Adam Bender

The most important FCC aides on telecom are Wireline Bureau Chief Dana Shaffer and Wireless Bureau Chief Fred Campbell, along with Chairman Kevin Martin’s wireline adviser Ian Dillner and wireless adviser Aaron Goldberger, said sources including current and former FCC staff.

“We don’t know and don’t care” what content moves over the Comcast network, Comcast External Affairs Vice President Joseph Waz said Wednesday at the Quello Communications Law and Policy Symposium. Waz was responding to a question about recent criticism by FCC Chairman Kevin Martin of Comcast network management practices (CD April 23 p1). “I don’t know how much more clear we can be about this,” Waz said. Comcast manages bandwidth-intensive protocols like P2P, not applications, he said. Comcast’s decision to start using technology-agnostic management is not an admission that it has discriminated against content, he said. Waz stressed that the new system will be in place by year end. “If there’s any lack of clarity on that, I'm glad to have the opportunity to restate what we said in our press release.” On the panel, Waz and Verizon’s Link Hoewing said industry cooperation is the way to address network management concerns. A Comcast- and BitTorrent-planned Internet Engineering Task Force workshop, as well as Comcast and other ISPs’ collaboration in the Distributed Computing Industry Association P4P Working Group, prove regulation isn’t needed to thwart network management abuses, Waz said. “We're not going to have problems working through these issues if we can work together,” Hoewing agreed. The technology industry has faced congestion problems before, he said, citing the “World Wide Wait” of the ‘90s and FTP congestion problems before that. Adding capacity is one way to fight network congestion, but not the whole answer, he said. Also on the panel, Hoewing dismissed condemnations of U.S. broadband deployment. The U.S. has a national broadband strategy, he said. “We actually have consciously, over a period of years said, ‘We're going to encourage platform competition,'” he said. That “is a national broadband policy.” There’s still progress to be made, he said, noting rural areas as an example: “But by and large there is a national policy that has been working pretty well.”

Contrary to what AT&T claims, the FCC still uses cost- allocation data it requires of the company, said the Ad Hoc Coalition in an ex parte letter to Commissioner Robert McDowell. Ad Hoc represents 21 major customers of telecom companies, including financial, manufacturing and other big businesses. The FCC has until Thursday to rule on an AT&T petition seeking relief from the accounting rules, which require that Bell companies keep records separating interstate and intrastate costs. In an interview Tuesday, Ad Hoc lawyer James Blaszac attacked recent statements by Bob Quinn, AT&T regulatory senior vice president, whom Blaszak debated on the issue Monday afternoon in McDowell’s office (CD April 22 p5). If the FCC no longer used allocation data, it wouldn’t have forced the Bells to keep collecting it in an order last August, Blaszak said. The August order, which let Bells combine their local and long distance divisions, says Bells remain subject to “a number of legal obligations,” particularly FCC “accounting and cost allocation rules and related reporting requirements.” And the FCC will need such data to complete proceedings under way on special access and intercarrier compensation, Blaszak said. The FCC also should keep getting the data to monitor price cap regulation efficacy, he said. Quinn told us Monday that the data don’t accurately measure for that purpose, because the percentages used to separate costs have been frozen since a 2001 Federal- State Joint Board on Jurisdictional Separations reform proceeding began. Data accuracy is an issue for the separations proceeding, not this forbearance petition, said Blaszac. Discussing Monday’s debate, Blaszac said it was unclear from McDowell’s questions which issues preoccupy him. McDowell will be an “important vote,” he said.

The Public Safety Spectrum Trust is “the dog” and Cyren Call “is the tail,” PSST Chairman Harlin McEwen emphatically declared Tuesday at a Wireless Communications Association panel. The FCC has voiced concern about the relationship between D-block private licensee PSST and private carrier advisor Cyren Call (CD April 17 p1). “Our goal is not about [Cyren],” McEwen said. “It’s to get a public safety network.”

Commissioner Robert McDowell held a debate on an AT&T forbearance petition at 4 p.m. Monday in his office, pitting AT&T against petition rival the Ad Hoc Coalition, industry sources told us. McDowell is undecided whether to grant the petition, which seeks relief from cost-allocation rules that require Bell companies to keep records that, among other tasks, separate interstate and intrastate costs (CD April 21 p13). Chairman Kevin Martin has circulated two draft orders, one approving and one denying. McDowell is seen as the swing vote, with Democratic commissioners Michael Copps and Jonathan Adelstein opposing forbearance. Commissioner Deborah Tate’s position has been unclear. The petition has seen opposition by states, and she once was state commissioner. But states may not sway her this time, Bob Quinn, AT&T regulatory affairs senior vice president, said in an interview. In AT&T’s 22-state region, only three state commissions have filed opposition, he noted. Each of those oppositions echoed an argument by the Federal-State Joint Board on Jurisdictional Separations saying AT&T should wait for the Joint Board to complete an ongoing separations reform proceeding, he said. That proceeding has been pending for eight years, he said. Also, AT&T is working with states on other concerns, Quinn said. For example, “Florida asked us to file allocated data in the event that we come in for a storm recovery cost proceeding,” he said. “We said that we would do that.” If a state requires certain data, AT&T will still provide it, he said. AT&T argued that and other points Friday in a 10-page letter sent the FCC. Opponents “have not identified a single actual, current Commission use of these cost allocations as they relate to AT&T,” AT&T said in the letter. AT&T terms cost-assignment rules outdated vestiges of rate-of-return regulation to which price-cap regulated AT&T is no longer subject. Foes’ “entire case is based on speculation” that allocations may be used in a future proceeding, it said. That’s no basis for denial, it said. “In the highly unlikely event the Commission somehow found a need for allocated costs in the future, AT&T would comply with any lawful requirement to that end within a reasonable time frame.”

