Wireline Competition Bureau Approves Windstream Compliance Plan
Federal Communications Commission
News Media Information 202 / 418-0500
445 12th St., S.W.
Washington, D.C. 20554
Released: August 21, 2014
WIRELINE COMPETITION BUREAU APPROVES WINDSTREAM COMPLIANCE PLAN
WC Docket Nos. 12-61, 07-204, 07-21
On May 17, 2013, the Commission conditionally granted forbearance to price cap carriers from
the “Cost Assignment Rules” that generally require carriers to assign costs to build and maintain the
network, and revenues from services provided, to specific categories.1 The grant of forbearance from
these rules for a particular price cap carrier was conditioned on the Wireline Competition Bureau’s
(Bureau) approval of a compliance plan to be filed by such carrier electing to take advantage of the
forbearance, and the approval of the related information collection under the Paperwork Reduction Act
(PRA).2 In the same order, the Commission conditioned the grant of forbearance from the filing
requirement of Automated Reporting Management Information System (ARMIS) Report 43-01, the
“Annual Summary Report,” on Bureau approval of the compliance plan.3
1 Petition of USTelecom for Forbearance Under 47 U.S.C. § 160(c) from Enforcement of Certain Legacy
Telecommunications Regulations, WC Docket No. 12-61, Memorandum Opinion and Order, 28 FCC Rcd 7627,
7646-54, paras. 31-51 (2013) (USTelecom Forbearance Long Order), pet. for rev. pending sub nom. Verizon v.
FCC, No. 13-1220 (D.C. Cir. filed July 15, 2013). The Commission granted this conditional forbearance to price
cap carriers other than AT&T, Qwest, and Verizon, which were granted forbearance from the Cost Assignment
Rules previously. See id. at 7647-48, para. 35.
2 Id. at 7651-52, paras. 42-46. These conditions require Bureau approval of a compliance plan describing how the
carrier will continue to fulfill statutory and regulatory obligations and meet the forbearance conditions, the
maintenance of Part 32 Uniform System of Accounts (USOA) rules and data, annual certification of compliance
with section 254(k) of the Communications Act of 1934, as amended (Act), and the filing of an access imputation
plan if the price cap carrier plans to provide in-region long distance service without the separate affiliate required by
section 64.1903 of the Commission’s rules. See id.; see also 47 C.F.R. § 64.1903. The Commission obtained PRA
approval from the Office of Management and Budget (OMB) on March 24, 2014 for the information collection
associated with the conditions of forbearance from the Cost Assignment Rules, to enable the forbearance to take
effect. See Notice of Office of Management and Budget Action for OMB Control No. 3060-1195 (Mar. 24, 2014);
see also USTelecom Forbearance Long Order, 28 FCC Rcd at 7652, para. 46 (requiring PRA approval).
3 USTelecom Forbearance Long Order, 28 FCC Rcd at 7676, para. 108. Forbearance from this ARMIS report is
also conditioned on each price cap carrier’s continued annual public filing with the Commission of pole attachment
data currently submitted in ARMIS Report 43-01. Id. We remind Windstream that the Commission has not granted
forbearance to any carrier with respect to ARMIS Report 43-08, Table III, Columns FC, FD, and FE (line count
information) and Column FI (growth in access line information).
On January 31, 2014, Windstream filed its Compliance Plan with respect to three of the four
conditions for forbearance from the Cost Assignment Rules.4 Windstream explains that it is not at this
time subject to the fourth condition requiring the submission of an access imputation plan because it has
not determined whether it will avail itself of the forbearance grant to which the condition applies.5 No
comments were filed by any party regarding Windstream’s Compliance Plan.6
After review of Windstream’s Compliance Plan, the Bureau finds that Windstream appropriately
addresses the conditions in its Compliance Plan that are required for the requested forbearance, as
discussed below, and approves the plan. Windstream’s plan is similar to the plan submitted by
CenturyLink that was approved by the Bureau on March 26, 2014.7 First, Windstream’s plan describes in
detail how it will continue to fulfill its statutory and regulatory obligations and the conditions of
forbearance through a new framework in the absence of the Cost Assignment Rules.8 In addressing the
second forbearance condition, which requires Windstream to continue complying with Part 32 USOA
rules, Windstream’s plan provides a five-part explanation of how the carrier intends to satisfy this
requirement.9 Windstream explains that it “will continue to maintain USOA books of account for all of
its regulated operating telephone companies that include account-specific investment, expense and
revenue data for Part 32 accounts,” and that these data will remain available for inspection by the
Commission.10 Further, Windstream describes how it plans to provide cost allocation information if the
Commission requests it in the future.11
Next, Windstream explains how it will fulfill a third condition of the forbearance, which requires
that it certify, on an annual basis, that it complies with section 254(k) of the Act, and will maintain and
4 Letter from Edward J. Cadieux, Senior Regulatory Counsel, Windstream, to Julie Veach, Chief, Wireline
Competition Bureau, FCC, WC Docket Nos. 12-61, 07-204, 07-21 (filed Jan. 31, 2014) (Compliance Plan).
5 Compliance Plan at 2 n.6 (citing USTelecom Forbearance Long Order, 28 FCC Rcd at 7691, para. 142, which
notes additional requirements that must be met to take advantage of forbearance from the separate affiliate
requirement in section 64.1903 of the Commission’s rules); see also USTelecom Forbearance Long Order, 28 FCC
Rcd at 7651, para. 44.
