The Regulatory Mix, TMI’s daily blog of telecom related regulatory activities, is a snapshot of PUC, FCC, legislative, and occasionally court issues that our regulatory monitoring team uncovers each day. Depending on their significance, some items may be the subject of a TMI Briefing.

FCC Association Common Line Tariff

FairPoint Communications, Inc. filed a petition with the FCC for waiver of the requirement in §69.3(e)(9) of the Commission’s rules requiring that a carrier intending to file its own Carrier Common Line tariff notify the National Exchange Carrier Association (NECA) by March 1 of the year in which the tariff will become effective.  FairPoint said that its rate-of-return LECs are regulated similarly to carriers that elect the FCC’s Alternative Connect America Fund Cost Model (A-CAM) in that they no longer receive cost-based support for carrier common-line elements, yet remain under rate-of-return rules for traffic-sensitive elements.  FairPoint seeks this waiver so it may withdraw its rate-of-return ILECs from the NECA Common Line pool simultaneously with such carriers electing the A-CAM.  FairPoint also requests a waiver of any other rules as necessary to effectuate its withdrawal from the NECA Common Line pool.  Comments are due 10/14/16 and reply comments are due 10/31/16.

FCC Tools For Rate-of-Return Carriers

The FCC announced that the Universal Service Administrative Company (USAC) has published two resources to aid rate-of-return carriers in determining their Capital Investment Allowance (CIA), which sets a maximum for capital investment expenses that a rate-of-return carrier may include for purposes of calculating High-Cost Loop Support (HCLS) and Connect America Fund Broadband Loop Support (CAF BLS).  The CIA will first apply to investment made in 2017.  The first resource shows each carrier’s allowance had CIA had been applied to each carrier’s 2015 investment.  The second is a worksheet that allows a carrier to calculate the CIA based on its own inputs.  Using this worksheet, a carrier may replicate the illustrative 2015 results, calculate its 2017 allowance, or test alternate investment plans.  USAC has also published additional documentation of the CIA methodology to accompany the illustrative results and template.  The illustrative results, the template, and the documentation of the methodology are available here.  The FCC emphasized that the 2015 results are illustrative only and that allowances applicable in 2017 and subsequent years will be determined based on carrier data for those years.

FCC Broadband Deployment In Rate-of-Return (ROR) Carrier Census Blocks

The FCC’s Wireline Competition Bureau released a spreadsheet to assist rate-of-return (ROR) carriers in deciding whether to elect the voluntary path to model-based Connect America Fund support.  The spreadsheet provides the following information for each incumbent telephone company rate-of-return study area: (1) census blocks where an unsubsidized competitor reports the deployment of voice service and broadband Internet access service of 10 Mbps upstream/1 Mbps downstream; (2) the name of the unsubsidized competitor(s) reporting deployment in that block; (3) the technology used by each competitor; and (4) the percent of the census block covered by the incumbent rate-of-return carrier; and the land area within the census block in the carrier’s study area. This file can be found here. This information is based on the December 2015 FCC Form 477 data.  The Bureau emphasized that the data is being provided as a tool for rate-of-return carriers wishing to analyze the possible competitors that may participate in the challenge process in the future; its release does not commence the challenge process, for which a separate public notice will be issued in the future.

The Bureau also released an updated version of the study area deployment figure for each individual rate-of-return carrier.  Further updates will be made based on corrections to FCC Form 477 deployment figures received by October 7, 2016.  However, due to the need to finalize other calculations based on currently available information, any additional changes to deployment figures based on corrected FCC Form 477 data will not be incorporated in the operating expense limitation for 2017, capital investment allowance for 2017, or the broadband deployment obligations.

California PUC Reform

The Governor signed legislation enacting reforms to the Public Utilities Commission that were part of a comprehensive package announced earlier this year.  The reforms will help open and expand participation in PUC proceedings, improve safety, and reform ex parte rules.  Among other things, the changes:

• Reform and expand rules regarding ex parte communications to require commissioners and interested persons to disclose and promptly post the content of ex parte communications online in rate setting proceedings. 
• Require transcripts to be made publicly available promptly.
• Require documents distributed to service lists be docketed.
• Establish thresholds for the reasonable and timely resolution of proceedings.

Two additional bills stalled in the Legislature.  The Governor called on the PUC to use its existing authority to:  appoint an Ethics Ombudsman; establish a web portal for the Public Advisor to receive public complaints and comments; create a streamlined process for releasing information to the public; improve coordination with other state agencies and departments and the PUC’s presence outside of San Francisco; and work with the California Research Bureau to study the governance of telecommunications service.  Click here for the Governor’s News Release and links to the bills.

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