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October 3, 2013 10:00 am – 1:00 pm
October 3, 201310:00 am – 1:00 pm
10:00 am – TEXALTEL Annual Membership Meeting – Board Elections Board Elections: All officers and two directors –at -large.
10:15 am – 1:00 pm TEXALTEL’s 2013 Business & Regulatory Webinar
FCC – Proceedings at the FCC that impacts present and future connectivity Presenter: Jerry James, CEO, CompTel
Where is IP Interconnection & Copper Retirement?
Presenter: Tiki Gaugler, Senior Attorney, XO
Wholesale Last Mile Fiber AccessPresenter: Jason Wakefield, Member, Herrera & Boyle
Universal Service Funding: FCC Push to Service Specific Model and Texas
Takes up Needs Test RequirementPresenter: Charles Land, TEXALTEL
October 3, 2013
Present Officers & Board MembersHoward Siegel, Logix – President*
Jared Benson – Vice President*
Katherine Mudge, MegaPath– Secretary*
Patti Hogue, Alpheus – Treasurer*
Dale Schneberger, Grande – Director*
Matt Edmuston, Meriplex – Director
Nancy Lubamersky, TelePacific – Director
Robert McCausland, Hypercube – Director
Steve Savens, Bestline – Director*
*Seat up for election
Nomination and Voting RulesNominations have been made: All seated
board members have been nominated for re-election.
Additional nominations may be made at the time of the election.
Each member company is asked to decide which person is to cast votes for that company. One representative for each company will be asked to provide a voice vote for the candidates.
The Leading Industry Association Representing Competitive Communications Service Providers
and their Supplier Partners
FCC Oversight hearings FCC Oversight hearings Spectrum auctionProcesses/procedures/merger conditions
Senate wireline hearingSenate wireline hearing
Confirmation of FCC nominees Confirmation of FCC nominees
Legislation – Cybersecurity/PrivacyLegislation – Cybersecurity/Privacy
Hill focus
Tom Wheeler as new FCC Chairman Tom Wheeler as new FCC Chairman New Staff Priorities
Michael O’Rielly as new Commissioner (RMichael O’Rielly as new Commissioner (R)
Interim Chairwoman ClyburnInterim Chairwoman Clyburn
TimingTiming
FCC Leadership Transition
IP Interconnection IP Interconnection - VIOP trials/ Numbering issues
Last Mile Last Mile – Copper retirement/packetized loop and Special Access Reform
Network deployment issuesNetwork deployment issues
Money -Money - USF /CAF/E-rate/spectrum
Top Issues
Clarification/Modification to Mandatory special access data request released on 9/17/13
OMB approval required; Date for filing data TBDClarifies Scope of Data Collection, e.g.,:
List specific exclusions from definition of “purchaser”
Clarifies that only applies to price cap areas during relevant time period
All relevant Form 477 filers must file even if just to certify that they are not a “purchaser,” “provider” or “Best Efforts Business Broadband Internet Access Service Provider”
Provides submitting instructions and record format specifications
Modifies and amends questions and definitions contained in the collection
Special Access Data Request
Who pays? Who pays?
Who is eligible for the money?Who is eligible for the money?
What qualifies for approved uses of the What qualifies for approved uses of the money?money?
What is the potential impact on What is the potential impact on competitive carriers?competitive carriers?
USF Reform Phase 2
What has been proposed?What has been proposed?OTT providers to have direct access to
numbers.
Our ConcernsOur ConcernsCertificated carriers have pro-consumer and
pro –competition obligationsOTT providers do not have the same
requirementsNetwork design issues for call handlingImpact on other issues – IP ICAsRegulatory jurisdiction for OTT VOIP
VOIP Numbering Trial
All agree there is a problem.All agree to work to protect their
network and their customers.It is not a “one-size” fits all solution.Liability?Costs?Privacy issues?What should you be doing?
Cybersecurity
Order requires carrier to retain call records to calculate per cent call completion. Burden on the provider.
Prohibits carrier from providing ringback until the call is terminated.
