STATE REGULATORS, CLECS OPPOSE BELLSOUTH DSL PREEMPTION REQUEST

“A state requiring an [ILEC] to provide DSL service to customers who choose to obtain local service from another carrier does not impose state regulation on interstate information services,” the Ala. PSC said. Instead, “it protects the ability of consumers to make choices about their local service provider,” the agency said: “Contrary to BellSouth’s claim, the state commission orders protecting their local customers’ rights to choice among local voice carriers violate no federal law or FCC policy… Granting BellSouth’s request for a declaratory ruling is not in the interest of competition and consumer choice. Customers of BellSouth that have DSL service will be very reluctant to change voice service providers if they cannot continue to use their DSL service.”

The S.C. PSC said although it hadn’t taken action to require BellSouth to offer DSL to competitors’ voice customers, it believed it had the right to do so. The BS request should be “denied and dismissed summarily” because it’s “improper and unwarranted,” the S.C. commission said. It said it did “not dispute that the FCC has exclusive jurisdiction over interstate telecommunications” but “the communications matter at issue is not exclusively interstate in character.”

The La. PSC, one of the states targeted by BellSouth because it had barred the carrier from denying DSL service to CLEC voice customers, said it didn’t claim to have “jurisdiction to regulate the rates or pricing of BellSouth’s wholesale or retail DSL service” but “is merely [following] the purpose of the [Telecom] Act and Louisiana law,” which require promoting competition in local markets. The PSC said its orders were aimed at “protecting against the creation of barriers to entry.” The Ga. PSC said its order requiring BS to provide DSL to competitors’ customers “was narrowly tailored for the purpose of protecting the integrity of local competition in Georgia.” The PSC said it “did not order BellSouth to cease providing its DSL service, to provide its service without adequate compensation or even what rate to charge customers for its service.” Instead it took action within its authority “and BellSouth’s request is misguided,” the PSC said.

CLECs were equally adamant in opposing the BellSouth ruling. The Promoting Active Competition Everywhere (PACE) Coalition said the state decisions were “fully consistent with the Act” and “BellSouth’s requests for relief are inappropriate on all counts.” PACE said none of the state decisions had been reversed and the one by the Ky. PSC recently was upheld by the U.S. Dist. Court, Louisville. Z- Tel said BellSouth “adopted an overtly discriminatory policy” in refusing to provide DSL service to CLEC voice customers. Now that 4 states have halted that policy, BellSouth “approaches [the FCC] with the far-fetched claim that the 1996 Act… somehow prevents state commissions from eliminating discriminatory policies adopted by [ILECs] to protect their historical monopolies in the voice market,” Z- Tel said: “BellSouth’s lengthy disquisition on the Commission’s policy that ‘information services’ remain unregulated is simply irrelevant. Under the Commission’s precedents, BellSouth’s DSL service is obviously not an ‘information service’… because BellSouth combines the provision of Internet access with broadband transmission capability.” Z-Tel also argued that BellSouth “seeks redress in the wrong venue” and should take its case to federal district courts.

AT&T and the CompTel/Ascent Alliance said there was “absolutely no conflict” between the state orders and FCC regulations on interstate or information services. There also is “no basis for the Commission to take the extraordinary step of sanctioning anticompetitive conduct that states have reasonably condemned,” the AT&T-CompTel said. MCI, also arguing for denial of the petition, said it “promotes an anticompetitive practice that it does not even attempt to defend and it mischaracterizes the preemption law which it seeks to use to shield this conduct from scrutiny.”

VoIP provider Vonage also weighed in, arguing that such “DSL tying hurts consumers by limiting choice and suppressing demand for innovative and competitive broadband and voice services.” Vonage said “BellSouth refuses to sell its ADSL broadband service to certain consumers for an overriding purpose: to protect its legacy circuit-switched services from competition from voice services offered by CLECs, wireless carriers, cable companies and voice-over-IP providers.” Vonage added: “BellSouth’s petition “relies heavily on the Commission’s apparent finding that its tying policy does not constitute discrimination against CLECs under Sec. 251. Regardless, DSL tying must be condemned as unreasonable and discriminatory against consumers, in violation of Secs. 201 and 202.”

Other Bell companies supported BellSouth’s petition, arguing that the state DSL action amounted to interstate regulation. “The Commission’s authority to regulate interstate communications is under siege by certain overzealous state commissions,” SBC warned: “The Commission should expeditiously grant the relief requested by BellSouth and preempt these unlawful state decisions, not only to preserve its jurisdiction under federal law, but also to ensure that the marketplace for broadband Internet access service develops under a uniform national policy framework rather than a thicket of conflicting and burdensome state regulations.” Verizon urged the FCC to “act promptly to declare all state commission rulings that require ILECs to provide DSL service -- either broadband transmission service or high-speed Internet access -- to CLEC voice customers preempted by the Commission’s Triennial Review Order [TRO] and beyond the scope of state commission jurisdiction.” Verizon said “requiring an ILEC to provide service over a loop that a CLEC has leased is directly in conflict with the FCC’s unanimous determination [in the TRO] that ILECs would not be required to provide the low-frequency portion of the loop as a separate UNE.”