FCC letter of credit requirements for recipients of rural broadband experiment (RBE) funding are "inconsistent with commercially prudent lending practices,” CoBank said in a letter to the agency posted Friday in docket 10-90. RBE recipients need to obtain a letter of credit when they are selected for funding and then renew and increase the letter of credit each year to reflect the amount of funding they will receive over the next year, the rural lender noted. If a recipient can't obtain a letter in any year, it would be considered in default by the commission, which would be able to demand repayment of the funds, the filing said. The bank that initially approved the letter of credit would effectively be in the position of having to renew the letter of credit each year or having the borrower face default, CoBank said. The lenders’ exposure would increase over time “as it is impossible to assess the various risks facing operators in the rapidly changing telecommunications industry over a 10-year horizon,” the filing said. The amount required to be covered by a letter of credit should increase only through the build-out period and then be reduced or eliminated, CoBank said. The commission’s ability to change performance requirements for carriers also “adds an element of regulatory and political risk,” and is also “inconsistent with commercially prudent lending practices,” CoBank said. The agency should clarify that award recipients are responsible only for meeting the performance standards that exist when the awards are granted, the filing said.

The FCC’s net neutrality order will hurt small edge providers despite the agency’s contention otherwise in a footnote in the order, NERA Economic Consulting said in a paper Wednesday. CALinnovates commissioned NERA to do a paper on the economic ramification of classifying broadband under Communications Act Title II and submitted it as part of the group’s comments in the net neutrality proceeding, the statement said. The agency said it disagreed with the initial paper’s findings, saying it didn't take into account forbearances in the order. “Simply forbearing from selected sections of Title II does not reverse our findings, nor does the FCC provide any evidence that it should,” NERA said in Wednesday's paper. “If anything, we understated the effects this Order has on innovation as it inserts regulatory uncertainty well beyond [that] already contained in Title II.” The order “implements a far-reaching regulatory scheme that is beyond (in many ways) what we envisioned,” the firm said. Among other things, the scope of the order is unclear, because the meaning of terms “broadband Internet access service” and “reasonable network management” will be up for debate, bringing regulatory uncertainty.

Approval of the Comcast/Time Warner Cable deal and the transfer of licenses between Comcast and Charter Communication, would “severely harm competition” and slow the growth of new technologies and networks, representatives of Comptel, NTCA and the Independent Telephone & Telecommunications Alliance told FCC officials, including General Counsel Jonathan Sallet, in a March 12 meeting, according to an ex parte filing posted in docket 14-57 Tuesday. Restricting innovation and competition “could impact job creation, consumer prices, and economic growth,” the filing said. Among those attending the meeting were Comptel Chief Advocate Angie Kronenberg and Assistant General Counsel Mary Albert; NTCA Vice President-Legal and Industry Jill Canfield; ITTA Vice President-Regulatory Affairs Micah Caldwell; Global Economics Group Principals Richard Schmalensee and Howard Chang; and Markham Erickson and Andrew Guhr of Steptoe & Johnson. On the claims about competition, the filing pointed to a separate Steptoe & Johnson filing the same day, which said Comcast/TWC would give Comcast "unprecedented market power" over video distribution, "both as an owner and/or controller of content and as a buyer with tremendous leverage to extract even lower prices for unaffiliated content." The deal would also harm innovation in the set-top box market, the filing said. TWC before the deal had been trying to enable third parties to develop innovative devices for its cable system, the filing said. Comcast, rather than encouraging third-party innovation, "has spent significant resources" developing its own proprietary, closed platform," the Steptoe filing said. "The immediate result of this transaction would be to limit, rather than expand, consumer access to competitive set-top boxes. The demise of FanTV immediately upon the announcement of Comcast’s announced purchase of TWC, suggests that the transaction has already had a chilling effect on innovation." Comcast didn't comment.

Frontier Communications said it continues to strongly support the Connect America Fund, saying its use of CAF Phase I funds in rural areas has connected 164,000 unserved and underserved households to broadband services. Frontier said it has invested $94 million in CAF funds in its infrastructure. The company accepted $72 million in CAF funding in 2012 and $61.3 million in 2013. “There is ample evidence that providing connectivity to rural America brings solid, lasting results,” said Frontier Executive Vice President-External Affairs Kathleen Abernathy in a Monday news release. “CAF Phase II is expected to enable even more rural Americans to connect to the Internet, and Frontier is looking forward to learning further details in the coming weeks regarding CAF Phase II support.”

The FCC Enforcement Bureau’s Market Disputes Resolution Division granted a stay request Monday from Duke Energy, which had asked the commission to pause its proceeding between Frontier Communications and Duke until both companies can complete arbitration in their dispute over the amount of money Frontier owes Duke as part of their joint use of each other’s utility poles in North Carolina. Frontier had filed a complaint with the FCC in January 2014 seeking a reduction in the rates included in its joint use agreement with Duke pursuant to the FCC’s 2011 pole attachment order. Duke had previously filed an arbitration demand in October 2013 over what it claims are unpaid invoice amounts. Frontier had sought a ruling from the U.S. District Court in Raleigh in November 2013 that the FCC had primary jurisdiction over the dispute; the court dismissed Frontier’s complaint in August and compelled the parties to arbitrate. The Raleigh District Court has scheduled a hearing on the arbitration for the week of June 15, the FCC said. The ongoing arbitration process means a stay in the FCC’s proceeding is necessary, because it will “preserve the time and resources of the Commission and the parties by preventing duplicative proceedings addressing the same issues,” the FCC said. “Moreover, Frontier's Complaint is governed by the Arbitration Clause, which applies to ‘disputes aris[ing] between the parties concerning matters pertaining to [the Agreements].’ The parties' dispute as to whether the Agreements' rates are unlawful is a dispute ‘pertaining to’ the Agreements.”

