1. Washington Update Presented by: Jeff Dupree Vice President –
Government Relations
NYSTA Annual Conference
June 6, 2017
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.

2. What will Trump Administration Bring?
Still determining tech/telecom policy
$1 trillion infrastructure package?
Includes broadband
Reversal of Wheeler’s FCC
Open Internet
Privacy
Opens door to GOP direction on telecom issues
Source: nbcnews.com
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.

3. Running the Show in Congress
GOP maintains Senate and House majorities
Committees with FCC oversight responsibilities:
Senator John Thune (R – SD), retains Chair of Committee on Commerce, Science and Transportation
Rep. Greg Walden (R-OR) chairs the Committee on Energy and Commerce
Rep. Marcia Blackburn (R-TN) heads up the Communications and Technology subcommittee
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.

4. Copyright © 2017 National Exchange Carrier Association, Inc
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.

5. Copyright © 2017 National Exchange Carrier Association, Inc
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.

6. Changes at the FCC GOP FCC will be pro-competition
2-for-1 regulation elimination
Commissioner vacancies
Rosenworcel a lock for Democratic slot?
Many names still kicking around for GOP slot
Will Clyburn stay on?
Formation of the Office of Economics and Data (OED)
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.

7. Copyright © 2017 National Exchange Carrier Association, Inc
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.

8. Net Neutrality “Protecting and Promoting the Open Internet”
Original Open Internet Order released in 2010
Public disclosure
Anti-blocking requirements
Anti-discrimination
Challenged by Verizon in D.C. Circuit Court
Court ruled on January 14, 2014
Struck down anti-blocking and anti-discrimination rules
Section 706 gave FCC authority to regulate broadband Internet access service
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.

9. Net Neutrality FCC Order released March 12, 2015
No blocking, throttling or paid prioritization
No discrimination among consumers or Edge Providers
Adopts enhanced transparency requirements
Broadband Internet Access Service (BIAS) as a “telecommunications service” subject to Title II
“Light touch” application
Broad forbearance from tariffs, rates
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.

10. Net Neutrality “Restoring Internet Freedom” NPRM released May 23, 2017
Comments: July 27, 2017; replies: Aug 16, 2017
Proposed to return BIAS from Title II to Title I
Eliminate Internet conduct standard
Battle of the Data
Call to action … again
Value of “astroturfing”
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.

11. ISP Privacy Proceeding
Order released November 2, 2016
Defines information to be protected under Section 222 of Communications Act
Extends Section 222 to ISPs
Implement core principles of transparency, choice and security:
Notice on info being collected and how it is being used;
Opt-in consent for sensitive data, opt-out for non-sensitive data;
Reasonable data security practices and notice requirements in event of a breach
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.

12. ISP Privacy Proceeding
FCC’s Open Internet Order turned ISPs into Common Carriers
FTC no longer had authority to regulate ISPs due to the common carrier prohibition
Significant industry opposition to FCC’s ISP Privacy Rules
Not aligned with FTC Privacy rules
ISPs treated differently than Edge Providers
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.

13. ISP Privacy Rules -- Opposition and Rollback
FCC Order stayed implementation
Congressional Review Act used to rollback entire ISP Privacy Order
CRA is a tool to eliminate administrative regulations by Congress
Only used once prior to current Congressional session but 14 times in 2017
Prohibits agency from enacting substantially similar regulations in the future
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.

14. Privacy Rules -- What Now?
FCC proposes to reclassify BIAS as a Title I information service
FTC to resume jurisdiction and protection of consumer privacy
Rep. Blackburn introduced the BROWSER Act of 2017
Very similar to the FCC privacy rules, but:
Would require both ISPs and Edge Providers:
Implement strong privacy practices
Require customers to opt-in to the use and sharing of sensitive data
Preempts state internet privacy rules
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.

15. USF Reform Order – the Basics
USF Reform Order and Further Notice of Proposed Rulemaking (FNPRM) released March 30, 2016
Created two paths for rate-of-return carrier support:
Model-based
Alternative Connect America Fund Model (A-CAM)
Support amounts are fixed for a 10 year period
Non-model based
Based on “reformed” legacy support mechanisms
Rate of return transitions to 9.75%
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.

16. USF Reform - New Concepts
Support for standalone broadband
Operating Expense (OpEx) limitation
Capital Investment Allowance (CIA) limitation
Budget Control Mechanism (BCM)
Total RoR USF support capped at $2 billion per year, plus reserves dedicated to A-CAM
Competitive Overlap provisions implemented
Build-out obligations required to receive support
Revised reporting: the “HUBB”
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.

17. USF Reform – Implementation Stage
207 rate-of-return carriers opt-in to A-CAM
424 study areas; 18 in NY
$505 million in annual support
Alaska Plan adopted (14 companies)
Continuing to address implementation issues
Address waste, fraud and abuse?
Means testing?
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.

18. Rate Floor Order & NPRM released May 19, 2017
Freezes the floor at $18 for two years or until further action taken
Urban rate survey = $22.49
Would have increased to $20 on July 1, 2017
Seeks comment on:
Changes in methodology, or elimination altogether?
Meeting intended purposes?
Reduce administrative and compliance costs?
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.

19. Separations Freeze Order released May 15, 2017
Extends freeze through December 31, 2018
Follow-up to Further Notice of Proposed Rulemaking (3/20/17)
Comments submitted by 8 parties
Continue work with Federal-State Joint Board on Separations to overhaul rules
2 Public Notices on April 24, 2017 seeking comment on comprehensive reform
Expects recommended decision in early 2018
Copyright © 2017 National Exchange Carrier Association, Inc. All rights reserved. This presentation may be used by attendees for informational purposes only. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, or otherwise, without prior written permission of NECA.