If the FCC plans to revise “core elements” of the Connect American Fund Phase II program -- such as the cost model or the challenge process -- it should reopen all core elements to eliminate aspects that are not competitively neutral, the American Cable Association said in meetings with aides to Commissioners Mignon Clyburn, Ajit Pai and Jessica Rosenworcel Thursday (http://bit.ly/1ijdiBs). For CAF Phase II competitive bidding to be successful, the maximum number of qualified providers need to participate, ACA said. Many of ACA’s small and mid-sized cable operators want to participate, but will only do so if “unreasonable barriers are eliminated,” ACA said. That’s why they're “heartened” to hear the commission is considering streamlining the eligible telecom carrier designation process, ACA said. ACA recommended several changes to CAF Phase II: non-ETCs should be able to apply to become an ETC after winning a bid, and groups that participate in the competitive bidding process should need only one ETC. ACA recommended a 60-90 day shot clock should be instituted for state decisions, and that states be prohibited from imposing requirements in addition to those adopted by the commission.

Price cap ILECs are concerned that the FCC might recommend an increase in the broadband speed requirement for Connect America Fund Phase II buildout (CD April 8 p1), without recommending concurrent changes in other terms for areas where carriers can elect cost model-based support, USTelecom and member ILECs told agency officials last week (http://bit.ly/1nn3HKG). The commission should “postpone commencement of a challenge process” to determine Phase II eligible census blocks until it decides on the speed requirements, USTelecom said. Any increase in speed requirements should also come with a revised 10-year term of support, USTelecom said, which would be “consistent with the substantially increased costs of deploying a higher-speed network.” Currently, Phase II support would be distributed over a five-year period. To the extent the agency proposes to increase the broadband public interest obligations by requiring high-cost eligible telecom carriers to offer high-speed broadband to schools and libraries, “such obligations should apply only to CAF II recipients who knowingly accept or decline funding with the associated obligations,” USTelecom said. Applying new obligations to ETCs who get legacy frozen support is “totally arbitrary,” it said. USTelecom also expressed concern about the schedule for phasing in the local rate floor. “The proposed $3.00 increase to be implemented January 2, 2015, followed 18 months later by another increase in excess of $3.00 will create rate shock among consumers and exceeds the threshold established in several states for the level of local rate increases that can be implemented without time-consuming and expensive state rate cases,” it said.

The FCC should implement updates to the existing high-cost rules “as soon as possible” to strike a balance between preserving and advancing universal service in areas served by rural rate-of-return regulated LECs, NTCA told aides to every commissioner except the chairman Wednesday, said an ex parte filing (http://bit.ly/1sNJzoX). “Such updates must ensure that predictable and sufficient support is available both for recovery of prior investments consistent with rules in place at the time those investments were made, and also for the additional future investments that are essential to ensure access by rural consumers to reasonably comparable services at reasonably comparable rates going forward.” The commission should proceed with “substantial caution” with respect to consideration of policies that might be based on the “purported presence of an ‘unsubsidized competitor,'” NTCA said.

AT&T’s “advanced discussions” on deploying gigabit fiber broadband to six North Carolina cities shows incumbent providers “have moved a long way in their thinking” about next-generation network deployments, said Gig.U Executive Director Blair Levin Friday during a speech at the Connecticut Gigabit Summit. AT&T said Thursday it was entering final negotiations for the deployments with the North Carolina Next Generation Network (NCNGN), an initiative among six municipal governments and four research universities -- Duke, North Carolina State, University of North Carolina at Chapel Hill and Wake Forest (CD April 11 p14). The AT&T negotiations don’t mean “we've hit a tipping point but we know a lot more about what any provider, including incumbents, need,” Levin, former manager of the National Broadband Plan, said in a prepared version of the speech. Although NCNGN’s “multi-community collaboration entailed upfront costs and a feeling of slogging that often accompanies multi-stakeholder coordination, it brought scale to the project,” Levin said. Since scale is important to providers, regional approaches “may be the only way some communities obtain an upgrade,” he said. NCNGN used a Request for Proposal (RFP) process to obtain feedback on the AT&T proposal from all community stakeholders, which “is a model that can be utilized by other communities throughout the country,” Levin said. The RFP process works only if local governments get flexibility, so “taking options off the table takes away the creativity and leverage local governments need to obtain new investments,” he said.

