HOUSE MEMBERS WANT FCC TO DELAY UNE, WIRELINE PROCEEDINGS

Group asked for response by Jan. 31 explaining how proceedings would address concerns for consumers, CLECs, long distance companies, independent ISPs, state regulators, small businesses. Members told FCC their concerns were based on what they had heard from those groups.

Letter outlined concerns including: (1) Consumer advocates’ worry that proposals would lead to higher rates for local telephone and broadband services. Members cited statistics that said competitive carriers generally charged 10-50% less than Bells and that consumers saved $9 billion yearly from competition. (2) CLECs, most of which were small businesses, could be forced out of business. (3) Bell companies would gain enormous advantage over long distance companies. As 35 states have approved Bells for long distance, they could be only ones able to offer long distance and local bundle. (4) Independent ISPs could be forced out of business if FCC allowed Bells to give their ISPs preferential treatment. (5) State regulators were concerned they would be preempted by FCC regulations and their ability to approve long distance services and ensure local competition would be undermined. Such preemption would “unnecessarily” expand federal govt. role over local telecom issues. (6) Small businesses could lose opportunity to obtain competitive services. FCC should assess that impact under Regulatory Flexibility Act, which requires agencies to analyze how regulations affect small businesses.

Group said FCC Chmn. Powell’s testimony Jan. 14 to Senate Commerce Committee “further confirmed our fears,” although members didn’t cite any specific statements by commissioners, all of whom testified at hearing on telecom competition. Group did say recent U.S. Appeals Court, D.C., decision didn’t mandate that FCC unilaterally dismantle open network provisions of 1996 Telecom Act. FCC’s decisions in those proceedings also could undermine Congress’s intent when passing Act, they said. “Rather than rewriting the 1996 Act by administrative fiat, the FCC needs to enforce the Act as Congress intended, to ensure that competitors have access to the telephone network,” letter said. Other letter signers included Reps. Brown (D-O.), Cannon (R-Utah), Capps (D-Cal.), Delahunt (D-Mass.), DeGette (D-Col.), Deutsch (D-Fla.), Eshoo (D-Cal.), Harman (D-Cal.), Keller (R-Fla.), Lofgren (D-Cal.), Markey (D-Mass.), McCarthy (D-Mo.), Nadler (D-N.Y.), Osborne (R-Neb.), Pallone (D-N.J.), Stupak (D-Mich.), Waxman (D- Cal.), Wolf (R-Va.). Last year, more than 100 members of House sent letter to FCC supporting revisions of UNE.

Meanwhile, on another UNE issue, High Tech Broadband Coalition (HTBC) said Fri. it was concerned that FCC might allow some competitive access to new broadband facilities built by Bell companies and other incumbent telephone companies. Members of coalition -- 6 high-tech trade associations -- told FCC in letter they were concerned that “some inside the Commission may be considering” allowing competitors to have access to new broadband network facilities up to set amount of bandwidth. Such access would greatly reduce amount of fiber build-out planned by ILECs, coalition members told reporters at briefing. It wouldn’t matter that such a plan would limit amount of bandwidth competitive telco could obtain through unbundling, Intel Communications Policy Dir. Peter Pitsch said. Bottom line is that it would open broadband build-outs to unbundling and that could be enough to discourage ILECs from building, he said. Pitsch said Bell companies had expressed concern they wouldn’t be able to recoup their costs adequately if they were required to make those facilities available to competitors at low rates.

Coalition members said there had been lot of uncertainty about what Commission was considering doing but there had been some reports that members of staff and perhaps some Commissioners’ offices are looking at such idea for sharing broadband networks. Pitsch said that in case that was being discussed, “we decided we should lay down our marker.” Coalition, which is interested in issue because its members benefit from equipment and software sales when Bells and others build facilities, warned FCC that this “unbundling lite” idea for competitive broadband access “would create risk and uncertainty in the marketplace.”

HTBC has proposed that FCC exclude ILECs’ last-mile packet-based facilities, including fiber, remote terminals and electronics, from unbundling requirements but continue to assure competitive access to all existing non-packet loops. Under coalition plan, Bells in some cases would have to maintain old copper loops in parallel with new broadband packet facilities, giving CLECs access to those existing loops but not to new broadband facilities. “By distinguishing between legacy and last-mile packet-based facilities, we believe that this framework provides a clear and competitively sound demarcation that would promote broadband investment, deployment and facilities-based competition,” letter said. Members of coalition said imposing even limited unbundling on broadband facilities could open door to more unbundling by future Commissions, require lengthy regulatory proceedings and raise legal questions. HTBC member associations represent computer, telecom equipment, semiconductor, consumer electronics, software and manufacturing sectors. Companies involved include Alcatel, Catera, Corning, Intel. Broadband access issue is part of FCC’s Triennial UNE Review, which agency is expected to consider at its Feb. 13 agenda meeting.

Also Fri., teleconference sponsored by Voices for Choices (VfC) highlighted study by Economics & Technology Inc. that showed competition in UNE-P environment would result in $6 billion in savings for small businesses each year. Study said significant retail level competition would be “impossible” without UNE-P. Promoting Active Competition Everywhere (PACE) Coalition said new data showed UNE-P could be more critical to small businesses than to residential consumers. “Small business benefited particularly from UNE- P,” said Lee Selwyn, Economics & Technology pres. He said business customers who were ILEC customers still benefited from UNE-P since it forced ILECs to keep their prices stable and services up to date. “We believe that competition for dial tone stimulates competition to other services,” Selwyn said.

Study said small businesses spent $30.3 billion per year on telecom services and average monthly telecom-related expense for 5.7 million individual firms was $439 per month. Under proposal to continue UNE-P regulations for existing infrastructure, but exempt ILEC sharing requirements for new facilities, their average annual savings would total $1,050, study said. Proposal isn’t fair compromise, Selwyn said. It especially would be problem once ILEC began replacing copper wire with fiber, he said. Joseph Gillan, economic adviser to PACE, said better solution would be to create bandwidth cap for competitors on fiber lines. “Competitors would still gain access, but ILECs would be required to unbundled all their bandwidth,” he said.

Study said most small businesses lacked sufficient service demand to justify construction of new facilities by CLEC, so UNE-P service was “the only alternative” to service by Bell companies. ETI said combining savings estimates developed in its study with $9.2 billion in consumer savings projected by CompTel, U.S. economy would save more than $15 billion by allowing local competitors access nation’s network.