Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C ) ) ) ) ) ) REPLY COMMENTS OF CHARTER COMMUNICATIONS, INC.

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1 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C In the Matter of Rural Call Completion WC Docket No REPLY COMMENTS OF CHARTER COMMUNICATIONS, INC. Mark E. Brown Vice President, Government Affairs Charter Communications, Inc Amber Park Drive, Suite 160 Alpharetta, GA ( Michael R. Moore Vice President & Associate General Counsel, Regulatory Affairs Charter Communications, Inc Powerscourt Dr. St. Louis, MO ( Samuel L. Feder Luke C. Platzer JENNER & BLOCK LLP 1099 New York Ave., NW Suite 900 Washington, D.C ( June 11, 2013

2 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C In the Matter of Rural Call Completion WC Docket No REPLY COMMENTS OF CHARTER COMMUNICATIONS, INC. Charter Communications, Inc. ( Charter hereby submits these reply comments in response to the Notice of Proposed Rulemaking 1 in the above-referenced docket. INTRODUCTION AND SUMMARY Charter is the fourth largest cable company in the United States, serving approximately 5.4 million customers, widely distributed among 25 different states, predominantly in counties considered rural by the U.S. Census. As such, Charter shares the Commission s interest in ensuring that quality voice services are available to persons in rural America. Nonetheless, Charter believes that the proposals articulated in the NPRM for addressing rural call completion rates are overbroad and impose a number of unnecessary, and burdensome, requirements on carriers to address difficulties that the Commission is already targeting using more effective means. As the initial comments in this docket indicate, carriers across the industry share similar concerns concerning the scope of the Commission s proposal. Rather than create a burdensome set of recordkeeping and reporting requirements for carriers that are not the cause of the rural call completion problems identified by the NPRM, the Commission should first evaluate the 1 In re Rural Call Completion, Notice of Proposed Rulemaking, 28 FCC Rcd 1569 (

3 effectiveness of its ICC reforms and consider, if necessary, further targeted action against any bad actors that are actually responsible for violating the Commission s call-blocking rules. DISCUSSION I. THE NPRM S PROPOSED RECORDKEEPING AND REPORTING REQUIREMENTS PLACE BURDENS ON THE WRONG ACTORS. Charter agrees with the numerous commenters who have expressed concern with respect to the scope of the recordkeeping and reporting requirements proposed by the Commission. In particular, Charter is concerned that the Commission s proposal to extend those obligations to originating local carriers, including VoIP providers that provide last mile services to retail customers, place significant burdens on actors that are in no way responsible for the problems at issue. 2 The Commission explains in the NPRM that problems in rural call completion stem from the actions of some intermediate providers offering wholesale call delivery services[, who] may be failing to deliver a significant number of calls to rural telephone company customers. NPRM, 28 FCC Rcd at 1569, 1. As many commenters have noted, originating carriers are not responsible for these failures. 3 Indeed, the Commission itself acknowledges that its proposed rules would create burdens for originating providers whose call-routing practices do not appear to cause significant call-completion problems. NPRM, 28 FCC Rcd at 1570, 3. That is especially true for VoIP providers like Charter. 4 VoIP providers rarely interconnect directly with 2 See, e.g., Comments of Time Warner at 3-5; Comments of Voice on the Net Coalition at See Comments of Time Warner at 4-5; Comments of American Cable Association at 4-7; Comments of CTIA The Wireless Association at See Comments of Voice on the Net Coalition at 4-5 (noting absence of evidence that VoIP providers have contributed to call-completion problems. 2

4 rural carriers at all, but rather route calls to interexchange carriers and/or other incumbent local exchange carriers for delivery to rural carriers. There is no principled reason why the proposed recordkeeping and reporting requirements could not be targeted more narrowly at intermediary carriers that actually direct calls into rural areas, and are thus the more likely point in the call chain at which calls to rural areas are failing to complete, as opposed to extending those same requirements unnecessarily upstream. 5 As many commenters have emphasized, the Commission s proposed requirements impose real and significant burdens on carriers. 6 Imposing those burdens on originating carriers is not only unfair, but raises costs to the ultimate detriment of consumers. II. THE COMMISSION SHOULD EVALUATE ALTERNATIVE, LESS- BURDENSOME OPTIONS BEFORE IMPOSING RECORDING AND REPORTING REQUIREMENTS ON ALL CARRIERS. Compounding the difficulty with the NPRM s proposal to impose burdensome recordkeeping and reporting requirements on originating providers is the fact that those requirements are unnecessary to address the targeted problem. As many commenters have persuasively demonstrated, the rural call completion issues identified by the NPRM may be alleviated going forward by the recent Commission reform of intercarrier compensation and targeted enforcement actions. Given the costs to the industry associated with the data retention and reporting requirements contemplated by the NPRM, the Commission should first explore the effectiveness of these actions before burdening innocent carriers with cumbersome new 5 See, e.g., Comments of American Cable Association at 4-7 (proposing that Commission target requirements at interexchange carriers that direct calls into rural areas, rather than targeting originating carriers as a whole. 6 Comments of CTIA The Wireless Association at 4-6 ( [T]his is a breathtaking amount of data to track, report, and retain.... In addition, carriers currently do not track much of the information that the Commission proposes to collect, and thus would have to develop new systems to identify much of this data.; Comments of Sprint Nextel at

