FCC SCHEDULES UNE VOTE FOR FEB. 13 MEETING

Meeting notice issued late Thurs. ends flood of ex parte meetings and letters and gives commissioners time to reach agreement on key issues. Notice said only that Commission would consider order “concerning incumbent local exchange carriers’ obligations to make elements of their networks available on an unbundled basis.”

FCC commissioners as late as Wed. still hadn’t agreed on key issues, and one lobbyist said he was surprised staff still was looking at very fine points such as how many of particular UNE had to be present to be considered competitive. As almost-frantic last min. lobbying continued, lawyer involved in writing original UNE rules under then-FCC Chmn. Reed Hundt said tenor seemed more angry now. He speculated that, when rules were written, goal of competitors was to make money and now it’s to say alive. Rough count showed more than 4 dozen ex parte letters were filed in 2 days, indicated visits to FCC offices and letters sent to Commission.

Meanwhile, Small Business Administration (SBA) Office of Advocacy urged FCC to conduct another Regulatory Flexibility Analysis (RFA) on its UNE proceeding, saying Commission hadn’t properly considered impact on small CLECs of possible action to delist UNEs. SBA said that FCC did first RFA in connection with rulemaking but Commission then changed nature of proposal: “Many small businesses have brought to Advocacy’s attention that the Commission is considering rules that were not proposed in the NPRM. Of particular concern is the possibility that the FCC is considering removing elements from the list of ILECs’ UNE obligations. If the Commission is considering this step, then the current [RFA] is inadequate because it does not analyze the impact of delisting UNEs on small CLECs.”

SBA said it didn’t support eliminating UNEs from current list but if FCC chose to do that, it should “set up objective performance requirements for the removal of UNEs and allow the state… PUCs to determine when those conditions are met. This will take into account the varying circumstances from state to state and region to region. Furthermore, it will give the incumbent incentive to encourage competition on a particular switch.”

New South Communications sent White Paper to FCC Wed. countering filings by Bell companies that it said were efforts “to subvert the overriding facts that carriers are impaired without access to DS-1 loops and/or EELs.” In accompanying letter, New South said BellSouth and Qwest had proposed usage restrictions that exceeded current FCC restrictions and Verizon had urged agency to preclude competitors from providing broadband service using DS-1 or EELs. Among New South’s arguments: (1) Bells were seeking to preclude competitive carriers from offering bundled packages of broadband and voice services but FCC had recognized in earlier order that carriers would be using DS-1 loops and EELs to provide integrated voice and data services. Many competitors are using EELs to provide data as well as voice services and are permitted to do so under current FCC rules. It’s misleading to say CLECs are seeking “arbitrage opportunity.”

(2) FCC, to restrict DS-1 and EELs, would have to find that carriers weren’t impaired without those elements. “No such finding can be made on the record in this proceeding [and there’s] uncontroverted evidence there are no alternatives for DS-1 level loops and transport, and virtually no self-provisioning is possible.” (3) “Evidence of competitive supply of traditional special access market has little relevance to the ability to competitively supply DS-1 loops/transport for integrated T-1 services.” (4) “Continued access to DS-1 loops and EELs for integrated T-1 service in no way can be considered to dampen financial incentives for deploying fiber to the home.” (5) There are other ways to protect existing special access market “without destroying competition for integrated T-1 services.” For example, New South said, granular impairment tests such as one advocated by Allegiance Telecom can assure competitors don’t obtain UNEs where there is no impairment. If more restrictions were sought, then Commission should adopt test “narrowly and precisely focused on traditional special access services” used by long distance companies.

AT&T Chief Technology Officer Hossein Eslambolchi sent letter to FCC saying that use of intermodal competition as rational for changes in UNE policy wasn’t appropriate because “intermodal competition simply is not ready to provide thriving broadband and voice services to a national audience in the near future.” He said AT&T was committed to such new technologies but “ironically, premature relief for the Bell companies would undercut, not promote, the stated objective of stimulating competition between technologies.” New technology development actually could become stifled, “further disrupting a still-stressed and undercapitalized industry.”

ALTS filed report by JPMorgan saying FCC’s decision was likely to have “little to no impact” on equipment spending, despite arguments by some that it would encourage more Bell investment in broadband facilities. Jan. 16 report said: “We firmly believe that RBOC spending will only increase in response to a reacceleration in revenue growth, an event that we believe is far more dependent on macro and secular issues than on the return of the roughly $2.3 billion in revenue lost to CLECs from UNE-P.”

Small Business Survival Committee issued statement saying: “Small business people don’t expect handouts from the federal government. Like many Americans, however, we are outraged when powerful corporate interests use complex and obscure government proceedings to… self-centered ends. In the current case of national telecommunications policy, it is clear that small businesses and entrepreneurs -- both as consumers and competitors -- are being ignored.” New Edge Networks made “11th hour appeal to the FCC to do what is right in the spirit of open competition as intended by the Telecom Act,” CEO Dan Moffat said. Facilities-based New Edge said it provides broadband services by relying on Bells for high-capacity loops, dedicated interoffice transport and line sharing. Company said it had no competitive options for such services in nonmetro markets and would suffer if access to Bell broadband facilities were limited.