Comments are due April 13 on applications from Frontier Communications and Verizon seeking FCC approval of the transfer to Frontier of licenses and authorizations held by several Verizon subsidiaries, said an agency public notice released Thursday. The transfers include assets in California, Florida and Texas. Reply comments are due April 28, according to the notice in docket 15-44. Frontier would pick up some 3.7 million voice connections, 2.2 million broadband connections and 1.2 million FiOS video connections, the bureau said.

The FCC can increase broadband deployment by tackling the “excessive and increasing costs for video programming,” the American Cable Association said in comments responding to January's Notice of Inquiry into improving deployment (see 1501290043). The commission should update its program access rules to preserve competition in video distribution markets, by taking steps to allow a multichannel video programming distributor buying group like the National Cable Television Cooperative (NCTC) to bring a complaint against discriminatory rates, terms and conditions by a cable-affiliated programmer, ACA said in the comments posted Monday in docket 14-126. More than 900 small and medium-sized broadband and video providers nationally rely on the NCTC to negotiate the bulk of their programming agreements, ACA said. But because of the commission’s “overly-restrictive” definition of buying group, those that rely on NCTC “are without program access protections” and are “at risk of facing higher rates,” the filing said. The commission also should create a rebuttable presumption against allowing exclusive cable programming contracts, ACA said. The NOI had been issued in conjunction with the agency’s decision to increase the broadband speed benchmark to 25 Mbps download and 3 Mbps upload, and the agency’s finding that deployment is not occurring in a reasonable and timely fashion. CTIA in its comments posted Friday objected to mobile deployment not being factored into the conclusion. To increase mobile broadband deployment, the agency should free additional spectrum for wireless broadband, and continue to facilitate wireless infrastructure deployment, through such steps as developing a programmatic agreement to facilitate the deployment of distributed antenna systems and small cells, CTIA said. The commission also should increase funding for the Mobility Fund, which the association called “relatively paltry” compared with funding for wireline providers. USTelecom and NCTA had also responded to the NOI (see 1503060064).

Claims by the Arizona Department of Corrections about the impact of eliminating the commission payments that inmate calling services providers make to correctional facilities are “alarmist" and “entirely misplaced,” wrote the attorney representing the late Martha Wright and others who had petitioned the FCC for action on ICS rates (see 1501200054). The letter was posted in docket 12-375 Friday. ADC had warned that the elimination of the payments would endanger inmate educational services funded with the commissions, said the letter from Lee Petro of Drinker Biddle. Based on budget documents ADC sent to the state’s legislature, funding for inmates education and other programs dropped from $3.2 million in 2010 to $1.7 million in 2014, Petro wrote. The amount ADC received in “’kickbacks’” from the commission payments rose from $3.6 million in 2010 to $4.1 million in 2014, and the surplus in the inmate education and programs fund grew from $1 million in 2010 to $8.8 million in 2014, Petro wrote. ADC referred us to the department's initial comment. Meanwhile, any interstate or intrastate inmate calling services rate cap set by the FCC should be higher than the average cost of providing the services for carriers, Securus CEO Richard Smith, Vice President Dennis Reinhold and Arent Fox’s Stephanie Joyce, representing the company, told an aide to Commissioner Ajit Pai March 8, said an ex parte filing posted Monday. Providers should be able to recover commission payments they make to correctional facilities by going above the cap, the company said. The company representatives made the same arguments, also on March 8, to Wireline Bureau officials, another ex parte filing said. It said bureau officials urged the company to try to reach a consensus with law enforcement associations.

The FCC should add “additional safeguards” on provisions in the December E-rate order (see 1412110049) that allows schools and libraries to spend the program’s funds on using dark fiber to create connections and to build their own broadband facilities, Cox Communications said in a petition for reconsideration posted Monday in docket 13-184. Funding for such uses should be limited to cases in which other services are not available and be capped at $200 million annually, the filing said. E-rate funding also should not be used to match state funding, Cox said, because it could eliminate contributions from schools and libraries applying for funds. The agency also should reconsider its requirement in the order requiring high-cost support recipients to bid on E-rate projects at as-yet-undeveloped benchmarks, WTA-Advocates for Rural Broadband, NTCA and the National Exchange Carriers Association said in a separate petition for reconsideration posted Friday. Proper notice and comment procedures were not followed, the rural associations said. If the petition for reconsideration is denied, the agency should clarify the process and say when the new requirement will take effect, the associations said.

Covered long-distance voice service providers are required to begin recording and retaining rural call completion data April 1, the FCC Wireline Bureau said in a public notice posted in docket 13-39 Wednesday. Reports for the quarter covering April through June must be filed by Aug. 1, the notice said. The data collection became effective Wednesday after the Office of Management and Budget approval Jan. 29, the notice said.