ILECs Back USTelecom’s Forbearance Petition, Heap Scorn on Legacy Telecom Regulations

AT&T supported the petition entirely, arguing “it would be perverse to continue regulating ILECs as though they were still 1980s-era monopolists when some commentators have predicted that cable companies are likely to end up as broadband monopolists in their own right” (http://xrl.us/bm45k2). The “outmoded or counterproductive rules” were “designed for a monopoly era long since passed” and “serve no purpose today,” frustrating the commission’s “core ambition to facilitate the transition from legacy PSTN [public switched telephone] networks to the all-IP network of the future,” AT&T said. The ILEC also argued the rules targeted in the petition “disproportionately hobble one set of competitors -- ILECs -- that are no longer dominant in any relevant market."

Verizon also supported the petition, arguing the legacy regulations are “unnecessary,” “impede investment in next-generation networks,” and “offer no countervailing benefits” (http://xrl.us/bm45mi). Procedural objections over USTelecom’s standing to file the petition “can quickly be dismissed,” the telco said, because no such standing requirement exists, and the FCC has granted industry-wide relief in response to forbearance petitions filed by trade associations. Verizon also rejected objections that USTelecom failed to provide sufficiently granular market data to warrant forbearance, as “the evidence set forth clearly demonstrates sufficient competition at the national level to warrant forbearance."

At a minimum, said SureWest, the commission should grant forbearance from the equal access scripting requirements (EASR) to ILECs like itself subject to wireline competition (http://xrl.us/bm45mx). The “equal access scripting” rule is a requirement that sales personnel offer to consumers calling to sign up for service a list of all available long distance companies. The FCC granted forbearance from such rules to the Bells and their independent ILEC affiliates in 2007 (CD Sept 4/07 p1). SureWest believes the scripting requirement “has also outlived its utility overall and -- in light of prevalent competition in LEC markets due to changes in technology and consumer use -- the EASR should be forborne for all ILECs.” USTelecom made a “compelling case” that the FCC should forbear from applying the scripting requirements to the small and mid-sized independent ILECs that remain subject to the requirement, the telco said. “The continued existence of the EASR distorts and harms the competitive environment, particularly for companies like SureWest who already face significant competition."

The NTCA called equal access scripting requirements “a decades-old vestige of a post-divesture time when long distance competition was novel and consumers had little, if any, awareness of choice in the selection of interexchange carriers” (http://xrl.us/bm45nb). Customers now are aware of the “panoply of traditional and newer choices for communications services,” NTCA said. Frontier, which focused its comments on various Part 32 accounting rules, supported the petition “as a necessary vehicle to eliminate unnecessary regulation that drains resources from communications providers without benefit to the public interest or competitive market” (http://xrl.us/bm45nm). Such outdated and costly regulatory obligations “all too often divert scarce resources from broadband deployment,” it said.

Public utility commissions that filed replies uniformly opposed the petition. The Pennsylvania PUC is concerned that forbearance would “would unlawfully preempt and undermine regulatory obligations that exist under independent state law, including carrier of last resort requirements” (http://xrl.us/bm45qz). Pennsylvania also noted that forbearance and similar pleadings like a declaratory ruling are “inappropriate vehicles to examine complicated matters governed by federal rules.” The PUC suggested a rulemaking proceeding with appropriate notice and comment as the “lawful and far superior approach.”

The Michigan Public Service Commission agreed with earlier comments by CompTel and Broadview Networks questioning whether USTelecom, an association, has standing to obtain requested relief on behalf of carriers. “The Petition does not appear to be signed on to by any carrier,” MPSC wrote, arguing the apparent lack of support by “all ILECs” or “all price cap ILECs” calls into question USTelecom’s ability to “request forbearance for such a broad classification.” MPSC is concerned about proposed elimination of various interconnection requirements, and the effect it would have on customers who require access to the telephone network for their alarm and home security systems. The Alarm Industry Communications Committee echoed those concerns (http://xrl.us/bm45ru).

The District of Columbia PSC argued that the requested removal of some reporting requirements would leave state commissions “unaware of network changes and discontinuances of service that will directly affect consumers, hindering state commission efforts to educate and assist them” (http://xrl.us/bm45rm). Some rules USTelecom wants forbearance from discuss notice procedures regarding changes to an ILEC network that will affect a competitor’s ability to provide service, such as a 90-day notice requirement before retirement of copper loops. That period affords affected carriers the opportunity to file objections, and D.C. said it’s “unclear whether there would be any ability to object to such retirements if the FCC ceased issuing the public notices.”