Smart Upgrades

Every network faces periodic upgrades of electronics or key components. We have found that cutovers are the time when any network is the most vulnerable.

There are tried and true processes that can be used to minimize the chance or duration of network outages during upgrades. The following is a list of steps that we recommend for any network upgrade that puts customer service at risk. Following these steps is never a promise of 100% safety, but we have never seen a company that upgrades in this methodical and planned manner have major problems.

  1. Have a Project Manager for the Upgrade. It is vital to have one person in charge of the upgrade. They can get assistance in planning and doing the upgrade, but they need to be the one ready and authorized to react if things don’t go as planned.
  2. Develop a Checklist. You should develop a step-by-step checklist of everything to consider for the upgrade. Make sure that you understand every piece of equipment and software that will be affected by the upgrade. And then, most importantly, develop a step-by-step list of the steps required to perform the upgrade.
  3. Break the Upgrade into Manageable Steps.  If possible, the upgrade should be done in stages where progress can be measured and tested as each step progresses.
  4. Establish a Baseline / Establish a Go-Back Process. By this we mean that you need to completely understand the current network configuration, in detail. You need to know the exact settings of every piece of equipment. And once you understand the current network configuration develop a go-back process. This would be the steps needed to get the network back to the original configuration if something goes wrong during the upgrade. Ideally the go-back would be something really fast and we sometimes have seen this programmed such that it can be done in minutes.
  5. Understand the Traffic Flow (and then monitor during the cutover). During the upgrade process you might not get the same kind of alarms that you normally would expect. Also, changing traffic patterns due to the cutover can skew traditional measurements if you are rearranging the network. So it’s vital to understand your traffic flow before the upgrade. Then, have somebody monitor the traffic during the cutover since this might be the only way you will know that you have knocked customers out of service.
  6. Make Sure you have Vendor Support. For a major upgrade you should consider having a vendor representative on site. Otherwise, make sure ahead of time that somebody will be able to help you if you run into unexpected problems. I have seen clients schedule an upgrade over a holiday, not thinking that the needed expertise at the vendor is probably not going to be available.
  7. Pre-test Every Component before the Cut. Definitely test any new equipment before you introduce it into the network to make sure that it is operating properly. For complicated upgrades you ought to consider setting up a test lab where you can test the new equipment against components that will remain in the network for interoperability.
  8. Take Every Upgrade Seriously. I often see companies follow most of the above steps for major upgrades only to see them knock out their network for some simple upgrade like introducing new cards or something they thought was a simple upgrade. Any change that can knock down your network might knock down your network, so take every upgrade seriously.
  9. Define What Success Looks Like. You should establish the needed tests ahead of time that will let you check that every aspect of the network is working as planned. You don’t want to do an upgrade that is almost right only to find that you have created future problems. So establish a detailed test plan.

If you have questions about upgrades or want help developing an upgrade plan contact Derrel Duplechin of CCG at (337) 654-7490.

Will Telecom Investing Become Sexy Again?

Image representing Google as depicted in Crunc...

Image via CrunchBase

Will the fact that Google is investing in fiber make it sexy again to invest in telecom? The last time that there was a big boom in investing in new telecom ventures was the late 90’s. At that time there were dozens of start-up CLECs, a number of which were able to issue IPOs and go public. Every smart investor had some telecom stocks in their portfolio.

But the new CLECs and telecom firms of that time almost all went bust with only a few of them still around today. There are a number of reasons for the bust. The business plans of many telecom startups depended upon arbitrage – using the facilities of the incumbent rather than making infrastructure investments. And many of the telecom start-ups had bad business plans that expanded into too many markets too quickly to do it well. And somehow the telecoms got tied in with the dot.coms and when those went bust the telecoms followed them down the tubes. And investors lost a lot of money and got soured on telecom. The lasting effect of the bust was that it became unsexy to invest in telecom.

