FCC Releases Proposed Rulemaking on DE Rules

On Wednesday the FCC released an FNPRM proposing revised rules regarding how bidding credits will be provided to "Designated entities" (DEs)(small and woman/minority owned small businesses or rural telcos). The FCC's proposed rules prohibit the awarding of DE credits to companies that have a "material relationship" with large in-region incumbent wireless companies, but the FCC is considering whether to expand the ban to other large companies like big manufacturers of equipment, cable companies or others. Some stakeholders who had urged reform of the DE rules are not at all happy with the revised rules, but the Chairman said in his statement that the revised rules will ensure that small businesses are able to compete in the upcoming spectrum auctions. Comment deadlines on the new rules have not been established yet.

The Numbers, Please...

The California PUC is planning to open a new rulemaking by the end of May to re-examine all of the rules and funding mechanisms for California's extensive stand-alone state universal service and public policy programs (i.e. Calif. Teleconnect, Deaf and Disabled). Interestingly, AT&T is urging the CPUC to get rid of its surcharges on intrastate telecom revenues, and urging adoption of a numbers-based USF funding mechanism based on working telephone numbers that mirrors the proposal being advocated by some at the federal level. AT&T's proposal was unveiled in comments that were filed on a CPUC Staff Report in advance of a two-day workshop held in San Francisco on Tuesday and Wednesday this week, led by Commissioner Rachelle Chong and the assigned ALJ. The same questions that are greeting the federal proposal were raised at the workshop, including whether the contribution base would be adequate and whether or how the CPUC could assess surcharges on California numbers utilized by VoIP carriers that are not being used for intrastate access or in any way associated with California.

What a JIP!

For all of you negotiating with the "New AT&T," push hard on the new JIP language in their master services agreements. Let them know that their regulatory folks are running around the FCC saying that the JIP isn't useful for anything and that it would be expensive and wasteful to implement. Their FCC advocacy to the contrary, AT&T's business people are holding firm that carriers have to pass JIP in the SS7 stream.

Pot, meet kettle.

What Consensus? NARUC Intercarrier Compensation Taskforce Update

Last Friday, the NARUC Intercarrier Compensation Taskforce announced that "it had received support from enough stakeholders for the industry plan to proceed with a Task Force review."

Since that press release, consumer advocates, cable operators, wireless providers, and competitive LECs have announced that they did not endorse the so-called "Missoula Plan."

So, how much support is "enough" to have an "industry plan"? Apparently, support from AT&T (or should we say AT&T, BellSouth, and SBC) and some rural LECs is enough to create "consensus." From our perspective, this "industry plan" is probably better characterized as an incumbent LEC plan.

The leadership of the NARUC Taskforce has done an admirable job of trying to develop a consensus plan over the last two years. But an incumbent LEC plan is an incumbent LEC plan.

The "Courageous CLEC" Fights for Real Interconnection Agreement Enforcement under the 1996 Act

Core Communications, Inc., dubbed the Courageous CLEC by Jonathan Askin of pulver.com, is heading to the Court of Appeals for the Third Circuit to fight for real interconnection agreement enforcement as required by the 1996 Telecom Act.

A key issue is whether a CLEC must pursue relief at a state public service commission before going to federal court. The BOCs have effectively precluded real interconnection agreement enforcement by forcing CLECs to litigate at the state commission before going to federal court, even though nothing in the 1996 Telecom Act requires such a wasteful step. State PUCs generally have no authority to award damages, hear tort claims, or even require reasonable discovery. By creating a legal morass at the state commissions, BOCs have precluded competitors from virtually any successful enforcement action.

In his March 21, 2006 opinion, federal judge Timothy Savage stated that "strict construction of the" 1996 Act "demonstrates that Congress did not intend the states to make decisions regarding contractual disputes between parties to such agreements." He also strongly suggested that private rights of action to enforce contractual rights under federal interconnection agreement belong in the courts, not state executive agencies. Click here to take a look at Judge Savage's opinion.

Parties interested in effective enforcement should watch this case carefully. Without effective enforcement, even the best FCC rules on net neutrality, VoIP, and other matters will be effectively worthless.

Effective private enforcement of interconnection agreements and other federal requirements is critical to non-ILEC segments of the industry, and the Courageous CLEC is giving the industry another chance give us all the 1996 Act that Congress intended, not what the BOCs have made it.

FCC Establishes Pleading Cycle On Georgia PSC Section 271 UNE Rate Petition

On April 18 the Georgia PSC (GPSC) filed a petition asking the FCC to bless the rates it established for Section 271 UNEs. The full petition is available here. Specifically, the petition for declaratory ruling seeks clarification that the GPSC is not preempted by federal law from setting just and reasonable rates under Section 271 of the Act, for local switching, high capacity loops and transport, and line sharing. In the alternative, the if FCC decides that GPSC is in fact preempted from setting Section 271 rates, the GPSC asks the FCC to find that the rates it has already adopted for high capacity loops and transport and line sharing are just and reasonable, and that BellSouth is obligated to abide by those rates in Georgia. If the Commission instead finds that the rates ordered by the GPSC are not just and reasonable, and that the GPSC is preempted from setting rates in this context, the GPSC asks the Commission to set just and reasonable rates for BellSouth's high capacity loops and transport, and line sharing in Georgia based on the record in the state proceeding the GPSC attached to its petition. Comments on the petition are due May 19, 2006 and reply comments are due June 5, 2006. Please contact us if you would like more information or like to file comments in the proceeding.

Final AWS Auction Rules Published in Today's Federal Register

The rules for the upcoming AWS auction, which the FCC adopted at its April 12 meeting, are published in today's Federal Register. The auction of licenses in the 1710-1755 MHz and 2110-2155 MHz bands, used mostly for mobile wireless services, is scheduled to begin on June 29, 2006. The FCC's final bidding rules are a departure from past auctions. To address concerns that some bidders may have colluded in the past, the FCC adopted "blind bidding" rules. That means that the identity of bidders will be kept secret following each round of the auction unless certain competitive auction thresholds are met. Under the new blind bidding approach, the FCC will disclose at the end of each round of bidding the gross amount of every bid placed but not the identity of the bidder. The rules are designed to prevent bidders from signaling each other or from coordinating bids. This also is the first auction subject to the Commercial Spectrum Enhancement Act, which requires that auction proceeds must be sufficient (at least 110 percent) of estimated relocation costs of eligible federal entities. The winning bids for this auction must total at least $2.06 billion for the FCC to close the auction and award the licenses.

Ross Buntrock