Safe harbor if use 2 or less intermediate carriers
Complaints may lead to FCC action.Key issues which need to be considered:
Why are calls not completing? ILEC, 3rd party, other?
Rural Call Completion
When? 2014When? 2014
What? AWS-3 BandWhat? AWS-3 Band
Who? Managed bid processWho? Managed bid process
Where? Cellular Market Areas (CMA) Where? Cellular Market Areas (CMA) versus versus Economic Areas Economic Areas (EA)(EA)
Impact Competition/Consumers/CoverageImpact Competition/Consumers/Coverage
Spectrum Auction
Pole attachments- access and ratesPole attachments- access and rates
Right a waysRight a ways
Building accessBuilding access
Network Deployment Issues
About 25 states have passed legislation About 25 states have passed legislation Deregulate retail offeringsNo Carrier of Last Resort obligationNo jurisdiction under state law for VOIP
California statusCalifornia status
Michigan Michigan
Stakeholder alliancesStakeholder alliances
State Legislation Watch
COMPTELCOMPTEL
About xo communicationsOne of the nation’s largest providers of
innovative broadband and other competitive services
XO has deployed IP technology into its nationwide network and began offering VoIP services to retail customers over a decade ago
XO’s VoIP nationwide footprint covers 2,700 cities across the U.S. and in nearly every state
XO offers converged IP voice and data communications services over a single access facility, including local and long distance calling, dedicated Internet access, and web hosting, as well as virtual private networking
Technology overviewTime Division Multiplexing (TDM)
Signals transmitted over dedicated connection established for duration of call
Utilizes circuit-switched network with fixed number of channels and constant bandwidth per channel
Internet Protocol (TCP/IP) Data grouped into packets, regardless of content,
type, or structure, that are individually transmitted on shared connection then reassembled at destination
Utilizes packet-switched network that allocates transmission resources as needed for dynamic capacity
Packet of information flows through multiple layers, from the application layer down to the physical layer where it is placed on the cable and sent to its destination and then flows back up to the application layer
Voip servicesOver-the-top VoIP services utilize the public Internet for
at least a portion of transporting a call The public Internet uses best efforts routing that treats all
packets the same and relies on buffering to control congestion, which may degrade call quality
Managed VoIP services utilize private IP networks with packet prioritization and traffic segmentation A managed-packet network is able to combine the quality
standards of the PSTN with the flexibility of a packet-based network to assure quality of service
Technology transitionPublic Internet traffic and managed VoIP traffic
may use the same network protocol but typically traverse over separate physical interconnection facilities
IP transition involves the evolution of network technology, not of physical network facilities Due to quality of service and flexibility benefits, the
transition of the Public Switched Telephone Network (PSTN) is likely to follow the course of managed VoIP services with interconnected private networks, rather than that of the public Internet
A separate Public Communications Network (PCN) will still exist even as the network technology transitions from circuit-switched to packet-switched
Copper retirementIP-based services may be provided over the same
types of physical layer as TDM-based services (i.e., copper, fiber, coaxial cable, wireless spectrum)
Existing copper facilities allow more rapid and cost-effective deployment of broadband than fiber Copper plant is ubiquitous nationwide Advances in technology have enabled deployment of
Ethernet-over-copper with speeds up to 100-200 MbpsCopper retirement rules should be updated to
require public interest showing and FCC approval prior to retirement, prohibit physical removal of copper even after retirement, and require ILECs to provide CLECs with access to retired copper facilities and comprehensive data regarding copper availability
Interconnection scenariosTDM-VoIP Interconnection
Media and signaling gateways provide protocol conversion at network edge
Primary issue is which party is responsible for costs of conversion
