FCC Defends Against Attacks by AT&T, Small Carriers, VoIP Providers, NASUCA
The FCC responded to attacks on several fronts, arguing in four briefs filed with the 10th U.S. Circuit Court of Appeals that it had authority to adopt the reforms in its landmark 2011 USF/intercarrier compensation (ICC) order. The commission defended Monday its new Access Recovery Charge for ILECs to recoup lost access fees, a rule governing ICC for CLEC-VoIP partnerships and a rule banning call blocking by VoIP providers. The reforms it adopted will let the commission meet its congressionally directed mandate to make broadband service available throughout the U.S., it said.
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The FCC devoted the most pages to responding to allegations by small carriers that the FCC broadly lacked authority to adopt the order. The carriers argued the FCC unlawfully gave federal universal service support to “information services,” and subjected those services to impermissible common carrier regulation under Title II. “Petitioners are wrong on both counts,” the FCC wrote (http://bit.ly/WTSSqz). The agency “reasonably determined” that Section 254 of the Telecommunications Act gave it authority to provide support for networks capable of offering both voice and broadband Internet access services, it said. The carriers’ assertion that Section 254 only refers to “advanced telecommunications and information services” provided to schools, libraries and rural health care providers “lacks merit,” the FCC said: “Such a reading” would render the section “meaningless."
The commission again defended its use of Section 706, which it said independently authorizes it to require USF recipients to deploy broadband-capable networks. Its offer of USF support to ILECs in exchange for a state-level commitment to deploy broadband was reasonable, and the agency offered sufficient support for its decision in the order, it said. “In any event, petitioners’ claims of disparate treatment overlook key facts,” such as the five-year limit on CAF funding, and the ability of competitive carriers to compete for Phase II support where a price cap carrier declines the funding, it said. The commission also defended its Mobility Fund auction process, and its elimination of the “wasteful” identical support rule.
The commission next responded to NASUCA’s argument that the Access Recovery Charge is unlawful (http://bit.ly/11fDUfZ). NASUCA argued the FCC failed to identify its legal authority to adopt the ARC in the order, and therefore can’t do so before the court. But the commission “fully explained the statutory basis for the ARC” in the order, it said. The ARC was “lawfully designed” to recover intrastate as well as interstate ICC revenue, the FCC said: Section 251(b)(5) “plainly covers intrastate telecommunications.” As for NASUCA’s claim that the FCC discriminated by letting ILECs determine “at the holding company level” how to allocate eligible recovery among subsidiary ILECs’ ARCs, the court can’t consider it because NASUCA never presented that claim to the agency, the FCC said. Even if it had, the FCC said its explanation was perfectly rational. “The rule spreads out ARC recovery over a broader class of customers and helps reduce burdens on the [Connect America Fund] at the same time it maintains consumer protections to ensure that end-user rates remain reasonable,” it said. “Although NASUCA may disagree with the FCC’s policy judgment, the agency’s balancing of factors is entitled to significant deference."
AT&T argued that the FCC offered no reasoned explanation for treating VoIP providers differently from wireless carriers when it adopted a rule governing CLEC-VoIP partnerships. “AT&T’s challenge rests on mischaracterizations of law and fact,” the FCC said (http://bit.ly/15YGENQ). The USF/ICC order “reasonably explained that its interim rule treats CLEC-VoIP partnerships differently from CLEC-wireless partnerships,” because VoIP and wireless services are “not similarly situated,” the FCC said.
The agency lawfully prohibited VoIP providers from blocking phone calls, it said in response to complaints by the Voice on the Net Coalition. VON argued the commission gave inadequate notice under the Administrative Procedure Act, engaged in unreasoned decisionmaking and exceeded its authority. The FCC rebutted each of these arguments, arguing it satisfied its notice obligations and “reasonably explained” why it banned the blocking of calls by VoIP providers. “The agency reasoned that, because the Order requires VoIP providers to pay access charges during a transition period, they might block calls to avoid paying high access charges, as other service providers had done in the past,” the FCC said. “This reasonable predictive judgment is entitled to this Court’s deference.”