Telecom Interests Backing Extension of Jurisdictional Separations Freeze

Telecom industry interests are supporting the FCC's proposal for extending the current jurisdictional separations freeze and allowing RLECs that chose to lock in their category relationships in 2001 a chance to opt out, in docket 80-286 comments. Commissioners unanimously approved the Further NPRM in July (see 1807180059). Monday was the comment deadline, with replies and state public utility commission initial comments due Sept. 10 (see 1808200025).

NARUC said the FNPRM is proposing changes to the Part 36 separations procedures without first consulting with the Separations Joint Board, as required. It also said any extension would affect taxpayers, state programs, broadband service rollouts and especially smaller rural provides. It again backed extending the current freeze for no more than two years (see 1807180018) and said such a short extension shouldn't be released without first getting recommendations from joint board federal and state members.

Extending the current lock of jurisdictional separations category relationships and cost allocation factors for rate-of-return (RoR) ILECs makes sense since all the reasons for that freeze started in 2001 and remain true today, USTelecom said. It said the system of jurisdictional relationships is "increasingly irrelevant" in the modern converged communications services market and applies to a small subset of regulated lines. The association said if the FCC opts to have carriers unlock and then relock their category relationships, the new freeze should be for five years.

The FCC was right to adopt the category relationships freeze on an optional basis, but that was intended to be temporary pending separations modification and in the subsequent 17 years, carriers that elected it haven't been able to withdraw their elections, ITTA said. It said letting carriers unfreeze and refreeze their categories would give carriers more certain separation results, pushing for letting carriers refreeze their category relationships six months or so after the period for optional unfreezing of categories concludes. It sought to let RoR carriers that didn't lock their categories in 2001 relock them now.

NTCA said the ongoing shift to IP-based services means the underlying separations treatment of networks and services is evolving, "leaving no need for sweeping and intrusive regulatory intervention to adjust the separations framework itself." It said regulatory ratemaking and cost recovery constructs that significantly involve separations treatment are dwindling, and major separations changes would lead to regulatory uncertainty. The group backed extending the freeze for 15 years. It said a one-time unlock "represents a simple, straightforward exercise" letting companies recalibrate "extremely outdated" frozen categories. WTA also backed the 15-year freeze and one-time unfreeze. It backs letting all RoR carriers have a one-time unlock of their 2001 category relationships and a lock of recent category relationships.

The National Exchange Carrier Association wants a 15-year extension of the current category relationships freeze and approval of letting RoR LECs that chose to freeze their categorizations the ability to unfreeze them. NECA said RLECs in its traffic sensitive pool should be required to notify it of the decision to opt out of the categorization lock by March 1 of any year such elections are allowed, so it can take resulting revenue requirement changes into account when preparing its annual access tariff filings.

Sixteen rural LECs said letting RoR carriers unfreeze their frozen category relationships makes sense given the proposed length of the extension and the time it will take companies to study the unfreezing effects. They said the FCC should clarify that rules let carriers that have frozen category relationships directly assign costs to new categories introduced following the inception of the separations freeze and should allow carriers with frozen category relationships to choose among multiple approaches for determining and preventing double recovery of switched access-related costs. They urged the FCC to allow carriers not presently subject to a category relationship lock to elect to do so based on current category relationships. The 16 include ATC Communications, Chickasaw Telephone, Nortex Communications and Volcano Telephone.