And almost nobody has invested in telecom since then. It’s hard to find anybody who doesn’t recognize that the US is falling behind the rest of the world in telecom infrastructure, namely fiber. Since the telecom bust the only ones investing in fiber to whole communities have been Verizon, some municipalities and some smaller independent telephone companies. Verizon’s decision to build fiber was a bold one, but it didn’t drag anybody else along. And Verizon’s fiber build dwarfs all of the rest of the builders collectively. The vast majority of the country does not have fiber but wants it badly.

But now Google comes along and is boldly investing in fiber in large communities – Kansas City and Austin. What they are telling the world is that there is profit in fiber, profit in infrastructure investing. Kansas City was touted as a trial, but by having announced Austin so quickly it is obvious that Google thinks that their experiment is working. And while Google has made an announcement for Provo, Utah, that is a one-off since they were able to pick up an existing fiber network and customers at a very good price.

I keep hearing that there is a lot of money today on the sidelines, meaning money waiting to get invested in good projects. And this is interesting to me since there is such an obvious need in this country today for new and upgraded infrastructure. In addition to a huge need for fiber networks there is a huge demand for clean energy generation plus the usual things like bridges and roads. Perhaps at least to some small degree the Google decision to boldly invest in infrastructure can be the first step towards unleashing the private equity in the country to invest in infrastructure again. Google thinks such investing can be profitable and obviously it is good for the country. Will others follow?

Regulatory Alert: FCC Acts on Numbering Issues

Seal of the United States Federal Communicatio...

Seal of the United States Federal Communications Commission. (Photo credit: Wikipedia)

At today’s FCC Open Meeting the FCC approved the release of a Notice of Proposed Rulemaking (NPRM) and Notice of Inquiry (NOI) on expanding direct access to telephone numbers for wholly VoIP providers like Vonage.  Vonage was also granted a waiver to conduct a limited 6 month trial involving 145,000 numbers.  The Wireline Competition Bureau is responsible for reporting back to the Commission at the conclusion of the trial.

Disassociating telephone numbers from geographic locations will also be part of this NPRM and NOI.

Check back as CCG will monitor this proceeding. We will be posting the NPRM and NOI when they are released.

Cable TV Trends

There are a number of trends affecting the cable TV industry that all add up to an industry that is going to be seeing big changes over the next decade. These are what I see as the biggest trends affecting the industry:

  • Cord Cutters. The number of people who are completely dropping cable is growing and the speed of that drop is accelerating. I have seen several different recent estimate that 5 million households will have completely dropped all cable service by the end of 2013. And only the cable providers know how many other million households that have cut back on the size of the package they buy rather than drop service totally. I anecdotally know many people, myself included, who have gone from the big cable packages to something less – in my case I now have only the basic package of about 20 channels.
  • Higher Programming Costs. Programming costs have been rising steadily for the last decade and until the last few years were climbing between 6% and 7% per year. Costs have climbed even faster in recent years due to the high fees being demanded by local network channels in each market (ABC, NBC, CBS and Fox). Local network programming was free for cable companies until a few years ago, but now they paying as much as $1 per month per customer for each major network channel. Many contracts between cable providers and programmers are for multiple years and those contracts show the price increases are going to continue to come.
  • Even Higher Rate Increases. The large cable companies have increased rates around 7% per year for many years. The programmers have usually blamed the size of the increases on increased programming costs, but until the recent increases in local network programming the increases were generally about twice what was needed to cover programming cost increases. If the rate increases continue at that level, then a $70 package today will cost $129 in ten years. Prices are already at a point that are forcing households off the network.
  • Very Solid Cable Modem Business. To a large degree the cable companies have won the war with DSL. However, they have stiff competition from Verizon and FiOS on fiber. There is limited competition outside the Verizon footprint, but with Google building fiber in Kansas City and having announced Austin and Provo there is going to be more competition for the residential business.