6 See Comment Dates Set on Windstream Compliance Plan for Forbearance Relief from Cost Assignment Rules, WC
Docket Nos. 12-61, 07-204, 07-21, Public Notice, 29 FCC Rcd 1832 (Wireline Comp. Bur. 2014).
7 Wireline Competition Bureau Approves CenturyLink Compliance Plan, WC Docket Nos. 12-61, 07-204, 07-21,
Public Notice, 29 FCC Rcd 3158 (Wireline Comp. Bur. 2014).
8 See Compliance Plan at 1-3; see also USTelecom Forbearance Long Order, 28 FCC Rcd at 7652, para. 46.
9 See Compliance Plan at 3-5; see also USTelecom Forbearance Long Order, 28 FCC Rcd at 7651, para. 43.
10 Compliance Plan at 3-4.
11 See id. at 3-5 (also noting how Windstream will handle affiliate transactions under section 32.27 of the
Commission’s rules, 47 C.F.R. § 32.27, which was included in the grant of forbearance from the Cost Assignment
provide any requested cost accounting information necessary to prove such compliance.12
In support of
this condition, Windstream includes its first annual certification with its Compliance Plan.13
Lastly, Windstream explains that its Compliance Plan does not contain commitments concerning
the fourth condition because it is not seeking to take advantage of forbearance from section 64.1903 of the
Commission’s rules.14 Section 64.1903 requires that an independent incumbent LEC provide in-region
long distance services through the use of a separate affiliate.15 This rule reduces the need to allocate costs
between long distance and other services, although it does not eliminate the need for cost allocation
entirely. For example, section 64.1903 bars the joint ownership of facilities by the long distance affiliate
and other operations, but permits sharing of personnel.16 Windstream’s Compliance Plan explains how it
will handle cost allocation and affiliate transaction issues in the absence of the Cost Assignment Rules,
and Windstream subsequently provided clarification of how its Compliance Plan addresses those issues
with regard to the separate affiliate rule.17 Should Windstream later decide it wishes to take advantage of
forbearance from this rule and provide in-region long distance service without a section 64.1903 separate
affiliate, Windstream must, as it proposes, file a separate compliance plan then, subject to Bureau
approval, addressing the conditions to that relief, including the requirement that it describe the imputation
methodology it will use, similar to access imputation plans previously filed by the Bell Operating
Companies related to section 272 of the Act.18
12 See id. at 5-7; USTelecom Forbearance Long Order, 28 FCC Rcd at 7652, para. 45 (“This condition is necessary
to ensure compliance with the language of the Act that prohibits a telecommunications provider from ‘us[ing]
services that are not competitive to subsidize services that are subject to competition.’”) (citing 47 U.S.C. § 254(k)).
13 Compliance Plan at 9.
14 Id. at 2 n.6. The condition required for forbearance from section 64.1903 is that independent price cap carriers
seeking to take advantage of forbearance from the Cost Assignment Rules “file access imputation plans similar to
those previously filed by the BOCs [Bell Operating Companies] if the independent price cap carriers plan to provide
in-region long distance service without a section 64.1903 separate affiliate.” USTelecom Forbearance Long Order,
28 FCC Rcd at 7651, para. 44. The fourth condition is thus applicable only if an independent price cap carrier seeks
to take advantage of forbearance from both the Cost Assignment Rules and section 64.1903. In order to be able to
provide long distance service without a separate affiliate, Windstream would have to satisfy certain requirements
established in the USTelecom Forbearance Long Order for forbearance from section 64.1903, including filing
imputation access charge plans. Id. at 7651, 7691, paras. 44, 142. But since Windstream is not presently proposing
to avail itself of this forbearance relief, we agree with Windstream that it need not at this time satisfy the fourth
15 47 C.F.R. § 64.1903.
16 47 C.F.R. § 64.1903(a)(2).
17 Compliance Plan at 3-5; Letter from Edward J. Cadieux, Senior Regulatory Counsel, Windstream, to Julie Veach,
Chief, Wireline Competition Bureau, FCC, WC Docket Nos. 12-61, 07-204, 07-21 (filed June 27, 2014). This
information was provided to supplement Windstream’s Compliance Plan in response to questions by the Bureau.
CenturyLink also provided similar information in a separate ex parte filing following the submission of its
compliance plan, which the Bureau ultimately approved.
18 See Compliance Plan at 2 n.6 (citing USTelecom Forbearance Long Order, 28 FCC Rcd at 7691, para. 142); see
also 47 U.S.C. § 272 (separate affiliate requirements for certain Bell Operating Company activities).
Accordingly, the Bureau finds that Windstream’s Compliance Plan satisfies the necessary
conditions associated with forbearance from the Cost Assignment Rules, with the exception of the
condition involving the affiliate transaction rule, as discussed above. Thus, we approve this Compliance
Plan, and Windstream will have forbearance relief from all the Cost Assignment Rules effective
immediately.19 Should Windstream later wish to take advantage of forbearance relief from the affiliate
transaction rule in section 64.1903, Windstream must submit a compliance plan explaining compliance
with that condition in accordance with the terms of the USTelecom Forbearance Long Order.20
- FCC -
19 See USTelecom Forbearance Long Order, 28 FCC Rcd at 7652, 7747, para. 46, App. B (listing all the Cost
Assignment Rules for which conditional forbearance was granted).
20 See id. at 7651, 7691, paras. 44, 142.
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