A “theoretical link” between special access and an AT&T forbearance petition due later this month might mean political hot water for Commissioner Robert McDowell, a lawyer involved in the AT&T proceeding told us. AT&T seeks relief from cost-assignment rules requiring Bell companies to keep records that, among other tasks, separate interstate and intrastate costs (CD April 15 p8). Two orders are circulating on the eighth floor, one to approve and one to deny. McDowell is seen as the swing vote on the AT&T petition. As a Republican, he is seen as favoring forbearance. However, some data AT&T wants to stop collecting could be used in a special access action McDowell and other commissioners want to resolve, the lawyer said. And McDowell has called for more special access data in public statements, he said. The conflict theory is “plausible,” said Stifel Nicolaus analyst David Kaut. But McDowell might be able to work with Commissioner Deborah Tate on a compromise carving out data useful to the special access proceeding, he said. Tate’s position on AT&T forbearance also is unclear, Kaut said. Republican Tate is seen as likely to grant forbearance. However, as a former state commissioner, she could embrace states’ opposition, he said. Then again, the apparent conflict might not be the “dilemma” some think, said Earl Comstock, an industry consultant. One shouldn’t assume “all Republicans vote for AT&T,” he said. If McDowell deems the AT&T data useful for the special access proceeding, he said, he'll vote to deny forbearance. Meanwhile, an FCC source pooh-poohed the theory, saying the forbearance and special access proceedings are “a little too disjointed” to figure in McDowell’s decision. Still, the McDowell office hasn’t made up its mind about the AT&T petition, the source said.

Subsidy caps and reverse auctions proposed to rein in a rapidly growing Universal Service Fund split wireline carriers by geography, in comments to the FCC. While Verizon urged a high-cost cap and auctions, rural groups said the reforms would undermine broadband deployment efforts. Meanwhile, wireline groups didn’t contest a proposal to kill the identical support rule. Wireline groups also expressed mixed feelings on a Universal Service Joint Board proposal to expand high-cost support to broadband and wireless.

States are urging the FCC to reject AT&T accounting rules forbearance (CD April 15 p8). In a Tuesday letter to FCC commissioners, state members of the Federal-State Joint Board on Jurisdictional Separations said granting the petition would “dump existing separations procedures in half of the country.” Commissioners also got mail from the Ohio Public Utilities Commission, which said granting forbearance would remove safeguards the FCC implemented in an August order.

Eighth floor lobbying is heating up over an AT&T forbearance request due for April 24 FCC review. AT&T seeks relief from cost-assignment rules requiring Bell companies to keep records that, among other tasks, separate interstate and intrastate costs (CD April 9 p9). Wednesday to Friday, AT&T lawyers paid five visits to commissioner offices, including meetings with Commissioners Michael Copps and Deborah Tate, as well as with aides to Copps, Tate, and Commissioner Jonathan Adelstein. Also Friday, the opposition united against AT&T in a rendezvous with Copps and aide Scott Deutchman. CompTel, NuVox, Covad, T-Mobile, Sprint Nextel, XO Communications and the Ad Hoc Telecommunications Users Committee sat in. Monday, the National Telecommunications Cooperative Association entered the fray, opposing forbearance, according to an ex parte. Cost allocation rules from which AT&T seeks forbearance protect “rural consumers and rural incumbent local exchange carriers (ILECs), who depend on AT&T’s facilities to provide reasonably comparable services to their customers,” NTCA said. “Forbearance will cloud ILECs ability to negotiate rates, terms and conditions with AT&T” that are just, reasonable and non-discriminatory, it said.

The Internet voice industry is divided on a popular proposal to base universal service fund contributions by carriers on phone number count rather than interstate revenue. Vonage and other interconnected VoIP carriers support a numbers approach as making the fund technology- neutral. Others say a numbers world would force overhaul of business models at Google’s GrandCentral and other enhanced service providers. That shouldn’t be, Feature Group IP CEO Lowell Feldman said in an interview. Ten-digit phone numbers represent “1970 technology, not 2008 technology,” he said. “The numbers scheme is really a sleight of hand to try to force the industry to always use numbers.”