What do these trends add up to? I see them resulting in the following:

  • Ever decreasing cable customer base. The most dire trend for the industry is that young people are not interested in traditional cable, and as that demographic ages the percentage of households wanting cable is going to drop faster and faster. Add to this the households dropping due to never-ending price increases and most experts see cable subscribership going down the same path as landline telephones. Subscribers are dropping somewhat slowly now, but every prediction I have seen believes the rate of disconnects will accelerate over time.
  • Cable Providers Become Data Companies. As cable penetration decreases the cable companies will become more and more reliant on selling data. This is going to lead them over time to maximize their networks for providing bandwidth for data rather than cable TV. And I predict it also means that they will start raising data prices over time, something that we just started seeing in the last year. There is not much profit in selling cable packages and the cable companies could be more profitable selling data eventually (assuming they are in markets where they don’t have stiff competition).
  • Winnowing of Cable Networks. As the industry loses subscribers and as people downgrade from larger packages to smaller ones, the demand for some of the networks is going to diminish. One way for cable companies to control costs is going to be to whittle away at their line-up, and that is not that hard to do with 300+ channels on many cable systems. So some of the marginal networks are going to either die or greatly reduce the fees they charge if they want to stay in business.

There is one change that might affect the industry that could upset these trends, and that is a la carte programming.  There are a lot of barriers to make that happen, but cable companies might get new life if they are able to sell only those channels that people want to watch. It’s certainly possible that they could sell a package of 20 channels to a family at an affordable price and make more profit than they do today with the large expensive packages. But this is going to require a major change in an industry that is currently controlled by the programmers and not by the cable companies.

Give the Customers What They Want

I have a friend Danny who is a CPA and he is doing something that I think is brilliant. He has taken over the accounting practice from his 72 year-old father and he also has a number of other older accountants who help him during tax season. (And I don’t use the term “older” accountant nonchalantly, being one of them myself).

For several years he has tried to force the older accountants into learning new tax and accounting software and they have resisted vehemently. Their arguments are that they had multiple years of tax returns from their clients in older legacy programs and they also were just not interested in learning yet another new program. In fact, his father told him that if he was forced to learn a new system he would just stop helping him. And the clients all love his father.

And so my friend Danny did a brilliant thing. He went out and set up his own private cloud network. He put all of the new software into the cloud that he and most of the staff use, but he also sent the various older legacy software that the older accountants wanted to use into the cloud. And he chose to use a cloud so that anybody could work with any of the software packages from anywhere.

He would have preferred to do this with an existing cloud computing service, but none of them were interested in helping him set up the legacy software, some so old that they are DOS systems. There are a number of cloud services that support new accounting software. In fact, one of the major selling points of most of the cloud service providers is that a customer will never again have to worry about having software that is out of date and the cloud providers tout how they will introduce every update from the software provider when it becomes available.

Accountant upstairs ↑

Accountant upstairs ↑ (Photo credit: jah~)ems. 

And the cloud providers are completely missing the point. Real life people don’t want software that is always up to date. My worst nightmare is to log onto a cloud server with a project with a deadline and find out that the program I use every day has changed and that I will have to spend hours figuring out the differences. People don’t mind upgrading software over time and we have all migrated through the many versions of Microsoft Office. But people are creatures of habit and our relationship with software has become almost intimate. Danny’s father is a perfect example. He won’t use anything newer than Office 2007. And this is his right – he paid for it and it still works. Upgrading software you use every day can be unnerving at best and traumatic at worst and is always a bit disruptive.

And so the cloud providers have some big lessons to learn if they really want to be successful with the average customer. The cloud providers have chosen to stress the benefits of always having the most recent version of software. And from an operational perspective this makes sense for them. They only have to maintain one version of the software which makes it easier on them in a number of ways. But this doesn’t make sense from the perspective of what their customers want.

In the telecom business we have a long history of offering a handful of standard products to businesses. And from the perspective of the telcos this makes sense for the same reasons that the cloud providers want to push one version of software – it’s easier on the telco in terms of staff training, operations and billing. Selling standard products is what Ma Bell did for a century.

