FCC Chairman Pai is circulating a proposal to freeze the local rate floor at $18 until it can act on new rules to completely eliminate the requirement. The FCC will consider the draft Notice of Proposed Rulemaking (NPRM) and Order at its May 18 Open Meeting. The NPRM proposes to eliminate the rate floor and its accompanying reporting obligation, and the Order freezes the rate floor at $18 until it takes further action on the NPRM. JSI points out that this is just a draft NPRM and Order. Nothing will be finalized unless two commissioners vote yes at the May 18th meeting.
This eleventh-hour potential action on May 18th may be too late for companies that need to have local rate increases in place by June 1st under the current rules. Most state commissions also require customer notification of at least 30 days for local rate increases and therefore many companies may have already notified customers of the June 1 increase to $20.
JSI recommends that clients that receive High Cost Loop Support (HCLS), and are thus subject to the rate floor, consider their options and be aware of any state-specific issues regarding local rate increases. We will continue to monitor this proceeding and will be glad to discuss this issue with those that may be impacted.
Source: JSI e-Lert
A free webinar to provide additional guidance on the revised A-CAM offer
Just before Christmas, the FCC released its revised A-CAM offers for those carriers that initially elected model support by the November 1 deadline (see our December 22 e-Lert for details). “Glidepath adopters” are locked into the A-CAM at the original offer, however the remaining non-glidepath model electors carriers have until January 19, 2017, to decide whether or not to accept the revised offer. In addition to making this decision, all carriers electing A-CAM have several options and next steps that they should consider.
To better explain these options and next steps and answer any questions, JSI held a FREE webinar on January 12 for all A-CAM adopters. Our experts reviewed the pros and cons of electing A-CAM in light of the revised offers of support and provided additional guidance for clients that have yet to make this critical decision. We also covered decisions that A-CAM adopters must make, such as whether or not to tariff the Subscriber Line Charge (SLC) and whether to offer DSL on a retail basis to avoid having to pay the Federal Universal Service Charge (FUSC). We also discussed the requirements to submit geocoded data on all locations which were “newly served” in 2016.
JSI also has developed a template for those electing the A-CAM revised offer to use when submitting their letters to the FCC. The webinar went over our recommendations for properly filing the letter with the FCC as well. If you’d like a copy of the letter template, please email John Kuykendall.
If you would like a recording of the webinar, please contact Brenda Cordwell in JSI’s Maryland office at 301-459-7590.
With less than a week to go before the 2016 Presidential election, the FCC revealed the election results that rate-of-return carriers have been anxiously awaiting for most of the year – the Alternative Connect America Fund (A-CAM) election. The deadline for submitting notices of A-CAM election was on November 1, 2016, and according to the FCC’s November 2 Public Notice, 216 rate-of-return carriers elected A-CAM for 274 separate study areas. The most significant piece of news about the A-CAM election is that the electing carriers exceed the 10-year budget by more than $160 million annually. This means that the FCC may allocate an additional $50 million, and also will need to take “other measures that may be necessary.”
Ex Partes by Nov. 14
The FCC likely intends to decide how to move forward with altering A-CAM metrics and prioritizing electing carriers. Because of this, the FCC has encouraged carriers to submit ex partes by Monday, November 14.
As such, JSI strongly encourages its clients that elected the A-CAM to submit written ex parte letters or schedule meetings with the Wireline Competition Bureau. If you are interested in submitting an ex parte or scheduling a meeting, please contact Steve Meltzer, John Kuykendall, or Cassandra Heyne in JSI’s Maryland office at 301-459-5790.
Source: JSI e-lert
Expect a final release of the model soon and the start of 90-day election period
On July 25, 2016, the FCC released an Order addressing 147 comments containing 273 challenges to Alternative Connect America Model (A-CAM) coverage data that were filed in April. The FCC only granted 80 challenges, and denied or dismissed the remainder. With the A-CAM challenge process concluded, the FCC will soon release the final adjustments to the A-CAM and initiate the 90-day election period for rate-of-return carriers to decide if they want to accept model-based support.
The A-CAM Challenge Order was disheartening for many rate-of-return carriers that filed detailed and well-reasoned comments. However, it was anticipated that the bar would be very high for any rate-of-return carrier seeking to prove that a competitor does not have service in a census block absent the competitor revising its Form 477. As such, the FCC denied many of the challenges that were based on data gathered from a competitor’s online service availability tool or from drive tests/visual inspections of competitor’s equipment. The FCC did not find this evidence to be more compelling than the competitor’s certified Form 477. Also, requests made by rate-of-return carriers after March 30 to update June 2015 Form 477 data within their own study area were denied. On the other hand, comments filed by competitors requesting the FCC to use December 2015 Form 477 data and informing the FCC of revisions to their Form 477 data were accepted.
Seventy-six of the challenges filed were “split block” challenges, where a rate-of-return carrier identified blocks that are partially in its study area and partially in a neighboring ILEC’s study area. Additionally, JSI filed comments on behalf of 26 companies requesting the FCC modify the A-CAM to remove the impact of split blocks. In the A-CAM, the FCC disqualified entire blocks from support where the adjacent ILEC had reported 10/1 Mbps service using fiber-to-the home (FTTH) or cable modem in its own portion of the block. Split blocks also could cause carriers to be excluded from A-CAM support if the adjacent ILEC reported 10/1 Mbps in the shared census blocks which then caused the carrier to exceed the 90% 10/1 threshold.
In denying the challenges and JSI’s request, the FCC claimed that it is “not administratively possible” to delineate partial blocks as served or unserved; and added that “[t]here is no way in the current model architecture” to achieve an outcome where split blocks are acknowledged. The FCC rejected JSI’s argument that neighboring ILECs are subsidized and cannot traverse study area boundaries and stated that it made a “blanket decision” to exclude any block where any provider has FTTH or cable modem service. The FCC even assumed that since some rate-of-return carriers have CLEC affiliates, they can actually cross study area boundaries, so “the simplest course was to exclude census blocks that are partially served using FTTP or cable.”
Essentially, the FCC concluded that it will not modify the model to incorporate split blocks and even claimed that modification is unnecessary as there would be only limited impact overall in doing so. In the FCC’s eyes, the model is targeting support to where it is needed most and the split block impact is negligible and unlikely to be a determining factor of whether or not a carrier elects the A-CAM.
The road is now cleared for the FCC to move ahead with issuing the offer of A-CAM support to rate-of-return carriers. JSI anticipates this will happen this week or next. With decisions due 90 days later, it will be critical to have all the information you need to make the right decision for your company—and your customers. For more information about the A-CAM challenge results, contact John Kuykendall or Cassandra Heyne in the Maryland office at 301-459-7590. For A-CAM analysis, contact Steve Meltzer or Brian Sullivan, also in JSI’s Maryland office.
Source: JSI e-Lert