APPEALS COURT MULLS FCC-COMPTEL DISPUTE OVER EELs RULES
In case brought by CompTel, U.S. Appeals Court, D.C., Thurs. asked lot of questions in oral argument about FCC’s decision to place usage restrictions on enhanced extended links (EELs), but didn’t give any indication whether it would uphold agency’s Nov. 2000 ruling. CompTel attorney Robert Aamoth told court that FCC’s decision had virtually halted CLEC use of EELs by setting use rules that were impossible to follow, even though Telecom Act supported CLEC requests for combinations of unbundled network elements (UNEs) such as EELs. FCC attorney John Ingle said agency was within its authority to place restriction on using EELs until it could make final decision in its pending UNE review proceeding on its concerns about EELs.
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EEL is controversial combination of network elements -- composed of local loop and dedicated transport element -- that competitive LECs want to use to provide local service more efficiently. Bell companies have opposed making EELs available to competitors because combination also can be used to provide long distance service to customers. Using EELs for long distance could undercut special access service, which is money-maker for Bells. They also have warned that if EELs, rather than special access, is used to provide long distance, contributions to universal service fund could go down. Adding to complications, tariffed special access also is used by CLECs to provide local service, in fact they have wanted to move to TELRIC-priced EELs because it costs them much less to reach customers than with special access service. FCC voted to require that EELs be used only for local service, set complicated traffic tests for determining whether circuit was used primarily for local traffic and barred any “co-mingled” circuits carrying both EEL traffic and tariffed special access service.
Also at issue in hearing was court’s concern about jurisdictional issue. It had asked parties to address question whether it was timely for CompTel to bring such challenge. At issue is fact that FCC had ruled on EELs in 2- step process, first issuing order under which EELs usage restriction would have expired in June 2000 and then issuing supplemental order extending restriction indefinitely. Both Aamoth and Ingle agreed that it wouldn’t be timely to challenge first order but Aamoth argued that CompTel’s appeal was based on 2nd one, which still was in effect. However, Ingle said CompTel’s arguments centered on FCC actions that were in first order: “It was the original order that created the restriction discussed here.”
Judge Stephen Williams debated with Aamoth briefly about fact that Telecom Act focused on UNEs primarily as means of providing local service, saying FCC order appeared to follow that guidance “in terms of drawing a line” between EELs provision for local and long distance service. Judge Judith Rogers asked several questions about CLECs’ argument that local traffic test, known as “safe harbor,” made it impossible for CLECs to use EELs. It’s very hard to verify amount of local and long distance traffic on particular circuit, Aamoth told her. Cost of developing such statistics offsets savings of using EELs, he said. Third judge, Harry Edwards, asked few questions.
Mark Schneider, representing WorldCom, said co-mingling restriction were “unnecessary to keep long distance providers from cheating” because that’s not what CLECs wanted to do: “It makes no sense. Competitors want loops. The co-mingling bar ought to be struck” if nothing else. He said co-mingling requirement was impossible to meet because “in a network, local and long distance lines are always combined. That’s the way the network is designed.” He said local and long distance lines both were connected to transport link and separating them would be “grossly inefficient.” In answer to Judge Rogers’ request for explanation of why it was inefficient, he said carriers would have to provide duplicate facilities where now they used only one.
Asked by Williams about co-mingling issue, Ingle said FCC found “no basis in the record to give it confidence that [EELs] would be used only for local service… If the transport element was obtained under an EELs combination, that element would be carrying not just EELs-eligible traffic but also interstate traffic ineligible [for EELs treatment]. A nefarious CLEC could design [network] so it had one local customer and then roll all of its [interstate] traffic into one.” Ingle said FCC’s decision was “a matter of line drawing.”
Also debated was whether use of EELs for long distance service would reduce universal service funding, as Bells and FCC have feared. Judge Williams appeared particularly interested in competitors’ argument that CALLS access charge revision negated lost universal service argument because it eliminated implicit subsidies from access charges. Ingle told Williams that there still was some subsidy in access charges but Aamoth said CALLS order indicated otherwise.