COMMENTS ON TRIENNIAL UNE REVIEW FLOOD FCC
Comments on FCC’s unbundled network element (UNE) regime poured into FCC late Fri., offering views from nearly every perspective. Bells asked agency to scale back on UNE sharing, CLECs warned of “irreparable” harm if that happened, Progress & Freedom Foundation said reform would encourage broadband investment, National Telecom Co-op Assn. (NTCA) urged FCC to consider impact on rural areas. Telecom industry considers UNE review one of most important regulatory actions under way at FCC because debate touches on CLEC competition, Bell company participation in broadband, other issues. Commission is considering whether current UNE list can be reduced and whether such reduction could be made on geographic or service-specific basis. UNE regime requires Bell companies to lease portions of their network to their competitors for prices that Bells say are far too low.
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SBC urged FCC to: (1) Exclude “all new network investment” from UNE requirements “because competitors cannot be impaired” from lack of access to Bell facilities that haven’t even been deployed yet. (2) Remove unbundling obligations from all facilities “used to provide service in converging markets, including broadband, wireless and interexchange markets.” (3) Prevent states from adding to FCC’s UNE list “since any effort by the states to second- guess those decisions would place in jeopardy the benefits of a coherent, balanced and predictable regulatory scheme.” (4) “Opt for less unbundling, so as to promote more facilities- based entry.” SBC Senior Vp Priscilla Hill-Ardoin said “this is a common-sense approach to ensuring the kind of competition that everyone wants, where companies compete over their own facilities, as a result of their own investment.”
BellSouth recommended FCC not only reduce UNE list but also “declare that from now on the list can only be reduced, not added to.” Carrier argued that because CLECs “have so many options to reach customers other than by using an incumbent company’s facilities, the new companies’ ability to compete is clearly not impaired by lack of access to pieces of an incumbent’s network.” Allowing competitors “to have a subsidized ride on incumbent facilities discourages incumbents and competitors from building new facilities,” BellSouth said. FCC should consider “economic and social” benefits of encouraging multiple facilities-based networks “such as redundancy in cases of emergencies.”
USTA Pres. Walter McCormick said: “This proceeding is an opportunity for the Commission to reassess today’s overly restrictive regulations that have stifled development in some sectors of the telecom infrastructure, creating a negative environment for future investment and growth for… ILECs. For many of these elements, like switches and transport, there are alternative providers who offer the same services.” He said that “for this reason, ILEC competitors would not be impaired if they are removed from the FCC’s list of mandated UNEs.” Making it easier for ILECs to invest in new infrastructure by easing UNE requirements also would benefit consumers, USTA said.
CompTel Pres. Russell Frisby said FCC had opportunity to reinvigorate local competitive market if it kept UNEs, or harm it “perhaps irreparably,” if it “removes any UNE or combination of UNEs from the existing list.” He said FCC’s suggestion some UNEs could be removed from list of available elements had “created more uncertainty in the already beleaguered telecom industry. This has made it even more difficult for competitive carriers to raise additional capital to continue with their business plans.” Frisby said CompTel’s filing with FCC made case that availability of UNEs fostered broadband deployment “by facilitating competition, basic tenet of Telecom Act’s Sec. 706. It opposed making distinction between new and old ILEC facilities as means of determining CLEC access to incumbent networks, he said, and urged Commission to declare enhanced extended links (EELs) as stand-alone UNEs. CompTel also asked FCC to convene federal- state joint conference on UNEs, since state regulators had significant stake in issue.
Only realistic entry vehicle for competitors is UNE- Platform (UNE-P), said Assn. of Communications Enterprises (ASCENT). Dismantling UNE-P by lessening number of UNEs or their geographic availability would “end any hope” of widespread competition in U.S., it said. ASCENT accused FCC of using triennial review as “a thinly disguised effort to eliminate the [UNE-P] as a viable entry vehicle.” Resale is another entry method for competitors but will work only if margins are adequate, said ASCENT, which has resellers in its membership. “Unfortunately, the law does not produce discounts sufficient to support a viable local service offering” using resale, group said.
FCC’s unbundling regime is “a major deterrent to investment” in broadband infrastructure, Progress & Freedom Foundation (PFF) said in news release issued at same time it filed comments with FCC. Comments filed by PFF Senior Fellow Randolph May and Adjunct Fellow Larry Darby said it was possible for FCC to modify UNE process in way that could “promote new investment and sustainable competition at the same time.” PFF said FCC should: (1) “Exercise forbearance authority” to narrow availability of UNEs. (2) Sunset UNE framework to “reach the facilities-based endgame that the agency acknowledges best promotes consumer welfare.”
Noting that rural telcos were exempt from unbundling rules, NTCA urged FCC not to make “sweeping regulatory changes” that nonetheless could affect rural carriers. Indicating concern about how UNE changes might have impact on broadband rollout in rural U.S., NTCA told agency: “If regulatory changes are necessary to encourage advanced services and broadband deployment to urban markets, the Commission should be flexible in the implementation of those changes. Rules that work for urban areas do not always work for rural areas.”