I would argue that selling only ‘standard’ products is not in the long-term best interest of a telco. If your company only sells standard products then you have turned those products into a commodity. In a competitive world, customers have no reason to be loyal to you if they can get that same commodity from somebody else for less. But if you are willing to listen to your customers and give them a custom product that they want, then you have created a loyal customer who is likely to stay with you for a long time. I don’t think most telecom providers add in the cost of churn when looking at profit margins. It is worth spending more up front to get a customer who will stay with you than to sell standard products to customers who will always be price shopping.

Hosted IP Centrex Service

In a few other blogs I have referred to IP Centrex as a new service for businesses, so I thought I ought to explain the service. Hosted IP Centrex service uses data-centric phone sets to replaces key system, PBX system or existing Centrex service. The IP Centrex phones can be controlled by a softswitch or by connecting an IP PBX to a legacy switch.

A number of CCG’s clients are having success selling IP Centrex to business customers. The product includes the best features of a large PBX plus many additional “value added” services that are only available through IP based phone service. The product can be integrated with a subscriber’s computer systems to provide such features as dialing from Outlook, common databases for all employees, etc.

There is a wide range of phone sets available that include a screen that allows a caller to manage their calling. The product requires a customer to buy new IP handsets and many of my clients lease sets as part of the price.

This product has a large potential market since it can be tailored for the very small or very large business. It is easy for the carrier or the subscriber to customize features for each phone or for the whole system.

There are a number of benefits of this product to both the carrier and to subscribers. Some of the biggest advantages:

Benefits to the Carrier

  1. Can be sold to any business subscriber regardless of what service they had before. It’s a good replacement for B1’s, trunks or traditional Centrex.
  2. Subscribers become stickier to the extent you can get them hooked on custom features not available elsewhere.
  3. Allows a carrier to sell service outside your traditional footprint. You just need to find businesses that have a decent high-speed data connection. This also means you can sell voice services to all branches of a customer’s business and not just to those in your footprint.
  4. It promotes the Company’s data products and is easily bundled with data.
  5. The product has a lot of pricing flexibility and can be sold to compete with multiple B1’s or traditional Centrex. You should be able to profitably beat the price of any traditional phone product.

Benefits to Business Subscribers

  1. The Subscribers get a telephone system that equals the features of a high-end PBX.
  2. The Subscriber no longer needs to buy or maintain a PBX. The customer can buy the IP phones or lease them from you.
  3. Subscribers can portray a unified professional image to the public. Employees at remote locations can be integrated into the telephone system. And small companies can act like bigger companies by the use of the various features. Remote employees can be made to feel like a part of the Company.
  4. Subscribers can tailor the phone system and each phone to meet their needs. There are hundreds of features available including many that were not available on analog systems.
  5. Subscribers can easily manage the features available on each set using the Subscriber portal that allows for easy and immediate changes to the features on any or all phones.
  6. Phones are portable and an employee can quickly move their phone from desk to desk or office to office and keep the same extension, voice mail and features.
  7. Phones can be programmed to be nomadic (portable, but not mobile). This means that an employee can take the phone out of the office and work at home or in a hotel as if they were in the office.  All features and functions of the phone remain unchanged.

Who is Going to Pay for the IP Network?

Peninsular Telephone Company

Peninsular Telephone Company (Photo credit: Nick Suan)

Small telcos and most CLECs are waiting to see what will come from the changes due to converting to an all IP network for telephony. Today the telephony voice network utilizes TDM (time division multiplexing) technology that was originally developed for copper but that has been upgraded to use fiber. But the FCC has said that this old network is going to have to be upgraded to all-IP, meaning that voice will be carried by Ethernet similar to the way that data is transmitted.

I don’t think anybody is arguing that this kind of shift makes sense. IP trunking is far more efficient in terms of carrying more calls in the same amount of bandwidth. And a lot of companies have already implemented some IP trunking.

The important issue for small telcos and CLECs is how this transition is going to change their costs. In order to understand the possible change, let’s look at how voice traffic gets to and from small telcos and CLECs today.

