Cable-CLEC Forbearance Order Remains on Track for FCC Approval
Few if any changes were expected to be made to a draft FCC order granting the NCTA’s request for forbearance from certain rules related to cable operators buying CLECs, agency officials said Wednesday. A draft granting the NCTA petition for forbearance from Section 652(b) of the Communications Act circulated last month (CD Aug 23 p2) and would let cable operators and CLECs combine when they have operations in the same area without needing FCC waivers. The petition will be deemed granted Sept. 19 should the commission fail to act before then.
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Agency officials told us they expect the uncontroversial order to be voted on unanimously before that point. The draft hasn’t received any edits since it was circulated, officials said. There could be some minor changes made over the next few days, one said. Commissioner Ajit Pai told a Carnegie Mellon crowd in July that he supported using the commission’s forbearance authority to make clear that Section 652’s requirements do not apply to transactions between cable operators and CLECs, “who almost by definition do not exercise market power” (http://xrl.us/bnhcbf). A quiet period on the item was set to begin Wednesday evening (CD Sept 4 p16).
Industry lawyers made their last-minute arguments for and against the draft order before that quiet period became effective, ex parte notices in docket 11-118 show. National Association of Telecommunications Officers and Advisors Executive Director Steve Traylor spoke with aides to Commissioners Mignon Clyburn and Jessica Rosenworcel Wednesday to argue against granting the petition, an ex parte notice shows (http://xrl.us/bnoisb). Traylor questioned the need for granting the forbearance petition given that few cable operators have sought such waivers in the past. He suggested the item retain local franchise authority oversight over cable-CLEC mergers, the notice said. “I voiced concern that any preemption of LFA authority in this order could potentially be carried over to other areas where LFA approval is required,” the notice said. “It is my understanding that the proposed order retains the requirements for LFA approval of mergers between cable operators and CLECs.”
American Cable Association President Matthew Polka wrote to the commissioners to push for adopting the item. “Cable operators and CLECs are non-dominant providers of telecommunications services, lacking market power in the provision of local exchange services,” he wrote. “In addition these entities largely operate in different segments of local markets, with the cable operators serving residential customers and CLECs business customers.” Cable-CLEC deals would still be subject to other elements of the act, the letter said. Some CLECs are getting into cable operators’ traditional business (CD Aug 22 p9).
CenturyLink attorneys last week met with an aide to Pai, an ex parte notice shows (http://xrl.us/bnoitg). They argued the FCC should only grant the NCTA’s petition if it also grants “corresponding forbearance to incumbent local exchange carriers” from their Section 251(c) obligations, the notice shows.