APPEALS COURT DENIES REHEARING OF LINE-SHARING, UNE REMAND CASES
Giving ILECs victory, U.S. Appeals Court, D.C., said Thurs. it wouldn’t rehear pair of May 24 decisions that remanded FCC orders on line-sharing requirements and unbundled network elements (UNEs) (CD May 28 p1). In both, court had questioned whether FCC had gone too far in UNE requirements it set for ILECs. However, it also gave competitors victory by agreeing to stay orders until Jan. 2, 2003. FCC and competitors had asked for stay because Commission was reviewing its UNE requirements now and planned to end proceeding by end of year. As part of that review, FCC is looking at some of same issues as court raised.
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In UNE order, court said FCC mandated unbundling in every geographic market without regard to state of competition in particular markets. Line-sharing case focused on requirements that ILECs unbundle portion of their copper loops so CLECs could use it to offer competitive DSL service. Court said FCC had failed to consider broadband competition in larger context of not just DSL but alternatives provided by cable and satellite. Commission had asked court to rehear both UNE and line-sharing decisions, saying ruling conflicted with earlier U.S. Supreme Court decision on TELRIC [total element long-run incremental cost] pricing rules as well as with Telecom Act.
BellSouth (BS) said it was “gratified that the court has held its ground on these crucial matters” because “forcing the incumbent phone companies to subsidize their competitors makes no sense.” BS said it wanted to make clear that “we understand that we are required to share portions of our network that are truly necessary for competition.” However, “it is the below-cost pricing of network pieces that do not meet the legal ‘necessary and impair standard’ that we object to,” company said. USTA said it hoped for “expeditious action” by FCC on UNE remand proceeding. With stay expiring at end of year, “both judicial mandate and a return to economic growth require the Commission to meet the… goal of completing action on these important issues by the end of the year,” USTA Pres. Walter McCormick said. SBC called court’s action “a victory for consumers, competition and the health of the industry.” It said court’s action offered “clear guidance” for FCC to complete its UNE proceeding by end of year as promised.
Covad, which had supported FCC’s request for rehearing, said it also was pleased by court’s decision because it granted request of Covad and others to stay effective date of orders. CompTel urged FCC to seek Supreme Court review for same reasons it gave for seeking rehearing by appeals court - - that decision was “fundamentally in tension” with Supreme Court’s TELRIC ruling and provisions of Telecom Act. “It is extremely important to the future of the telecom industry to clear up discrepancies about this ruling quickly and justly,” CompTel Pres. Russell Frisby said.