Vol. 14

FCC Grants Approval for Sale of Verizon Subsidiaries to Fairpoint

Frontline “Closed for Business”

Congress Seeks FCC Reform as it Starts Investigation

FCC Amends Slamming Rules

Kansas Corporation Commission Concludes that VoIP Must Pay into USF

FCC To Review Policies and Procedures at Open Meeting

FCC Seeks Input on Consolidated’s Price Cap Conversion

FCC Seeks Comment on State TRS Certifications

News Bite

 The FCC has granted its approval for the transfer of Verizon’s local exchanges in Maine, New Hampshire and Vermont to Fairpoint Communications. Verizon currently has 1.5 million access lines in those three states.  Fairpoint provides wireline local and long distance telephone service in 18 states, including Maine, New Hampshire and Vermont.  However, there is no overlap between Fairpoint and Verizon exchanges in the affected areas.  In granting its consent to the transaction, the FCC concluded that because the companies do not compete in any of the relevant local exchanges it is unlikely the merger would result in any anticompetitive effects or other public interest harms.  Rather, the Commission found that the transaction is likely to produce public interest benefits, including the accelerated deployment of broadband throughout the region.  The Commission, however, did indicate that as a result of this transaction, Fairpoint would be considered a Bell Operating Company on a going forward basis and would have to comply with the requirements imposed upon BOCs by the Communications Act as well as with the Commission’s Computer II Inquiry requirements.

For additional information, please contact Howard Shapiro.

This week, Frontline Wireless apparently dropped out of the upcoming 700 MHz auction, issuing a brief statement, “Frontline is closed for business at this time. We have no further comment.”  Frontline was the most vocal proponent and powerful lobbying force for the use of 700 MHz spectrum to create a wholesale nationwide broadband network to be used by both commercial and public safety operators.  Frontline was politically and financially well connected, fronted by such industry veterans as former FCC Chairman Reed Hundt, former National Telecommunications and Information Administration head Janice Obuchowski, and Haynes Griffin, co-founder of Vanguard Cellular Systems, Inc.  Frontline’s apparent demise raises further questions about who, if anyone, will bid on the D block and about the substantial hurdles of creating a nationwide public/private partnership between the D block licensee and the National Broadband Public Safety Licensee.  The FCC has not yet determined what it will do if no bidder is willing to pay the $1.33 billion block-specific reserve price of the D block license. 

For additional information, please contact Greg Whiteaker.

The House Energy and Commerce Committee has sent a letter to FCC Chairman Kevin Martin notifying him that it plans to investigate the Commission concerning its regulatory procedures to determine if the FCC is conducting business in an open and transparent manner.  The letter tells the Chairman to expect a document request and email investigation.  The investigation stems from recent complaints that the Chairman’s lack of notice about what items will be considered hinders public input.

For additional information, please contact Ken Johnson.

The Federal Communications Commission has amended its rules concerning third party verification of a consumer’s intent to switch its local or toll service provider.  The new rules, which are intended to alleviate customer confusion, will require third party verifiers to state the date (but not the time) of the verification call during the verification process and to directly state during the call that the carrier change can go into effect once the verification has been completed, even where the consumer has additional questions for the carrier’s sales representative.  Under the amended rules, third party verifiers will be required to convey explicitly to customers that they are consenting to a change of carrier and not a mere service upgrade.  Verifiers will also be required to verify the customer’s understanding that long distance service includes international service.

For additional information, please contact Michael Bennet.

The Kansas Corporation Commission has determined that VoIP providers that are interconnected with the public switched telephone network must pay into the Kansas state universal service fund.  Kansas will require VoIP providers to use the VoIP interstate safe harbor developed by the FCC.  The Kansas decision follows a U.S. Court of Appeals decision upholding the FCC’s right to task VoIP providers with universal service contributions.

For additional information, please contact Ken Johnson.

The FCC will hold an open meeting commencing at 9:30 a.m. EST on Thursday, January 17, 2008 to focus on the agency’s strategic plan and to undertake a comprehensive review of FCC policies and procedures. The meeting will be divided into four panels that will feature presentations by the FCC’s Managing Director and by each of the FCC’s Bureau Chiefs.

For additional information, please contact Howard Shapiro.

 The FCC has released a Public Notice seeking comment on a request by Consolidated Communications Holdings, Inc. to convert its rate-of-return cost study areas to price cap regulation no later than July 1, 2008.  Consolidated appears to be seeking this change so that it can offer more competitive special access rates.  With the proposed change, Consolidated will receive less high cost support.  Comments on the request are due February 4, 2008 and reply comments are due February 19, 2008.

For additional information, please contact Ken Johnson.

The FCC has released a Public Notice seeking comment on state certifications that they meet the FCC standards governing the provision of telecommunications relay services (TRS).  All 50 states plus a number of territories are seeking certifications that will last from July 26, 2008 until July 25, 2013.  Comments on the state requests are due February 11, 2008 and reply comments are due February 26, 2008.

For additional information, please contact Ken Johnson.

***  The National Exchange Carrier Association (NECA) has announced the reelection of Robert Eddy and Robert Orent as Chairman and Vice Chairman, respectively, of the NECA Board of Directors.  ***

For additional information, please contact Ken Johnson.