Rural telcos should be OK despite a possible FCC re-definition of “broadband,” said Guggenheim Partners analyst Paul Gallant in a research note Monday. The FCC recently proposed to redefine “broadband” as 10 Mbps, up from 4 Mbps, in order to be eligible for Connect America Fund money (CD April 8 p1). “Given the tone of the Democratic majority in announcing the proposed increase, we suspect the FCC is likely to raise minimum deployment speeds from 4 to 10 Mbps,” Gallant said. That could lead to higher projected costs and a risk carriers wouldn’t accept CAF Phase II money, but “the FCC is sensitive to this risk and is likely to explore adjustments to other buildout factors” that might make it more “economically attractive” for telcos to accept CAF II payments for broadband buildout, Gallant said. Telcos like CenturyLink, Frontier Communications and Windstream are likely to accept the money, he said. They would start getting those payments in lieu of USF support around July 2015, he said. (See separate report on broadband speeds above in this issue.)

Paid prioritization as envisioned by Free Press and other net neutrality proponents doesn’t exist, said AT&T Senior Executive Vice President Jim Cicconi Friday in a blog post (http://bit.ly/1i8OitQ). The Internet “is totally safe from fast lanes and slow lanes,” and no ISP has any plans to introduce the kind of paid prioritization Free Press warns against, he said. All ISPs have posted policies that prohibit the kinds of discriminatory practices raised by net neutrality proponents, he said. Reclassifying broadband as a Title II common-carrier service would do little good, Cicconi warned. “Some groups have suggested the best path to prevent paid prioritization is Title II,” he said. “But there’s one gigantic problem with this. The plain language of Title II provides no basis to prohibit paid prioritization. Quite the contrary, Title II actually allows and could protect any such practice.” Cicconi is “just plain wrong,” responded Free Press Policy Director Matt Wood. “AT&T has a consistent record of blocking applications that compete with its own voice and messaging services.” Wood cited AT&T’s blocking of Skype, Apple’s FaceTime app and Google Voice “right up until the FCC and Free Press started asking questions and drawing up Net Neutrality complaints about these tactics.” AT&T also demands extra from content providers, Wood said. “Look no further than the new practice of charging video-streaming services like Netflix an extra fee just to get their traffic on to last-mile broadband networks."

Matrix Telecom will pay $875,000 to resolve an FCC Enforcement Bureau investigation into the telco’s ability to reliably complete long-distance calls to rural areas, said a bureau order released Wednesday. Matrix also agreed in the bureau consent decree (http://bit.ly/Sc1PcZ) to implement a three-year plan to comply with FCC rural call completion requirements. Upon the start of the investigation, Matrix significantly reduced the number of intermediate providers it uses to deliver long-distance calls to rural areas, said an FCC news release (http://fcc.us/SxYW6G). It said Matrix’s call completion performance to rural areas improved significantly. A message left at Matrix’s corporate headquarters was not returned. The case is the third resolving a rural call completion investigation in the past 15 months, the FCC said. In March 2013, Level 3 paid $975,000 (CD March 13/13 p7) to settle the bureau’s investigation of its rural call-completion performance, and in February 2014 Windstream paid $2.5 million (CD Feb 21 p15) to settle. The agreement was hailed by members of Congress, including Sen. Tim Johnson, D-S.D., who called it in a statement Thursday, “an important step forward” that sends “another clear message that the bad actors failing to complete calls to rural areas will be held accountable. ... The ongoing call completion problems create serious economic and public safety concerns for rural communities in South Dakota and across our nation.” Senate Commerce Committee ranking member John Thune, R-S.D., urged continued FCC enforcement. “This is a timely action by the FCC, particularly after two FCC commissioners visited South Dakota last week to hear about and observe the challenges rural carriers face,” he said in a statement Thursday. “This is only the third enforcement action in 15 months by the FCC to combat this persistent problem. The inability of individuals and businesses in rural America to have reliable telephone service is inexcusable.” NTCA CEO Shirley Bloomfield said in a statement Thursday, it’s again “clear that the unsafe and illegal practices of least-cost routers and the carriers that employ them are to blame for rural consumers’ ongoing inability to receive phone calls.” She said the investigation emphasizes the need for congressional legislation like a measure proposed (CD March 14 p7) by Johnson “to bring least-cost routers out of the shadows and put an end to the problem once and for all."

