In response to intense industry lobbying, the FCC issued a Report and Order on September 18, 2013 clarifying and somewhat narrowing its upcoming special access data request.  While the key changes are described below, it is important to remember that there is still not a specific due date for parties to file their data, since the Office of Management and Budget’s (OMB) has yet to approve the Commission’s data request.   The Commission still anticipates approval will be coming soon and it will begin collecting data towards the end of this year or early next year.  Here are the key modifications:

I. Purchasers Subject to Commission Jurisdiction

The Special Access Data Collection Order originally stated that all purchasers of dedicated service must supply certain information as part of the data collection.  A purchaser is a competitive provider or an end user, which is defined as a “business, institutional, or government entity that purchases a communications service for its own purposes and does not resell such service.”  

As part of the data they are expected to file, purchasers are required to report their expenditures for dedicated service under tariff and non-tariff plans and provide details on the terms and conditions associated with those plans.  However, the Commission is concerned that this data requirement applies to all entities under its jurisdiction, including potentially hundreds of thousands of license and authorization holders, information service providers, or others that are subject to the Commission’s jurisdiction but otherwise are simply consumers of dedicated services and are unfamiliar with, and perhaps completely unaware of, the Commission’s requirements and proceedings involving the regulation of ILECs in price cap areas. 

Thus the Commission now states that it will exclude from supplying special access data any entity that is subject to its jurisdiction only because it falls into one of the following categories and is not a true common carrier purchaser of special access:     

• An end user that is an information service provider;
• An equipment authorization holder regulated under Parts 2 and 15 of the Commission’s rules;
• An accounting authorization holder providing maritime and maritime mobile-satellite radio services regulated under Part 3 of the Commission’s rules;
• An experimental radio authorization holder regulated under Part 5 of the Commission’s rules;
• A commercial radio operator regulated under Part 13 of the Commission’s rules;
• An antenna structure registration holders regulated under Part 17 of the Commission’s rules;
• A television or radio broadcaster regulated under Part 73 of the Commission’s rules;
• A holder of authorizations issued pursuant to Part 74 of the Commission’s rules such as experimental radio, auxiliary, special broadcast and other program distribution service authorizations;
• A maritime service authorization holders regulated under Part 80 of the Commission’s rules;
• An aviation service authorization holders regulated under Part 87 of the Commission’s rules;
• A private land mobile radio service authorization holder regulated under Part 90 of the Commission’s rules except for holders of authorizations under Part 90 for the provision of point-to-point fixed microwave services and authorizations in the Wireless Broadband Services frequency band, 3650-3700 MHz;
• A personal radio service authorization holder regulated under Part 95 of the Commission’s rules; and
• An amateur radio service authorization holder regulated under Part 97 of the Commission’s rules.

The Commission anticipates that, with these new exclusions it will limit the number of special access data providers to about 6,500, compared to hundreds of thousands of responses that were expected without these exclusions.

II. Price Cap Areas

The Commission notes that it is interested in receiving data for special access in price cap ILEC areas only, since ILEC special access under price caps is under review in this proceeding.  Therefore, the Commission clarifies that:

Entities providing or purchasing special access only in areas where the ILEC is subject to interstate rate-of-return regulation are not required to provide data and information in response to the data collection.

Likewise, an entity providing Best Efforts Business Broadband Internet Access Service, only in areas where the ILEC is subject to interstate rate-of-return regulation is not required to submit data.  A Best Efforts Broadband Internet Access Service makes no guarantees regarding the speed at which data will reach the recipient.  

The Commission clarifies that this data collection will cover only special access provided or purchased and Best Efforts Business Broadband Internet Access Service provided if the ILEC was subject to price cap regulation in the area at any point during the relevant reporting periods, 2010 or 2012.

