The Regulatory Mix, TMI’s daily blog of regulatory activities, is a snapshot of PUC, FCC, legislative, and occasionally court, issues that our regulatory monitoring team uncovers each day. Depending on their significance, some items may be the subject of a TMI Regulatory Bulletin.
ISP Interconnection Agreements
FCC Chairman Tom Wheeler issued a statement on broadband consumers and internet congestion. The statement reveals that Commission staff has begun requesting interconnection agreement information from ISPs and content providers. He said that the FCC has already received the agreements between Comcast and Netflix and Verizon and Netflix and is in the process of asking for others. He emphasized that “what we are doing right now is collecting information, not regulating. We are looking under the hood. Consumers want transparency. They want answers. And so do I.”
Wheeler cited an email he recently received from a consumer questioning who was at fault in the Verizon-Netflix dispute and asking what the FCC could do about it. Wheeler said that the “bottom line is that consumers need to understand what is occurring when the Internet service they’ve paid for does not adequately deliver the content they desire, especially content they’ve also paid for. In this instance, it is about what happens where the ISP connects to the Internet. It’s important that we know – and that consumers know.”
The FCC extended until June 30, 2017, the existing freeze on Part 36 category relationships and jurisdictional cost allocation factors. As a result, price cap carriers will use the same relationships between categories of investment and expenses within Part 32 accounts and the same jurisdictional allocation factors that have been in place since the inception of the current freeze on July 1, 2001; rate-of-return carriers will use the same frozen jurisdictional allocation factors, and will (absent a waiver) use the same frozen category relationships if they had opted in 2001 to freeze those. The FCC concluded that extending the freeze would provide stability to carriers that must comply with its jurisdictional separations rules while the Joint Board continues its analysis of the jurisdictional separations process.
In a separate statement, Commissioner O’Reilly questioned the need to continue the jurisdictional separations rules at all in light of intervening regulatory and marketplace changes. He said the FCC should give “serious consideration” to sunsetting the rules altogether.
Pay Phone Rates
The U.S. Court of Appeals for the D.C. Circuit affirmed an FCC order rejecting petitions filed by various state pay phone associations seeking reversal of state commission decisions not to require refunds from Bell Operating Companies (BOCs) that did not have cost-based pay phone access line rates in effect. TMI Regulatory Bulletin Service subscribers see Bulletin dated March 7, 2013. The Court found that Congress granted discretion to the FCC to determine whether refunds would be required and that FCC reasonably exercised that discretion. It also rejected claims that §276(a) of the Communications Act established an absolute entitlement to refunds for periods in which the statute was violated. The Court said the Act was “silent” on the issue, suggesting the Congress intended to leave remedial discretion with the FCC. Thus the FCC could “fill Section 276’s gap with a reasonable approach to the refund question.”