IP-in-the-middle Utilizes IP transport deployed in carrier networks Traffic exchange can occur in IP even though end users are
served with TDMVoIP-to-VoIP
Ultimate goal is to provide end-to-end IP to allow enhanced features and functionality
Policy considerationsILECs maintain market power and terminating monopoly
regardless of technology transition; forbearance must be required for regulatory relief
Telecommunications Act is technology neutral and sections 251 and 252 apply to managed IP interconnection
Regulation of managed IP interconnection would not equate to regulation of public Internet content or peering arrangements
Once the appropriate regime for IP interconnection is established, market forces can dictate the pace of IP deployment in individual carrier networks
state commission activity
Texas – SB-980 prohibits PUC from regulating VoIP or IP-enabled services
Illinois – Sprint/AT&T ICA arbitration Massachusetts – DTC opened investigation and
required Verizon to file ICA that includes IP interconnection
California – SB-1161 prohibits PUC from regulating VoIP or IP-enabled services
FCC activityICC Transformation Order & NPRM
Attempted to eliminate barriers to IP interconnection by clarifying that providers must negotiate in good faith upon request for IP interconnection arrangements
Technology Transitions Policy Task Force Formed to provide recommendations to the FCC to
modernize FCC policies and will hold periodic workshops Public Notice sought comment on potential industry trials
regarding IP interconnection, wire center all-IP networks, NG911, copper to fiber transition, wireline to wireless transition, and others
VoIP Numbering Order, NPRM, & NOI Established trial for interconnected VoIP providers to gain
direct access to numbering resources Sought comment on various database and routing issues
Jason WakefieldHerrera & Boyle, PLLC
October 3, 2013
Wholesale Options
CLECsILECs & cable companiesOther options
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CLECs (in alphabetical order)
Alpheustw telecomXOZayoOthers?
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AlpheusFiber presence in Dallas/Fort Worth,
Houston, Austin, San Antonio, San Marcos, Corpus Christi, Harlingen, Laredo, and McAllenhttp://www.alpheus.net/4-2/alpheus-network/
Wholesale servicesDark fiber and Ethernet, 51 Mbps to 1 Gigabit
http://www.alpheus.net/terms/terms-and-conditions/
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tw telecomFiber presence in Dallas/Fort Worth,
Houston, Austin, San Antonio, El Paso and Corpus Christihttp://www.twtelecom.com/sales-services/
Wholesale servicesDS0 to OC-48Tariffed prices starting from $135/month plus
$100/mile for DS1s and $1150/month plus $300/mile for DS3s
Special construction charges (ICB) for new construction
http://www.twtelecom.com/telecom-solutions/wholesale-ethernet/
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XOFiber presence in Dallas/Fort Worth,
Houston, Austin, and San Antoniohttp://www.xo.com/carrier/internet-acces
s/dedicated/
Wholesale servicesDS1 to 100 Gigabit Ethernet Pricing not listed on websiteSpecial construction charges (ICB) for
new construction http://www.xo.com/legal-and-privacy/product-
terms-and-conditions/
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ZayoFiber presence in Dallas/Fort Worth,
Houston, Austin, San Antonio, El Paso, Amarillo, Lubbock, Corpus Christi, Laredo, Midland, Killeen, Waco, and Dentonhttp://www.zayo.com/interactive-network-map
Build-operate-transfer modelCLEC pays MRC for dark fiber built by Zayo,
then can take ownership after set number of years
$1,000 to $3,500 MRC, depending on location See attached presentation
Example: partnership with Cbeyond
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ObservationsCLEC offerings typically limited to larger
metro areasJoint venture of multiple CLECs to cover
more of the state?
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ILECs and Cable CompaniesAT&T
https://primeaccess.att.com/shell.cfm?section=89 Verizon
http://www22.verizon.com/wholesale/solutions/solution/transparent%2Blan%2Bservice.html
CenturyLink http://www.centurylink.com/business/products/
products-and-services/data-networking/metro-optical-ethernet.html
Time Warner http://www.timewarnercable.com/en/business-
home/solutions/carrier-reseller/wholesale-ethernet-access.html
Comcast http://www.comcast.com/dedicatedinternet/?
SCRedirect=true Willingness to partner in this type of business model?
