What will the FCC be tackling next?
Chairman Pai’s theme for the November 22, 2019 Open Meeting is “Protecting National Security and Public Safety.” This is a reference to two of the items: one that would prohibit the use of any federal universal service funds to purchase equipment or services from a company that poses a national security risk and another that would adopt vertical location (z-axis) accuracy metrics for wireless calls to help first responders identify a 911 caller’s location in a high-rise building. The rest of the agenda items return to the FCC’s recurring theme of updating its rules to reflect the changing marketplace. This includes a proposal that will update the way the FCC finances the Internet Protocol Captioned Telephone Service (IP CTS) portion of the federal TRS contribution factor and another to modernize the rules addressing when a provider can be barred from receiving federal universal service funds. But for most telecom providers, particularly CLECs, the headlining item is the FCC’s proposal to eliminate still more of the unbundled network element (UNE) requirements contained in its Part 51 rules. These rules, stemming from the 1996 Telecommunications Act, require that ILECs make portions of their networks available to competitors on an unbundled basis at regulated, cost-based rates. While the FCC has been incrementally chipping away at these elements over the last 23 years, I think most CLECs will find this latest proposal to be comprehensive, but not in a good way. So, let’s get right to that proposal.
Unbundling and Resale Rules: In July of this year, the FCC agreed to forbear from enforcing price cap ILEC’s unbundling obligations for DS1 and DS3 dedicated interoffice transport between price cap ILEC wire centers within a half mile of competitive fiber network deployment. It also granted forbearance relief to price cap ILECs throughout the entirety of their service areas from: the obligation to unbundle two-wire and four-wire analog voice-grade copper loops, including the attached equipment; and avoided-cost resale obligations.
Building on this momentum, the draft order proposes and seeks comment on removing UNE requirements for:
- DS1 and DS3 loops in locations deemed competitive for business data services, with an exemption for DS1 loops used to provide residential broadband service and telecom service in rural census block areas;
- DSO loops in urban census blocks (used for both residential and enterprise services);
- Narrowband voice-grade loops nationwide (including analog loops, 64kbps voice-grade channels over last-mile fiber loops when an ILEC retires copper, and the TDM capabilities of hybrid loops);
- Subloops in the particular instances or geographic areas where the underlying loops no longer have to be provided as a UNE;
- Dark fiber transport in wire centers within a half-mile of alternative fiber;
- Network interface devices (NIDs); and
- Standalone operations support system (OSS) unbundling (i.e., when used for purposes other than managing UNEs)
The FCC also proposes to extend forbearance from the avoided cost resale requirements to non-price cap ILECs.
The draft proposes a three-year transition plan for existing customers and seeks comment on whether a six-month transition period for new orders should also be included.
IP CTS Support: The FCC has authorized support of IP CTS by the Interstate Telecommunications Relay Services Fund (TRS Fund) since 2007 using an interim method. Under this method, all the costs of providing IP CTS were paid by contributors to the TRS Fund based only on their interstate telecommunications revenues—even though IP CTS provides captioning for both interstate and intrastate telephone calls. The FCC is now proposing to adopt a permanent funding method by amending its rules to require that TRS Fund contributions to support IP CTS be calculated based on the total interstate and intrastate end-user revenues of each telecommunications carrier and VoIP provider. As a result, TRS Fund contributions would be required from providers of intrastate-only telecommunications and VoIP services.
Specifically, every carrier providing interstate or intrastate telecom services (including both interconnected and non-interconnected VoIP service providers) would contribute to the TRS Fund (1) for the support of TRS other than IP CTS on the basis of interstate end-user revenues, and (2) for the support of IP CTS on the basis of interstate and intrastate revenues. According to the FCC, the total contributions needed to support the TRS Fund will not be affected, but the percentage of interstate end-user revenues on which TRS Fund contributions are based will decline substantially. The proposal calls for the new requirements to take effect starting with TRS Fund Year 2020-21.
Wireless E911 Location Accuracy Requirements: This item is part of the FCC’s ongoing effort to improve its wireless E911 location accuracy rules. Previously, the FCC established accuracy metrics for horizontal location (x/y axis) information, but it deferred a decision on adopting a vertical location (z-axis) metric pending further testing. In March 2019, based on test results and public comment, the FCC proposed a z-axis location accuracy metric of plus or minus 3 meters for 80 percent of indoor wireless E911 calls. The item would:
- Adopt the proposed z-axis metric;
- Require wireless carriers to validate through testing that their z-axis technology meets this metric;
- Require carriers to deploy z-axis technology that meets this metric in the top 25 markets by April 3, 2021 and in the top 50 markets by April 3, 2023; and
- Extend privacy protections to z-axis data conveyed with 911 calls.
The item also contains a further notice of proposed rulemaking seeking comment on further tightening the z-axis metric over time and ultimately requiring wireless carriers to report the caller’s specific floor level and alternative deployment milestones for z-axis and dispatchable location technologies.
Protecting National Security: The FCC has taken a number of targeted steps to protect the nation’s communications networks from potential security threats. This item is intended to take the next step in ensuring that the public funds in the USF are not used in a way that undermines or poses a threat to national security. As such, the FCC is proposing to adopt a rule that prospectively prohibits the use of USF funds to purchase or obtain any equipment or services produced or provided by a company posing a national security threat to the integrity of communications networks or the communications supply chain. It would initially designate Huawei Technologies Company and ZTE Corporation as covered companies for purposes of this rule and establish a process for designating additional covered companies in the future.
The item also proposes to:
- Require USF recipients that are eligible telecommunications carriers (ETCs) to remove existing equipment and services produced or provided by covered companies from their networks;
- Establish a reimbursement program to offset reasonable transition costs and make the requirement that ETCs remove covered equipment and services contingent on the availability of a funded reimbursement program; and
- Adopt an information collection to help assess the extent to which ETCs have Huawei and ZTE equipment in their networks as well as the costs associated with removing and replacing such equipment.
Suspension and Debarment: As part of its efforts to protect against fraud, waste, and abuse, the FCC has already implemented rules for its USF programs that suspend or debar those convicted or found civilly liable for certain misconduct related to the USF programs. It now proposes to expand these rules by adopting the Office of Management and Budget’s Guidance for Governmentwide Debarment and Suspension. These new rules would be applied to the four federal USF programs, the TRS programs and the National Deaf-Blind Equipment Distribution Program (NDBED) program. These new rules will give the FCC more flexibility to suspend or debar bad actors, including the ability to consider a broader range of misconduct and to immediately suspend entities when necessary to protect the public interest. They would also require that participants verify that any entity they intend to do business with (such as a service provider or subcontractor) is not excluded from participating in federal programs.
A varied agenda with widespread impact that is bound to get a lot of attention. #CheckingIn@TheFCC