006 dispute, the 11th Circuit panel said. The judges said the agreement “broadly and unambiguously releases all claims that relate to the 2006 dispute and had accrued” as of the effective date. Saturn said AT&T engaged in post-settlement violations. But the Enforcement Bureau, in an order upheld by the full FCC, said Saturn’s new complaints closely related to or were the same as those that were raised or could have been raised in 2006, said the court, which agreed with the commission view. Saturn thus “fails to allege a new, independent violation as opposed to a continuation of the same released misconduct,” the judges said in upholding the FCC decisions. Saturn had no comment.

The FCC teed up the National Exchange Carrier Association's proposals for modifying "average schedule" (rural carrier) formulas for interstate settlements, the Wireline Bureau said in a Thursday public notice in docket 15-298. Initial comments are due Feb. 22, replies March 8. "NECA proposes to revise the formulas for average schedule interstate settlement disbursements in connection with the provision of interstate access services for the period beginning July 1, 2016, through June 30, 2017," the bureau said. "According to NECA’s filing, the proposed formula changes will increase settlement rates by 2.6 percent at constant demand."

The FCC Wireline Bureau sought to refresh the record on a USTelecom petition from 2012 asking that incumbent telcos (ILECs) be declared "no longer presumptively dominant when providing interstate mass market and enterprise switched access services," said a public notice Thursday in docket 13-3. Comments are due Feb. 22, replies March 7. "We particularly welcome comment on marketplace or regulatory developments, since the filing of the Petition, that may bear on the Commission’s evaluation of the Petition," the bureau said. "We also encourage commenters to address further the practical impact and scope of the finding sought by the Petition. For instance, if the Commission were to grant the Petition, what services should it appropriately find to be included in the category 'interstate mass market and enterprise switched access services'? More generally, we invite commenters to submit any other data, information, or analysis that would be relevant to the Commission’s evaluation of the Petition."