AT&T has begun working with special access customers to migrate them from legacy time-division multiplexing services to IP services. The carrier said Thursday it has negotiated multiple agreements enabling TelePacific Communications to “accelerate” its migration to IP-based services like Ethernet data and IP voice. AT&T asked the FCC to approve its tariff revision in December eliminating long-term discounts for special access services. After the FCC suspended the tariff for investigation (CD Dec 10 p1), AT&T withdrew it and announced it would refile soon with “more evidence” (CD Jan 9 p1). The company hasn’t yet refiled, a spokesman said. TelePacific CEO Dick Jalkut praised AT&T’s “flexibility,” in a statement. TelePacific is a California CLEC catering to business customers. An AT&T spokesman declined to disclose the terms of the contract. “Generally speaking, wholesale customers are at different stages on their migration path to IP,” he said. “Although many customers are already moving to replace TDM services with IP-based services, we understand that others may be on a longer migration path to IP and that, as a result, may want to continue to purchase TDM services in the near term. As our discussions continue, we will be flexible to ensure we are meeting the needs of our customers throughout the course of the entire TDM-to-IP transition. There isn’t a one-size fits all approach.” Willkie Farr attorney Thomas Jones, who represents CLECs, said without appropriate FCC regulation “designed to constrain AT&T’s market power” over wires connecting to business customers, “AT&T will always have the power to dictate the terms of sale for local transmission facilities purchased by its competitors.” Regardless of which electronics are connected to AT&T’s wires, “AT&T has powerful and understandable incentives to use its market power over wireline connections to businesses to slow roll innovation and diminish competition,” Jones told us. That ultimately leaves AT&T “in charge of the transition to IP and packet-based services,” Jones said. “This is, for all of us, the inconvenient truth of telecommunications policy.”

The FCC Wireline Bureau approved average schedule formulas as proposed by the National Exchange Carrier Association, it said in an order Thursday (http://bit.ly/1oR27VI). NECA proposed to revise the formulas for average schedule interstate settlement disbursements in connection with provision of interstate access services for July 1 through June 30, 2015. Formula changes will decrease settlement rates by about 1 percent, at constant demand, the order said.

Unregistered IP Relay users are making fraudulent calls to 911 “in an attempt to trick Public Safety Answer Points” into dispatching emergency services based on false reports, Sprint told FCC officials Wednesday, an ex parte filing said (http://bit.ly/1si915L). “Due to the risk of life and safety to first responders and the public,” the commission should “provide immediate relief on this matter” by “waiving the requirement to handle calls to 911 from unregistered IP Relay users,” Sprint said.

"The transition to fiber is already well underway,” Verizon’s David Young said in a blog post Friday (http://vz.to/1si8513). About 70 percent of Verizon’s footprint will soon be “fiberized,” said the vice president-federal regulatory affairs. Only 6 percent of homes in those areas still get service over copper lines, and keeping the copper network running is very expensive, he said. “Unfortunately, there are some who for a variety of reasons are trying to put the brakes on fiber upgrades, and by extension, fiber deployment,” Young said. “They think that the old copper networks should be kept indefinitely.” No existing telco will be able to invest in fiber if it’s forced to keep the old “redundant” and “costly” copper network up too, he said. “The social benefits of a transition to fiber must outweigh the preference that a few holdouts might have for a more familiar technology,” Young said, urging policymakers to be “courageous."

ILECs have failed to report and demonstrate the consumer benefits of the lower pole attachment rates, as required by the FCC’s 2011 pole attachment order, Florida Power and Light told agency officials Monday (http://bit.ly/1i4EkIY). The order gave “explicit direction” that the cost savings from lower pole attachment rates accrue to consumers, the company said. After three years, “ILECs have never demonstrated that those specific consumer benefits have been achieved,” it said. “Based on research and general industry knowledge, the benefits very likely have not been achieved.” The company is “considering filing a petition for declaratory ruling” to determine whether ILECs have delivered the promised consumer benefits, it said.

Vonage wants another extension in the deadline to comply with FCC rules banning fake ringing tones. “Vonage has made substantial progress” toward complying with the new rules, it said in a petition Wednesday (http://bit.ly/1i4C8B5). But “problems in the software” made it unable to meet the requirements by the April 2 deadline, it said. Another 15 days is all the VoIP provider needs, it said. It’s the third time Vonage has asked for an extension (CD March 4 p14).