DoJ RECOMMENDS FCC APPROVE VERIZON'S SEC. 271 PETITION FOR R.I.
Dept. of Justice recommended Fri. that FCC approve Verizon’s Sec. 271 application for R.I., although it suggested Commission “carefully review Verizon’s pricing of unbundled network elements [UNEs].” In one of its more positive evaluations of Sec. 271 petitions, DoJ concluded that “Verizon has generally succeeded in opening its local markets in Rhode Island to competition” and, subject to FCC’s “satisfying itself” on pricing issues, recommended approval. Telecom Act calls for DoJ to make recommendation -- or “evaluation” -- to FCC although Commission doesn’t have to follow that report.
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“Competitors have made significant entry into local telecommunications markets” in R.I., DoJ Antitrust Chief Charles James said. “The vast majority of Rhode Island customers now have a choice when it comes to deciding who will provide their local phone service.” Dept. said competitive opportunities were available to business and residential customers, offered by facilities-based as well as reseller companies. Under Sec. 271 of the Telecom Act, former Bell companies can enter long distance market only if they prove to FCC that they have opened their local markets to competition.
Justice said it was satisfied with operations support systems (OSS) used by Verizon, noting they were same OSS systems used in Mass., which already has gained Sec. 271 entry approval from FCC. “Moreover, there have been few complaints regarding Verizon’s Rhode Island OSS,” DoJ said. However, it said, there have been several complaints by competitors about pricing of UNEs. It urged FCC “to look carefully at these comments in determining whether Verizon’s prices are cost-based.” Justice said it would defer to FCC on that issue because of Commission’s “experience and expertise in rate-making issues.” DoJ said “while there is significantly less competition to serve customers by means of the UNE platform” it didn’t believe there were any “material nonprice obstacles” to competition in R.I.
Verizon Vp Sarah Deutsch said company was “obviously pleased” because DoJ “has recognized that Verizon has succeeded in opening its local markets in Rhode Island to competition.” She said recommendation gave Verizon confidence FCC would approve application and give R.I. residents benefit of “even greater competition” that occurred when Bell companies received Sec. 271 approval. Competitor AT&T said it agreed with DoJ that FCC should analyze Verizon’s UNE prices carefully. “Consumers will only benefit when the pricing requirements of the Act are enforced and margins are sufficient to allow competitors to offer local services using Bell company network elements,” AT&T said.