In October 2013, the FCC released an order adopting rules to ensure that long distance and wireless calls terminated in rural markets are completed as dialed.  (Rural Call Completion, Report & Order and Further Notice of Proposed Rulemaking, 28 FCC Rcd 16154 (2013) (“RCC Order”)) <httpss://apps.fcc.gov/edocs_public/attachmatch/FCC-13-135A1.pdf>.[1]  In response, a number of parties filed petitions for reconsideration of the RCC Order.  Those petitions were placed on public notice, and a number of parties filed comments in support or opposition to the petitions for reconsideration.

In a recent order on reconsideration (Rural Call Completion, Order on Reconsideration, WC Docket No. 13-39, FCC 14-175 (Rel. November 13, 2013) (“RCC Reconsideration”)<https://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db1113/FCC-14-175A1.pdf>, the FCC rejected all requests to reconsider the RCC Order except the petition filed jointly by US Telecom and the Independent Telephone and Telecommunications Alliance (“ITTA”).  Petitions for reconsideration filed by COMPTEL, Sprint Corp. (“Sprint”), Transcom Enhanced Services, Inc. (“Transcom”) and Carolina West Wireless, Inc. (“Carolina West”), were dismissed or denied.

THE US Telecom and ITTA Petition—IntraLATA Toll Calls

The original rules adopted in the RCC Order applied to both inter- and intraLATA toll calls.  Based on the US Telecom/ITTA Petition, accompanying data and filed comments, the FCC decided to exempt certain intraLATA toll calls from the recording, retention and reporting rules.  The newly exempted traffic consists of:  1) those intraLATA toll calls that are handled by a single local exchange carrier (“LEC”) that both originates and terminates the call; or 2) those intraLATA toll calls that an originating LEC hands off directly to the terminating LEC, without the presence of any intermediate carrier(s).  The Commission agreed that the compliance burdens outweighed the benefits of applying its rules to “on-net” intraLATA traffic, especially as the FCC will have access to data from “on-net” interLATA calls—a close substitute.

Rejected Petitions

As noted above, all other petitions for reconsideration were dismissed or denied.  COMPTEL had asked for a broader “smaller covered provider exception.”  Sprint urged the FCC to:  1) “reconsider the Commission’s decision ‘to use the required call completion reports as the basis for subsequent enforcement action’”; 2) reconsider the rules because they had been adopted based on summaries of RLEC[2] studies, rather than the entire studies, which, according to Sprint, should have been made available to the public; and 3) grant Sprint’s petition for relief because the FCC had underestimated the costs for compliance.  Transcom objected to the rule prohibiting “originating and intermediate providers [including non-common carriers] … from causing audible ringing to be sent to the caller before the terminating provider has signaled that the called party is being alerted.”  Finally, Carolina West had urged the FCC to redefine “covered providers” in a manner that would not require aggregation of covered lines served by minority investors that also happen to be carriers.

Comments

By rejecting all, but one, of the petitions for reconsideration, the FCC has once again demonstrated it is taking the rural call completion issue seriously and is being responsive to the often “loudly expressed” concerns of members of Congress and their rural constituents.  Unless and until rural call completion rates are consistently comparable to those in urban and suburban markets, rural call completion certainly will be a subject of regulation.  All service providers, including their affiliates, which together serve more than 100,000 lines in aggregate, are going to be regulated on what will probably be a long-term basis.

Also, the RCC Reconsideration is more evidence the Commission will continue to treat non-traditional (i.e., non-common carriers) service providers as if they were common carriers in areas with public interest ramifications.  Rural Call Completion is one of those areas of strong public interest.

Moreover, we expect the FCC to take strong enforcement action against service providers that are not in compliance with the rules, both to show rural interests and Congress rural customers will be adequately protected and to provide other covered providers warning that, they too, can face strong penalties if they ignore the rules.

Finally, the risk of “injured parties” filing FCC complaints or federal communications law-related suits hovers over the industry.  While there are arguments these private cause of action statutes do not apply to non-common carriers, there is no certainty such arguments would prevail, and, even if they do, simply defeating the claims would likely be expensive.

From a bottom line perspective, we recommend every potentially affected carrier or service provider make an affirmative evaluation as whether they are a “covered provider and review this conclusion periodically as their business grows or changes.  Any entity that is a “covered provider” should quickly enter into full compliance with the substantive and reporting rules to the extent it has not already done so.  If that is not possible, it should strongly consider filing a request for temporary waiver.

If you have any questions about this alert or RCC issues in general, please contact Robert Jackson, rhj@commlawgroup.com, 703-714-1316.