August 11, 2020 V IA ECFS Ms. Marlene H. Dortch Secretary Federal - PDF document

KELLEY DRYE & W ARREN LLP A LIMITED LIABILIT Y PARTNER SHIP WASHINGTON HARBOUR, SUITE 400 N E W Y O R K , N Y F A C S I M I L E 3050 K STREET, NW C H I C A G O , I L ( 2 0 2 ) 3 4 2 - 8 4 5 1 WASHINGTON, DC 20007 H O U S T O N , T X w w w . k e l l e y d r y e . c o m L O S A N G E L E S , C A S A N D I E G O , C A ( 2 0 2 ) 3 4 2 - 8 4 0 0 S T E V E N A . A U G U S T I N O P A R S I P P A N Y , N J S T A M F O R D , C T D I R E C T L I N E : ( 2 0 2 ) 3 4 2 - 8 6 1 2 B R U S S E L S , B E L G I U M E MA I L : s a u g u s t i n o @ k e l l e y d r y e . c o m A F F I L I A T E O F F I C E M U M B A I , I N D I A August 11, 2020 V IA ECFS Ms. Marlene H. Dortch Secretary Federal Communications Commission 445 12 th Street, SW Washington, D.C. 20554 Re: XO Communications Services, LLC, Application for Review by XO Communications Services, LLC of Decision of the Wireline Competition Bureau , CC Docket Nos. 96-45 and 97-21, WC Docket No. 06-122 Dear Ms. Dortch: Pursuant to Section 1.1206(b) of the Commission’s Rules, XO Communications Services, LLC (“XOCS”) 1 provides this letter as a follow up to meetings held with several legal advisors between August 5 and August 7, 2020, regarding a draft order addressing XOCS’ Application for Review of a decision of the Wireline Competition Bureau, which was placed on circulation on July 24, 2020. In the recent meetings, XOCS argued that the 2017 Private Line Order by the Wireline Competition Bureau should be reversed. XOCS argued that the Private Line Order misinterpreted the Separations Order 2 establishing the “Ten Percent Rule” and reached a result 1 After the initial appeal was filed in 2010, XOCS converted its corporate form to a limited liability company (“LLC”). In 2017, Verizon Communications, Inc. acquired the fiber- optic network business of XO Communications, including XOCS. XOCS is now a subsidiary of Verizon Communications. 2 MTS-WATS Market Structure (Jurisdictional Separations for Mixed Use Special Access Lines), 4 FCC Rcd 5660 (1989) (Separations Order); see MTS and WATS Market 4847-0081-9911v.1

KELLEY DRYE & WARREN LLP Ms. Marlene H. Dortch August 11, 2020 Page 2 inconsistent with the Joint Board’s recommended certification-based regime. Moreover, XOCS argued that, if the Commission does not overturn the Private Line Order , as XOCS requested in its May 1, 2017 application for review, 3 it should follow FCC precedent by granting a retroactive waiver to XOCS or applying the Private Line Order only prospectively. Waiver or prospective relief are appropriate because of the widespread confusion regarding the Ten Percent Rule that preceded the Bureau’s order. Because of the lengthy history of this case (dating back to services provided thirteen years ago, in 2007) and because relevant arguments were made in the audit, in the initial appeal, on remand before USAC or in the application for review stage, XOCS supplements its arguments with the attached summary information. In the attached chart, XOCS provides quotations from the relevant separations orders, post- Separations Order statements creating confusion, and a comparison showing how the Bureau’s Private Line Order deviates from the Separations Order and creates new evidentiary requirements for private line service providers to support their jurisdictional classification of services. In particular, the Separations Order carefully selected the certifications-based process to administer the Ten Percent Rule. In doing so, the FCC (and, before it, the Joint Board) considered but rejected other methodologies as overly burdensome. For example, the Joint Board rejected allocation-based methods of separating interstate and intrastate costs because these methods would require traffic studies or usage-based information that would be burdensome to produce. 4 The Joint Board recommended a direct assignment methodology because “direct assignment should not require additional traffic studies and reports or necessitate changes in LEC billing systems.” 5 The Joint Board ultimately chose a de minimis standard and Structure, Amendment of Part 36 of the Commission’s Rules and Establishment of a Joint Board , 4 FCC Rcd 1352, 1357, ¶ 32 (1989) (Joint Board Recommended Decision). 3 XO Communications Services, LLC Application for Review of Decision of the Wireline Competition Bureau , CC Docket Nos. 96-45, 97-21, WC Docket No. 06-122 (May 1, 2017) (“ Application for Review ”). 4 See Joint Board Recommended Decision , 4 FCC Rcd at 1356, ¶ 25 (rejecting allocation methods because traffic data is not available, noting that “LECs cannot readily measure state and interstate special access traffic” and that “many special access customers do not measure their relative state and interstate special access traffic and cannot do so without incurring additional expenses.”) 5 Id. , ¶ 29. 4847-0081-9911v.1

KELLEY DRYE & WARREN LLP Ms. Marlene H. Dortch August 11, 2020 Page 3 the accompanying certification regime to administer it because the test “is reasonable and would be sufficient to address the existing problems.” 6 As shown in the attachment, the Bureau’s new requirements, however, upend the administrative simplicity of the customer certification regime established by the Joint Board and the FCC. The Bureau’s tests in effect require carriers to provide circuit-specific documentation of intrastate usage or to meet a “high standard” to document that it is not possible for the circuit to carry more than 10% interstate traffic. This effort is a fool’s errand, particularly as applied to services provided well before the Bureau’s order. It is manifestly unfair to apply these new requirements retroactively to services XOCS provided in 2007. 7 Accordingly, following precedent identified in XOCS’ June 4, 2019 ex parte letter, 8 the Commission should either rule that the Private Line Order applies prospectively from its effective date or grant XOCS a waiver of the requirements as they relate to its services offered in 2007. For the reasons discussed above and in XOCS prior submissions, XOCS respectfully requests that the Commission grant a retroactive waiver to XOCS or establish 6 Id. at 1357, ¶ 31. 7 See Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991; Petitions for Waiver and/or Retroactive Waiver of 47 CFR Section 64.1200(a)(2) Regarding the Commission’s Prior Express Written Consent Requirement , CG Docket No. 02-278, DA 19-562 (rel. June 13, 2019); Application for Review filed by Anda, Inc.; Petitions for Declaratory Ruling, Waiver, and/or Rulemaking Regarding the Commission’s Opt-Out Requirement for Faxes Sent with the Recipient’s Prior Express Permission , CG Docket Nos. 02-278 and 05-338, Order, 29 FCC Rcd 13998, 14000 (2014) (“ Anda Order ”); cf. Request for Review by InterCall, Inc. of Decision of Universal Service Administrator, CC Docket No. 96-45, Order, 23 FCC Rcd 10731, 10731, 10732 (2008) (“InterCall Order”). 8 See XOCS Letter in Support of Application for Review , CC Docket Nos. 96-45, 97-21, WC Docket No. 06-122 (filed June 4, 2019) (“ Letter ”). 4847-0081-9911v.1

KELLEY DRYE & WARREN LLP Ms. Marlene H. Dortch August 11, 2020 Page 4 prospective application of the new standards in the Bureau’s Private Line Order . Please do not hesitate to contact me with any questions or concerns. Respectfully submitted, Steven A. Augustino Counsel to XO Communications Services, LLC 4847-0081-9911v.1