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FCC Proposes Special Access Incentive Regulation for Rate-Of-Return ILECs

Posted by Andrew Regitsky

Mar 30, 2018 10:00:00 AM

 

Last year the FCC determined that price cap ILEC special access and packet services should be almost entirely deregulated with only DS1 and DS3 transport subject to price cap regulation if the ILEC failed a highly criticized "competitive" market test.  This regulatory scheme became effective on August 1, 2017 when the Business Data Services (BDS) Order took effect.

That Order put many rate-of-return (ROR) ILECs in a unique position.  More than 200 ROR ILECs now receive universal service support based on a cost model called the Alternative Connect America Fund Cost Model (ACAM).  In return for a fixed amount of support, these ILECs are required to meet a specified level of broadband deployment.  This method to recover Connect America Fund (CAF) dollars has become very popular among ROR carriers.  However, as a result, these LECS are no longer in the NECA Common Line Pool and remain subject to rate regulation only for their special access services.  Some parties sought to change that.

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Topics: ILECs, FCC, CLECs, commissions order, federal trade commission, Business Data Services, clec, regulatory updates, rate of return

FCC Settles Price Cap ILEC Tandem Transport Access Issue

Posted by Andrew Regitsky

Mar 23, 2018 10:00:00 AM

Last year's ILEC Annual Access Filings brought a lot of confusion to the industry. It was Year 6 in the transition to bill –and-keep for most terminating switched access charges, and it was an important step for the tandem-switched transport rates of price cap ILECs.

According to part 51.907(g)(2) of the FCC's rules, effective July 1, 2017, price cap ILECs were required to:

Establish, for interstate and intrastate terminating traffic traversing a tandem switch that the terminating carrier or its affiliates owns, Tandem-Switched Transport Access Service rates no greater than $0.0007 per minute.

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Topics: ILECs, FCC, CLECs, commissions order, federal trade commission

Ninth Circuit Decision is Big Victory for FTC and FCC

Posted by Andrew Regitsky

Mar 2, 2018 10:09:02 AM

In a February 26, 2018 Opinion, the full Ninth Circuit Court in San Francisco gave the Federal Trade Commission (FTC) a huge victory when it found that a company is regulated as if it were a common carrier based on a specific "activity" rather than by "status." In other words, a non-common carrier cannot become a common carrier and escape FTC regulation for its non-common carrier services simply by providing a single common carrier service. Instead, as per usual, its common carrier services would be regulated by the FCC, but its non-common carrier services would fall under FTC authority.   

The significance of this is clear. The non-common carrier services such as broadband Internet access service provided by ISPs like AT&T and Verizon will be regulated under section 5 of the FTC rules, as the FCC envisioned in its recently released Restoring Internet Freedom Order.

Here is the background for this important Opinion.

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Topics: terminating traffic, direct connections, wireless, wireless carriers, bill-and-keep, small providers, service providers, Inteliquent, wholesale traffic, AT&T, ILECs, inter-carrier compensation, clec, CLECs, terminating access charges, FCC, IXC, switched access

Can a CLEC Force an IXC to Buy Switched Access

Posted by Andrew Regitsky

Feb 23, 2018 10:00:00 AM

Industry comments are due on March 14, 2018, involving one of the weirdest filings to come before the FCC in a long time. In a Petition for Expedited Declaratory Ruling (Petition) filed by South Dakota Networks (SDN) on February 7, 2018 in Docket 18-41, SDN requests the Commission to issue a declaratory ruling asserting that in a dispute between it and Northern Valley Communications, Inc. (NVC) involving interstate switched access traffic:

A contract between SDN and AT&T, negotiated to terminate large volumes of traffic originally bound to a CLEC (NVC) engaged in access stimulation is lawful; and,CLECs, such as NVC, enjoy no exclusive right to transport terminating traffic to their end offices (or elsewhere). Moreover, the filing of a federal tariff by a CLEC, does not confer a right to compel other carriers to use the tariffed services.

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Topics: terminating traffic, direct connections, wireless, wireless carriers, bill-and-keep, small providers, service providers, Inteliquent, wholesale traffic, AT&T, ILECs, inter-carrier compensation, clec, CLECs, terminating access charges, FCC, IXC, switched access, terminating switched access, federal tariff

AT&T Wants Immediate Action on 8YY Query Charges

Posted by Andrew Regitsky

Feb 16, 2018 10:06:22 AM

Even with inter-carrier compensation reform, some bad actors continue to abuse the remaining price differences in switched access charges to enrich themselves. These arbitrage opportunities exist because rural ILECs were not required to reduce terminating tandem-switched transport to bill-and-keep maintaining their access revenues and originating switched access charges were never reformed at all by the FCC.