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Other OptionsPartnership with engineering firm
Capex up front, unless firm accepts build-operate-transfer model
$500+ per location passed, plus $500+ per installation http://fastnetnews.com/fiber-news/175-d/4835-fiber-
economics-quick-and-dirty
Partnership with local governmentsGoogle Fiber example
Reasonable access to poles, conduits, and permits
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CLEC pays MRC for dark fiber built by Zayo, then can take ownership after set number of years
$1,000 to $3,500 MRC, depending on location See attached presentation
Similar existing partnership with a National Carrier/ISP company
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Fiber Presence - Texas
DallasFort Worth
Houston
Austin
San Antonio
Amarillo
Lubbock
Corpus ChristiLaredo
Midland
Waco
Denton
Killeen
El Paso
http://www.zayo.com/interactive-network-map
Build-Operate-Transfer Model
Questions?
Jason WakefieldHerrera & Boyle, PLLC
816 Congress, Suite 1250Austin, Texas 78701(512) 474-1492 (o)(512) 364-2261 (m)
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Changing the Landscape
By: Charles D. Land, P.E.Executive Director, TEXALTEL
Affects Wholesale Service USF Exemption
TimelineFCC Order adopted November 1, 2012 in WC
Docket No. 06-122Effective for 499A reports after 1-1-2014.Comments filed September, 2013 on Form 499-
A instructions
Status QuoEach reseller certifies annually to wholesale
provider that it pays USF on retail services and is exempt on wholesale.
USAC has rankled many with audits and many reclassifications from reseller to end user – big back bills to wholesalers.
Objectives of Proceeding
Broaden the base on which interstate USF is paid.
Address requests for clarification from USACAddress issues raised by carriers
ChangesResellers must certify by service that they are
reselling. Reselling defined to be:1) incorporates the purchased
telecommunications services into its own offerings and
2) can reasonably be expected to contribute to support universal service based on revenues from those offerings.
What changed? Services purchased to provide internet service (which is not
subject to USF) and other services not subject to USF assessment are no longer USF exempt.
When doing an audit, USAC is required to consider “other reliable proof” that the wholesaler’s customer is a reseller. In the past USAC assessed USF if wholesaler failed to follow 499 instructions, even if there was evidence that the customer is a reseller.
Double collection prohibited – if the wholesaler can show by clear and convincing evidence that the reseller paid USF on services provided with the resold service, USAC cannot require the wholesaler to pay USF fees on that service
A wholesaler who complies with all instructions with Form 499-A has a “safe harbor” and USAC cannot reclassify revenues as “end user” and assess additional fees.
What was clarified? XOCS had outdated reseller certificates (some taken when service first
provided, some obtained during the audit 3 years later). FCC said these are not acceptable to show “reasonable expectation” but may be considered as “other reliable proof” that USF fees were paid.
TelePacific asked that all services obtained for resale be exempt, including those to provide internet or other retail services not subject to USF. FCC denied relief. Result is that network based providers pay no fees on internet services and resellers pay USF fees on transport purchased to provide internet.
“Safe Harbor” –if the provider demonstrates that it has a reasonable expectation that its customer is contributing as a reseller “based on the guidance provided in the FCC Form 499-A instructions”. This means customer annual certifications are in hand when the carrier files its 499-A report. If the reseller lies, wholesale provider is not liable.
A provider who fails to show “reasonable expectation” (didn’t follow the form 499-A instructions) may submit “other reliable proof” when USAC audits. Providers are expected to see that customers are in the FCC data based as USF payers. Proof that each service provided is used to provide a service on which the reseller pays USF is also required. If USAC finds during the audit that the customer lied, or for any other reason isn’t a “reseller”, wholesaler is likely liable.
What does this mean to TEXALTEL members? Make careful note of “mixed use”. If a wholesale service is used to provide
2 or more services, some of which are subject to USF and some not, the reseller may still certify that the service is resold and eligible for USF exemption if the reseller pays on those services subject to USF assessment.
Be sure that certification forms are turned in timely each year on each wholesale service (depending on form 499-A instructions, maybe by class of service).
Expect that any wholesale service used exclusively to provide internet will be subject to USF.
Wholesale providers – watch closely when the Form 499-A instructions are issued.
All – this will require changes in how you do parts of your business. Don’t snooze or you will lose.
Remember the FCC’s goal – any transport associated with internet service is “telecommunications” and subject to USF. They haven’t fully accomplished this yet, but this is what they think they are doing.