5 obligations. The Commission s recent reforms to the intercarrier compensation regime eliminate much of the economic incentive for intermediary carriers to dodge their obligation to deliver calls to rural carriers. 7 The NPRM itself recognizes the link between intercarrier compensation and rural call completion, noting that the costs that long-distance providers incur to complete calls to end users served by rate-of-return carriers are a likely cause of the reports and complaints the Commission has been receiving from rural carriers and their customers. NPRM, 28 FCC Rcd. at 1572, 6. The reforms initiated by the Commission s November 2011 Intercarrier Compensation Reform Order 8 are now well underway in eliminating the incentive for intermediary carriers to seek to avoid such costs. Even though (as the NPRM notes those reforms have not yet progressed to the point where the price difference between terminating calls to different exchanges has been eliminated altogether, the price differential has already been substantially reduced and will continue steadily to decline. Therefore, even before the full transition to bill-and-keep, there will be greatly reduced incentives for intermediary carriers to avoid completing calls to rural carriers, particularly given that the IXCs LEC customers, who retain them in order to have those calls completed, have a strong competitive incentive to ensure service quality. Thus, Charter supports the multiple commenters who have urged the Commission to first evaluate the extent to which its intercarrier compensation reforms can moot any present call completion problems without the need for new reporting obligations. 9 Indeed, 7 See, e.g., Comments of AT&T at 1-2; Comments of Frontier Communications at 3-4 (noting that Commission should first analyze the impact of ICC reforms before imposing burdensome reporting requirements on carriers; Comments of Sprint Nextel at (same; Comments of Time Warner Cable Inc. at 5-9; see also Comments of Vonage Holdings Corp. at 6-8 (noting that ICC reform will in any event eliminate within two years any economic incentive to degrade call quality to rural areas, rendering such rules thereafter unnecessary. 8 In re Connect America Fund, Report and Order and Further Notice of Proposed Rulemaking, 26 FCC Rcd 17,663 (2011 ( Intercarrier Compensation Reform Order. 9 See n.7 supra. 4

6 given that the steady reductions in access charges to complete calls to rural carriers are still ongoing, any new industry-wide requirements the Commission might try to impose in this docket may well be stale by the time they go into effect. Additionally, as a number of commenters have pointed out, Commission enforcement actions could go a long way to eliminate rural call completion problems. Given the Commission s rules prohibiting call blocking (and recent extension of those rules to VoIP providers, 10 the intentional degradation of calls to rural areas likely represent the actions of bad actors, rather than a systemic problem throughout the industry. 11 As such, they may well be susceptible to deterrence through targeted enforcement efforts, which would place far fewer burdens on innocent carriers than new industry-wide data retention and reporting requirements. Accordingly, the Commission should first explore the effectiveness of further targeted enforcement efforts before imposing across-the-board record-keeping and reporting obligations. III. ANY NEW DATA RETENTION OR REPORTING OBLIGATIONS SHOULD SUNSET PROMPTLY. In the event the Commission decides to proceed with its proposal to create new data retention and reporting obligations for carriers including upstream, originating carriers not responsible for degrading calls to rural areas it should recognize that it is addressing what is most likely a temporary problem, and should not extend those obligations any longer than necessary. As discussed above, rural call completion complaints received by the Commission likely result from the high costs of terminating calls to rate-of-return carriers and from the unlawful 10 In re Establishing Just and Reasonable Rates for Local Exchange Carriers; Call Blocking by Carriers, WC Docket No , 22 FCC Rcd (2007; Intercarrier Compensation Reform Order, 26 FCC Rcd 17,663, 974 (extending call-blocking rules to VoIP providers. 11 See AT&T Comments at 2; CTIA Comments at

7 actions of intermediaries that are failing to carry through their obligations to complete such calls problems that will necessarily dissipate over time with the steady reduction of access charges combined with enforcement actions. Given that both causes the Commission has identified for the ongoing rural call completion difficulties are temporary, the Commission should be able to sunset any new data retention and reporting requirements promptly. 12 CONCLUSION For the reasons stated above, Charter urges the Commission to refrain from imposing the reporting and recordkeeping requirements proposed by the NPRM, and to instead defer action while gathering more data concerning the effect of its ICC reforms and considering alternative, less-burdensome proposals. In the event the Commission decides to proceed with industry-wide data retention and monitoring requirements, it should make sure that those obligations remain temporary and sunset promptly. 12 One commenter convincingly argues that there ought to be no need to retain such requirements more than a year. See Comments of Verizon at

8 Respectfully Submitted, Mark E. Brown Vice President, Government Affairs Charter Communications, Inc Amber Park Drive, Suite 160 Alpharetta, GA ( Michael R. Moore Vice President & Associate General Counsel, Regulatory Affairs Charter Communications, Inc Powerscourt Dr. St. Louis, MO ( /s/ Samuel L. Feder Samuel L. Feder Luke C. Platzer JENNER & BLOCK LLP 1099 New York Ave., NW Suite 900 Washington, D.C ( June 11,