III. Form 477 - Local Telephone Competition and Broadband Reporting

 The Commission states that it intends for its market analysis of price cap ILEC special access to be comprehensive and include all providers with connections to locations that are owned, leased under an Indefeasible Right of Use (IRU) agreement, or in the case of CLECs, obtained as an Unbundled Network Element (UNE) to provide a dedicated service, and covered entities providing Best Efforts Business Broadband Internet Access Service.

Thus, the Commission states that all entities required to submit Form 477 because they provide broadband connections to end user locations in price cap areas must—at a minimum—submit a certification in this special access data collection. Specifically, entities required to report broadband connections to end user locations on the Form 477 must certify whether they are a provider, purchaser, a covered entity providing Best Efforts Business Broadband Internet Access Service, or none of the above as part of this data collection.  If the Form 477 filer is also a provider, purchaser, or a covered entity providing Best Efforts Business Broadband Internet Access Service as defined in this collection, then it must also respond to all the relevant questions for that category of entity. If the Form 477 filer does not fall within any of those categories, e.g., an entity only providing Best Efforts Business Broadband Internet Access Service in interstate rate-of-return areas and not purchasing dedicated service, then the Form 477 filer need not submit any information or data beyond its certification.

IV. Location Issues

The Commission clarifies that providers are required to report Locations with Connections to help it identify: (1) facilities that can, or could, be used to provide a dedicated service; and (2) the demand for dedicated service.  Regardless of what market analysis it adopts, this information is critical in determining how and where competition for special access services exists or is likely to develop.  A connection is defined as a communication path between a location and a provider’s network that provides a dedicated service or is capable of providing a dedicated service. 

A. CLECs

CLECs other than cable system operators must report all locations with idle and in-service connections that they own or lease as an IRU, regardless of the type of service provided over the connection.

CLECs must report locations with connections obtained as a UNE to provide a Dedicated Service. This includes those UNEs obtained to provide a service that incorporates a dedicated service within the offering as part of a managed solution or bundle of services sold to the customer. 

B. Cable Companies

Outside their franchise areas (FAs), cable operators must follow the same reporting guidance on all locations with connections, for the same reasons, as the non-cable CLECs described above.  However, the Commission requires cable system operators to report locations in their FAs with connections they own or lease as an IRU differently.

Cable system operators within their FAs report locations based on the type of connection. They must report those locations with connections owned or leased as an IRU that are connected to a node (i.e., headend) that has been upgraded or was built to provide Metro Ethernet (or its equivalent) service. They must report locations with these connections regardless of the service provided over the connection or whether the connection is idle or in-service.  Historically, cable companies deployed facilities widely in their FAs to serve primarily residential customers and other community needs, and have more recently expanded their service offerings to customers that are likely to buy dedicated service. The Commission is particularly interested in connections that have been upgraded to business class Metro Ethernet (or its equivalent)—whether or not those connections are in service and regardless of the type of service provided—because it is reasonable to assume that such upgrades were made based on strong expectations as to the likelihood of sufficient demand for dedicated service and are sources of potential competition.

For locations with facilities that are not linked to a node capable of providing Metro Ethernet (or its equivalent), cable system operators must report in-service connections that were used during the relevant reporting period to provide a dedicated service or a service that incorporates a dedicated service within the offering as part of a managed solution or bundle of services sold to the customer. Cable system operators do not report locations with facilities used to provide a service that is substantially similar to the services provided to residential customers.

C. ILECs

ILECs are not required to report copper loops that were unable to provide a bandwidth connection of at least 1.5 Mbps in both directions (upstream/downstream) as provisioned during the relevant reporting periods.

The most controversial aspect of this Order is the fact that that cable companies are treated differently than other CLECs, since where facilities are not linked to a node, they must only supply data for connections actually used to provide a dedicated service and not connections for potential service.  This is concerning to FCC Commissioner Ajit Pai who worries that this will present an incomplete description of the potential competition facing ILECs and could lead to regulation that is not necessary or would be rejected by the courts.  He makes a valid point.

By Andrew Regitsky, President, Regitsky & Associates