  • Independent telephone companies connect with larger companies and neighboring companies by physical interconnection at mutual meetpoints. Historically, most of the meetpoints are located at the physical border between two neighboring telephone companies with each company owning the fiber and electronics in their own territory. And each telco is responsible for the costs of their portion of the network. Historically local calls have been exchanged for free in both directions and there are access charges in place for all telcos to get paid by the long distance carriers for using their network and facilities for long distance calls.
  • The rules governing CLECs were established by the Telecommunications Act of 1996. This Act laid forth the basic rule that a CLEC can interconnect with a telco network at any technically feasible point. This idea was fought hard by the large telcos who wanted CLECs to bring traffic to their tandems (regional hub offices). Once a CLEC has established a meetpoint, then it works pretty much the same as normal telco interconnection in that both parties are responsible for costs on their side of the interconnection. Sometimes local calls are interchanged for a fee and sometimes they are free (called bill and keep) and this is negotiated. The CLECs also bill access charges for carrying long distance calls.

There are a number of ways that IP trunking could be implemented, and each of them has financial consequences for small telcos and CLECs:

  • The IP network could be built to mimic the current PSTN. The routes would be roughly the same but the rules of interconnection would stay the same. But with IP trunking the network would be more efficient.
  • The large telcos could establish regional hubs and expect everybody else to somehow get their traffic to those locations. This would be a radical change for small telcos who would have to build or lease fiber from their rural location to the nearest regional hub. For CLECs this would completely undo the rules established by the Telecommunications Act of 1996 and would put all of the cost to get to the hubs onto them.
  • In the most extreme IP network there would be only a few large hubs to cover the whole US. This would be the most efficient in terms of the hubs, but it would require all telcos and CLECs to spend a lot of money to get their voice traffic to and from the hub.

Since I have been working in the industry the RBOCs (now AT&T and Verizon) have tried several times to put the burden and the cost of transporting calls onto the small telcos. But regulators have always stepped in to stop this because they realize that it would greatly jack up the cost of doing business in rural areas. I certainly hope that as we move to a more efficient network that we don’t end up breaking a system that is working well.

The downside to any plan that shifts cost to small telcos is that the cost of providing local and long distance service will increase in rural areas. The consequence of changing the CLEC rules will be less competition. The current interconnection and compensation rules have served the country well. Every caller benefits by having affordable rates to call to and from rural areas. And there is no doubt that higher communications cost would be a major hindrance to creating and keeping jobs in rural areas.

So, You Want to Get Into the Data Center Business?

Data Center

Today’s guest blogger is Mike Fox. He was one of the founders of CCG and we still work together on a number of projects. He is working today for Fox Management Advisors.

Cloud computing, business disaster recovery and continuity, off-site data storage, co-location, managed services, mirror site operations, data warehousing ….. what does it all mean, and, more importantly, how can you get some of this business?

On the surface, data centers are closely related to telco operations – high capital costs, spiky investment, technology driven, and (hopefully) good long-term investments.  Furthermore, telephone companies are natural partners (or owners) of data center operations due to the requirement for robust (and redundant) bandwidth connectivity (preferably fiber based).  Site security is also a critical factor; something telcos are well acquainted with and can naturally support.  However, given the fast-moving nature of both businesses (telecommunications and data centers), there are several key aspects that must be considered.

Location, Location, Location

As with real estate, one of the most critical factors when considering whether or not to invest in or build a data center is location.  In addition to other issues, location impacts costs (e.g., power costs – which are one of the primary cost elements), vulnerability to natural and man-made disasters, access to qualified technical personnel and your sales opportunities.  Some of the key location-based factors include, but are not limited to:

  • Cost and availability of real estate – is there sufficient open space for expansion
  • “Green” attributes – availability of green power and other low sulfur emission power sources
  • Cheap and abundant power from multiple sources
  • Climate – e.g., climate can affect HVAC cooling costs and design
  • Available education resources – colleges, universities and technical training
  • Access to redundant sources of broadband facilities – especially fiber optics
  • Local/State income tax rates – including any ‘incentives’ available for tech-based companies

Locating a data center near or in conjunction with a telephone company can be advantageous from the perspective of securing an anchor client (telcos house and store a lot of data), proximity to superior broadband connectivity, and access to technical expertise (e.g., it is not too far of a leap for telco IP technicians to be trained to be able to handle many of the technical needs of a data center).

