UNE Rules Expected to Circulate Among Commissioners Today
FCC Chmn. Powell is expected to start circulating draft UNE rules among commissioners today (Wed.) so they can have input on the item before the rules are placed on the agency’s Dec. 15 agenda meeting. Lobbying has stepped up as various industry segments attempt to push their views in the much-contested proceeding. One 8th floor aide reported having 9 meetings with industry lobbyists Tues. “It’s already starting and the schedule looks pretty solid” the next week or 2, he said.
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The FCC is writing new rules to replace part of the agency’s Triennial Review Order (TRO) that was remanded by the U.S. Appeals Court, D.C., early this year (CD Nov 22 p1). The agency -- and lobbyists -- appear to focus on a handful of issues as the proceeding continues down the final stretch: (1) Whether to continue requiring competitive access to the Bells’ DS-1 loops at low-cost UNE rates. “That’s one of the biggest questions,” said an FCC staffer, and it boils down to “how CLECs get access to loop facilities to serve small business.” The FCC reportedly is leaning toward continued unbundled access to DS-1 loops. But the action doesn’t appear to be a done deal, with both CLECs and Bells arguing the issue in ex parte filings. One source said an undercurrent of concern is developing over whether continuing DS-1 access would pass court scrutiny.
(2) Related fights over whether special access could be a substitute for high-capacity loops and transport. “We've provided pages of arguments” raising the concern that “as the Bells are entering the enterprise market, becoming our competitors, there’s a potential for a price squeeze,” a CLEC lobbyist said. The Bells likewise have submitted many pages of arguments that special access rates aren’t going up and the Bells aren’t even dominant in many high-cap markets because so much competition exists.
(3) What test should be used to determine if CLECs are impaired without access to certain elements? That’s an “enormous debate,” said a lobbyist. The FCC is considering using the presence of 2 wholesalers as the criterion for finding enough competition to eliminate impairment concerns. A source said competitors like the 2-wholesaler test but Bells don’t “because there aren’t many areas where there are 2 wholesalers.” Wholesalers haven’t emerged because CLECs get locked into special access long-term contracts and can’t use competitive alternatives, the source said. “There’s ample evidence in the record to justify the adoption of a national finding of impairment or, at the very least, an actual competition test, for DS-1 loops,” ALTS said in a Nov. 19 ex parte filing. BellSouth argued in an ex parte filing that such a test is “wholly contrary” to court and FCC interpretations of the Telecom Act. The outcome would depend on whether CLECs chose to be wholesalers, BellSouth said: “The relevant question is whether consumers can receive the benefits of facilities-based competition without the social cost of unbundling, not whether individual competitors would have alternatives to the ILECs’ facilities.” Advocating a wholesaling requirement amounts to “inviting the Commission to violate the [Telecom Act] and thereby lead to yet another judicial reversal.”
(4) Definition of mass market. The FCC has eased UNE requirements for serving the mass market and the question now is whether some small businesses should be included in those mass markets, for example if Bell fiber passes their offices or stores in residential apartment buildings.