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.
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.
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.
Topics: CLECs, FCC, ILECs, switched access, service providers, bill-and-keep, wireless, inter-carrier compensation, terminating traffic, direct connections, wireless carriers, small providers, Inteliquent, wholesale traffic, AT&T, clec, terminating access charges, IXC
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.
Topics: CLECs, FCC, ILECs, switched access, service providers, bill-and-keep, wireless, inter-carrier compensation, terminating switched access, terminating traffic, direct connections, wireless carriers, small providers, Inteliquent, wholesale traffic, AT&T, clec, terminating access charges, IXC, federal tariff
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.
Topics: CLECs, FCC, ILECs, service providers, bill-and-keep, wireless, inter-carrier compensation, terminating traffic, direct connections, wireless carriers, small providers, Inteliquent, wholesale traffic, AT&T, 8yy, clec, terminating access charges, 8yy query charges
Jan 15, 2018 10:00:00 AM
That’s right, just when you thought the FCC’s terminating switched access reforms to a bill-and -keep regime would make your life simpler, it turns out things are much more complex – and error prone – than ever. For example, in one New York state Local Access and Transport Area (LATA) terminating switched access cost per minute (CPM) can range from $0.00070000 to $0.00883148, that’s over twelve times higher! We’ll share the gory details later in the blog, but first some background.
The July 1, 2017 access filings added a brand-new twist to terminating access rate management, the notion of “affiliation”. Simply put, if the access tandem (AT) and the terminating end office (EO) are owned by the same incumbent local exchange carrier (ILEC) , i.e. affiliated and are price cap regulated - one set of rate elements apply; if the access tandem and the terminating end office are owned by two different ILECs, i.e. non-affiliated, another set of rate element apply.
Jan 12, 2018 10:00:00 AM
Several diverse companies have banded together to complain to the FCC that despite the transition of terminating switched access rates to bill-and-keep, national wireless carriers are engaging in traffic aggregation schemes at the terminating end of calls. In a December 4, 2017 ex parte presentation in Docket 10-90, the Klein Law Group representing Consolidated Communications, Peerless Network and West Telecom Services noted that:
By refusing direct interconnection (and in some cases terminating existing connections altogether) for all terminating traffic or certain types of terminating traffic (e.g., interMTA and/or wholesale traffic), these wireless carriers are forcing such terminating traffic to be routed through their “intermediate carrier partners” or “affiliates” and as a result, originating carriers no longer can terminate such traffic to these wireless carriers on a bill-and-keep basis. (Klein Law Group, ex parte, at p. 3).
Jan 5, 2018 10:00:00 AM
Happy New Year! 2018 is set to be the most unusual year ever for the telecom industry. In every other year I can remember, there were a set of issues everyone knew the FCC was likely to grapple with. Last year with a brand new conservative Commission it was obvious that Chairman Ajit Pai was going to reverse the 2015 net neutrality rules, eliminate one-sided ISP privacy rules (with the help of Congress) and deregulate ILEC special access services. In addition, the Commission improved the pole attachment rules, modified the Lifeline program and began looking at additional switched access reform. It was easy to criticize the FCC for many of its actions, but no one could accuse the FCC of inaction, even when they had less than a full complement of five commissioners.
Topics: regulatory updates, FCC, ILECs, Net Neutrality, Open Internet, internet regulation, open internet order, federal trade commission, internet freedom, CCMI, ajit pai, ftc, litigation, internet freedom order, open internet preservation act, congress
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:
Jun 23, 2017 10:00:00 AM
Will rate-of-return (ROR) regulation for rural ILECs soon disappear? It clearly is on the ropes for the many small ILECs now using the Alternative Cost Model (ACAM) to recover their loop costs and receive Connect America Fund (CAF) support. These LECS are no longer in the NECA Common Line Pool and not subject to an authorized common line rate of return.