Access to sufficiently trained technical personnel is very important.  While telco technicians have many of the same skill sets necessary to meet the needs of data center operations, it is likely that you will need more highly trained and certified employees than are necessary for traditional telco operations.  Therefore, locating close to colleges, universities and technical training centers, while not a requirement, can be a great advantage.  That said, I am personally aware of several data center operations that are several hundred miles from such educational facilities.  These operations were able to attract very qualified people due to their unique location – e.g., sometimes people would prefer to NOT live in the big city!

Not being located in the ‘big city’ is also positive from the perspective of site vulnerability.  Assuming you have sufficient broadband and power availability (again, redundant feeds, if possible), then locating in rural areas is very attractive for companies wishing to house their data in secure locations with very low risk profiles from both man-made (e.g., terrorism) and natural (e.g., hurricanes) disasters.  Coincidentally, most rural telcos are NOT in high risk areas; particularly with respect to terrorism and other man-made disasters.

The cost of power is also very location dependent.  In many rural states (e.g., Wyoming, where I reside), the cost of power is below the national average (often way below).  For example, the cost of power in Wyoming is consistently below $0.04 / Kwh (again, depending upon the exact location), which is less than half the national average of over $0.11 / Kwh.  Furthermore, availability of power is a location-based factor – is your location subject to issues such as rolling brownouts, which are common in some of our country’s more populated locations?

Know Your Business; Know Your Market

Like many technology-based businesses, the data center business is rapidly evolving.  What might have been a great business model a year ago, may have no legs today.  Rates, services, packages, bundles and even target customers are changing daily.  However, there is no doubt that in one form or another data storage, remote site availability, business disaster recovery and ‘cloud computing’ (the meaning of which is also evolving daily) will be viable products for years to come.  The key is to know where to start and how to focus effectively to meet your customers’ needs for many years to come.  It’s not necessarily ‘rocket science’ but it’s also not child’s play.  As such, we are prepared to assist with the evaluation of these and many other similar opportunities and, if it looks positive, help you launch or expand existing data center operations.

Two Fiber Networks?

Image of Austin, Texas

Image of Austin, Texas (Photo credit: Wikipedia)

The conventional wisdom in the industry is that two companies would never invest in side-by-side fiber networks to serve residential customers. I have had this conversation many times with clients who were planning to build a fiber network and who were worried about the response of the incumbent providers. Everyone has always believed that the first fiber builder wins because there is not enough margin in the residential market to support two fiber networks. AT&T has shown that conventional wisdom to be wrong by announcing that they will build a second fiber network in Austin as a counter to Google’s announcement to do the same.

This is not without precedent, although on a much smaller scale. The City of Monticello, Minnesota built a fiber network to pass every home and business in the City. The municipal fiber build was prompted by the fact that the City had some of the highest telecom rates in the country. Soon after the City built their network, TDS Telecom, the incumbent telephone company built a competing fiber network.

And as expected, both fiber providers are not faring well. After building fiber TDS decided to win back customers with an aggressive price war. Charter, the incumbent cable company also got into the price war fray. And so customers in Monticello are benefitting from a price war while all of the companies are underperforming.

It is fairly easy to understand TDS’s motivation for building the fiber network and for the price war. The company serves numerous other towns like Monticello and I see their response there as a clear warning to anybody else who is planning on overbuilding their serving territory. It is also clear that they are hoping that the City will give up and leave the fiber business.