Purple Communications asked the FCC to act on its Feb. 20 emergency request for review of a decision by the Interstate Telecommunications Relay Service Fund administrator to withhold reimbursement for all IP-captioned telephone service (IP-CTS) minutes processed by Purple for November. The administrator “without any analysis or investigation, summarily concluded that Purple was ‘in violation’ of the Commission’s emergency handling requirements for IP CTS,” Purple said (http://bit.ly/UeVoYu). But Purple maintains that these emergency call handling requirements do not apply to Purple’s Web and wireless IP CTS service “because users of this service do not ‘initiate calls,'” the company said in a letter posted Thursday in docket 03-123.

The FCC rejected a request by the Diogenes Telecommunications Project (DTP) that it reopen an investigation of AT&T for alleged misconduct in providing Telecommunications Relay Service (TRS). The project lacks standing, the FCC said in a Wednesday order (http://fcc.us/S9ho5h). In May 2013, AT&T agreed to pay $18.25 million to settle an FCC investigation into improper billing to the TRS fund and to adopt compliance measures (http://bit.ly/109q7Fk). The application for review by DTP “does not allege any direct or personal injury to DTP as an organization or to any of its members,” the FCC said. “It offers only a generalized and purely hypothetical injury.” DTP only “speculates that there might possibly be some injury to one of its members,” the FCC said.

GTL met with FCC Commissioner Mignon Clyburn to discuss prison calling items and how to avoid a legal challenge after the inmate calling services (ICS) proceeding now before the agency. The meeting’s “primary purpose” was “to determine whether the interests of the Commission, FCC Staff, ICS stakeholders, and ICS providers can be aligned to bring about an efficient, national solution,” said the provider of calling services to correction facilities in an ex parte filing posted Monday in docket 12-375 (http://bit.ly/1kzUnEh). Among those attending the meeting for GTL were CEO Brian Oliver and General Counsel David Silverman. Executives discussed “jurisdictional issues” with Clyburn and staff as well as the need for a transition period and how “competitive market forces are the most effective and efficient means for achieving just and reasonable rates,” said the company. Interim interstate prison calling rates took effect in February. As acting FCC chairwoman last year, Clyburn considered reducing prison calling rates a top priority (CD Nov 4/13 p1).

Phone surveillance is still legally fine for now, the U.S. District Court for Idaho ruled without enthusiasm Tuesday in Anna Smith v. Barack Obama. The eight-page ruling is bound to the legal reasoning of the 1979 Smith v. Maryland Supreme Court case, which has been used to uphold the government’s bulk collection of phone metadata, it said. But differences have emerged since that case, the court ruling argued. The National Security Agency collection “goes beyond the telephone numbers that Smith dials, and reaches into her personal information,” the court said, also pointing to location information as particularly revealing. Thus the Supreme Court should reconsider Smith v. Maryland, the court said.

There’s a “pressing need” for the FCC to quickly clarify the Communications Act Section 214(a) process, Public Knowledge told agency officials including General Counsel Jon Sallet Tuesday, said an ex parte filing in docket 13-5 (http://bit.ly/1kueofw). The traditional 214(a) process “is simply not suited to the situation where a carrier wishes to discontinue an existing service still in high demand in the service territory and replace it with another service,” PK said. The commission must make clear what is necessary to meet the “impairment” standard -- that is, what is required so replacement of TDM with a new service doesn’t “reduce” or “impair” service, PK said.

The FCC Wireline Bureau reversed 11 E-rate decisions by the Universal Service Administrative Co., it said in an order Thursday (http://fcc.us/1wu8jEv). USAC had found petitioners didn’t get an extension of deadlines for service implementation, but in each case, “petitioners were unable to complete implementation on time for reasons beyond the service providers’ control, one of the criteria required by the rule for an extension of services implementation,” the bureau said in the order. “Petitioners made significant efforts to secure the necessary extensions,” it said, noting no evidence of waste, fraud or abuse.

Comptel’s “so-called ‘managerial framework'” for copper retirement and IP interconnection would stand in the way of the “market-led progression to IP interconnection voice traffic” and would “prejudge” the FCC special access proceeding, Verizon told the agency in a filing posted Wednesday to docket 13-5 (http://bit.ly/1rhGGyj). Comptel’s framework (CD April 3 p18) would “harm consumers and impede the transition to IP-based networks,” Verizon said. Comptel’s “radical” request that the FCC suspend its copper retirement rules would reverse “long-settled policies” that have encouraged facilities-based broadband investment and competition, Verizon said. The telco is “at the forefront” of IP VoIP interconnection agreements, and “the only thing standing in the way” of such agreements is certain providers’ “unwillingness” to pursue arrangements on “commercially reasonable terms,” Verizon said. “The Commission should reject Comptel’s continuing unsupported and unsupportable claims, and it should let its proceedings follow their normal course in order to reach data-driven decisions that encourage investment in next generation IP-based broadband networks."