STATE LINE-SHARING BOOSTERS BRAINSTORM FOR HAPPY ENDINGS
Defenders of state line-sharing mandates to promote competition in DSL wholesaling took heart Tues. in what they saw as the failure of the FCC’s Triennial Review order to bar state mandates explicitly. The Commission adopted a procedure that would hold off any federal court ruling ending the state rules, and meantime there were plausible scenarios that could reconcile the 5 FCC commissioners with one another and the states on the issue, they said.
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The order phases out federal line-sharing requirements over 3 years and says generally that states can’t unbundle network elements in a way inconsistent with the order. It offers a declaratory-ruling procedure to answer resulting questions about state authority. Asked about the order’s impact on state line-sharing, an FCC spokesman directed us to the declaratory-ruling provision.
Line-sharing requirements imposed independently by states such as Kan., Minn., N.M. and most notably Cal., aren’t going away immediately in any case, said NARUC Gen. Counsel Brad Ramsay. An FCC declaratory ruling would take 3- 4 months minimum and meantime any court in which the state mandates were challenged would defer the question until the Commission’s determination, Ramsay said. The FCC, for its part, would postpone its declaratory ruling pending any line- sharing stay, extension or modification sought by a CLEC such as Covad Communications that wholesaled DSL or by an ISP customer that retailed the service. Even after any declaration, litigation in a federal appeals court could take 9-12 months, during which a ban on state line-sharing could be stayed, he said.
The federal phase-out’s structure may signal an accommodation within the FCC and between it and the states, Ramsay said. The order imposes line-sharing of 25%, 50% and 75% of full loop rates in each successive year of the phaseout. That could signal the commission’s willingness to permit state sharing mandates while preempting pricing authority, Ramsay said. That outcome would please the 3 Republican FCC commissioners, he said.
Another price/sharing deal scenario was envisioned by Consumer Federation of America Research Dir. Mark Cooper. For example, he suggested that Pa. regulators could give Verizon a trade-off of pricing relief in exchange for continuing line sharing. “If the FCC says [such deals] are not inconsistent [with the commission’s regulations], Verizon is not going to win that case in court,” Cooper said.
Assoc. Gen. Counsel Jason Oxman of Covad Communications, a leading CLEC wholesaler of DSL, said paragraph 192 of the order, rejecting Bell arguments for broad federal preemption of unbundling decisions, protected the state line-sharing mandates. “We would encourage other states to adopt line- sharing rules,” he said.
Not everyone opposite the Bells at the table was so sanguine. EarthLink said it believed the FCC order issued last week conflicted with written state line-sharing mandates, so the state laws would preempted if the order withstood challenge, Law & Public Policy Vp David Baker said. “I believe the FCC order is controlling but will be subject to administrative and judicial review,” he said.
Other players, including representatives of Kan. and N.M. regulators, said they still were studying the order. “We're still looking into this,” SBC Cal. spokesman John Britton said. “SBC California does not believe that the [Cal. PUC] has the authority under state law to undermine the consistency and the purpose of the federal Telecommunications Act as interpreted by the FCC.”
Predicting how the FCC would come out on the issue is complicated by policy conflicts among individual commissioners and the political eddies swirling around their interactions, said a state regulatory authority who asked not to be identified. Prime example: Chmn. Powell and Comr. Abernathy are on record as favoring line-sharing substantively, but their protectiveness of Commission prerogatives against incursions would cut against upholding state mandates, the source said. However, Powell’s position could be influenced by his animosity toward Comr. Martin, who appeared to be the swing vote, the source said.