And now we are going to see this scenario play out in the much bigger market of Austin. Google already overbuilt one AT&T market in Kansas City and one can easily envision Google overbuilding many other large cities. AT&T’s response in Austin is the same as TDS’s response in Monticello. AT&T has made it clear to Google and others that they are not going to side idly by and watch their major markets go to somebody else.

So it will be interesting to see the impact of AT&T’s announcement. It’s possible that the announcement will cause Google to pause and not build in Austin. Certainly they will not do as well as expected if there are two fiber networks. It’s also possible that both companies will build fiber and we will see side-by-side competition with two fiber networks and the cable company – the kind of competition we have never seen in a major city in the US.

But the real impact of AT&T’s announcement is going to be felt everywhere else. One has to wonder what kind of impact AT&T’s announcement will have on any company, Google included, who is contemplating building a fiber network in a large city. Google has very deep pockets and might proceed anyway, but almost any other company would not be able to afford the much lower returns that come with hard competition.

While this announcement might result in real competition for the citizens of Austin, it also might have the effect of stifling anybody else from trying to build fiber in a large City. This announcement could result in killing anybody from building fiber in large cities due to the fear of a similar reaction. While hearing about two companies wanting to provide gigabit fiber sounds like a good thing, the long-term consequence of this might mean less overbuilding, less fiber and less competition.

And I don’t know that AT&T had any choice. Their only other option was to watch their large markets go to an aggressive competitor. Nobody knows what Google plans to do, but some have speculated that they might build in most of the major cities. Now we’ll just have to watch this one play out, so pull up a chair. This should be interesting.

Regulatory Alert: Annual Access Charge Reform Tariff Filings Coming Due

Seal of the United States Federal Communicatio...

Seal of the United States Federal Communications Commission. (Photo credit: Wikipedia)

The second year of access reform is here again and most LECs and CLECs will need to file revised access rates by July 1. However, you should be aware that many State Commissions have their own requirements and time frames that need to be addressed in advance of the FCC’s date. As an example, the Public Utilities Commission of Ohio is directing that all affected ILECs and CLECs file the appropriate intrastate tariff amendment application or letter of compliance on or before May 1, 2013. This alert is to warn that in many states you are not going to have the luxury of waiting until July 1 to file your rates.

These filings are due to FCC Report and Order (WC Docket No. 07-135) which adopted a transitional intercarrier compensation restructuring framework for both intrastate and interstate interexchange and reciprocal compensation telecommunications traffic. In its recent March 26, 2013 release (WC Docket No.13-76) the FCC established procedures for the 2013 filing of annual access charge tariffs and Tariff Review Plans (“TRP”) for price cap ILECs, rate-of-return ILECs and CLECs that benchmark rates to price cap or rate-of-return ILECs. The Order sets an effective date of July 2, 2013 for the July 2013 annual access charge tariff filing. The Order establishes May 17, 2013 as the date that price cap ILECs must file their short form TRP. Affected ILECs and CLECs may make their tariff filings on either a 15 or 7 day notice (prior to the effective date) therefore affected ILECs and CLECs filing on a 15 day notice must file on June 17, 2013 and those filing on a 7 day notice must file on June 25, 2013. All filings must be made using the FCC’s Electronic Tariff Filing System (“ETFS”).

You also need to be aware that as part of the annual access charge tariff filing carriers will need to include the universal service charge contribution factor for the third quarter which begins on July 1, 2013. Note that in accordance with 47 C.F.R. § 54.712 of the FCC’s rules “…if a contributor chooses to recover its federal universal service contribution costs through a line item on a customer’s bill the amount of the charge may not exceed the interstate telecommunications portion of that customer’s bill times the relevant contribution factor.”

If you need help with these filings let us know. CCG also offers a service we call Regulatory Compliance where we notify our clients each year of every regulatory filing they need to make. It’s affordable and a great way to make sure that you meet all of your regulatory filing requirements.  Call Terri Firestein at CCG if you need help or want more information. She is at (301) 788-6889.