On the terminating side, some LECs continue to contract out with enterprises that generate large numbers of terminating calls and split the excess access revenues. Next week, we will discuss this issue of access stimulation (or traffic pumping) and review a current case where the FCC will determine whether IXCs must utilize the tariffs of LECs engaged in such a practice.

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Topics: terminating traffic, direct connections, wireless, wireless carriers, bill-and-keep, small providers, service providers, Inteliquent, wholesale traffic, AT&T, 8yy, 8yy query charges, ILECs, inter-carrier compensation, clec, CLECs, terminating access charges, FCC

8YY Proceeding a New Test of FCC's Intentions

Posted by Andrew Regitsky

Aug 25, 2017 10:00:00 AM

The next test for the Trump-era FCC is here. Reply comments were filed on August 15, 2017 in the proceeding which will determine whether originating or terminating access charges will apply to toll-free 8YY calls.

The large IXCs believe at a minimum that the current situation in which they pay originating access is untenable. They argue that with the transition of most terminating access charges to bill-and keep nearing transition, industry bad actors have moved their arbitrage schemes to originating access including 8YY calls.  As AT&T notes:

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Topics: FCC, regulatory updates, CLECs, ILECs

CLECs: Thumbs Down to FCC Deregulation of ILEC Special Access

Posted by Andrew Regitsky

Apr 14, 2017 10:00:00 AM

CLECs wasted little time in attacking the FCC’s draft Report and Order (Order) that the FCC will vote on and approve on April 20, 2017. The Order will deregulate and eliminate pricing rules for most ILEC special access services. In a series of ex parte filings and visits to the Commission this week, CLECs made it clear that they don’t accept the market test that would be used to classify markets into competitive or non-competitive buckets, believing that too many DS1 and DS3 customers will be left at the mercy of ILEC monopoly pricing.

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Topics: FCC, regulatory updates, CLECs, ILECs

Competitive Carriers State Their Broadband Case to the FCC

Posted by Andrew Regitsky

Feb 24, 2017 10:00:00 AM

The election of Donald Trump was a heavy blow to CLECs and smaller ISPs. Former FCC Chairman Tom Wheeler had been a kindred spirit they could turn to reliably create regulations almost on an as needed basis. That empathy for competitive carriers has almost certainly been lost under the auspices of new Chairman Ajit Pai. But independent carriers are not going away and certainly are going to pressure the new Commission to respond to their concerns. That was made clear in a February 13th letter from the association INCOMPAS to Chairman Pai detailing the steps competitive carriers want the FCC to take to better enable broadband deployment.

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Topics: FCC, regulatory updates, CLECs, ISPs, independent carriers

DC Circuit Vacates FCC’s Local Switching Declaratory Ruling

Posted by Andrew Regitsky

Nov 28, 2016 10:00:00 AM

The good news for large telecommunication companies did not end on Election Day. On Friday, the DC Circuit Court of Appeals vacated and remanded for further review the FCC’s 2015 Declaratory Ruling that required AT&T and other long-distance providers to pay local switching access charges to CLECs, working with over-the-top Voice over Internet Protocol (VoIP) providers serving end user customers. The Court found that the Commission’s Declaratory Ruling was inadequate because it failed to provide a functional difference between local switching to an end office and lower priced tandem switching.

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Topics: FCC, regulatory updates, CLECs, VoIP

CLEC Alert: Fate of Wholesale Network Platform To Be Determined In FCC’s Business Data Services Order

Posted by Andrew Regitsky

Sep 30, 2016 10:00:00 AM

The Unbundled Network Element Platform (UNE-P) continues to live for now in the form of commercial wholesale network platform services offered by AT&T and Verizon. These services, called Local Service Complete and Wholesale Advantage respectively, provide CLECs unbundled access to ILEC voice loops, switching and transport in one package and provide the most cost efficient method to enter local markets without purchasing costly network facilities. However, they are in danger of ending when the FCC issues its Business Data Services (BDS) Order later this year.

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Topics: FCC, regulatory updates, CLECs, Business Data Services, special access

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