COMPETITORS PREDICT OVERTURN OF D.C. CIRCUIT DECISION ON UNEs
The UNE decision of the U.S. Appeals Court, D.C., will be overturned by the Supreme Court, CompTel/Ascent Alliance Pres. Russell Frisby told reporters in a conference call Wed. “We feel good because this decision was so outrageous that we do believe it’s going to end up in the Supreme Court,” he said. He acknowledged, however that “obviously, there is a real danger here… But we are not going to go away today, tomorrow or on the 61st day,” after the stay of the court order is scheduled to be lifted.
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“If [the order] isn’t stayed, we will argue to the states that they should maintain the unbundling requirements and I am optimistic that states… will do so,” said attorney David Carpenter, who argued the case at the D.C. circuit. He said existing interconnection agreements will protect competitors in the interim. “Interconnection agreements have ‘change of law’ provision” and “are not themselves affected by the decision,” Carpenter said. He said if the decision isn’t stayed, “proceedings will occur in states to determine what network elements should be unbundled on an ongoing basis, and because FCC rules [don’t] apply, the states will apply their own understanding of the requirements of the Telecommunications Act and of the state law.”
After interconnection agreements expire, “each state will have the authority to continue the rules if it chooses,” he said: “One of the ironies of this decision is that the basic scheme of the Act is that on matters the FCC doesn’t address through rules, the states have expressive authority to decide the matters. So, if there are no rules in place under the scheme of the Act, each state commission applies the requirements of the Act, as well as the requirements of state law to come up with its own unbundling rules.” He said if there’s no stay imposed after the 60 days set by the court, rules will be vacated and “the states will be free to act based on their own understanding of the requirements of the federal act… and of states law.”
Frisby said there was also “a practical aspect that we have to consider.” He said there were 19.1 million lines served by competitive providers: “There is no way that the FCC or the states or Congress can let these 19 million lines be cut off on the 61st day. That’s just not going to happen from either legal standpoint or practical standpoint.” Frisby said Bells will try to raise rates as soon as the stay is lifted, but said he didn’t believe they would do so because of state law and interconnection agreements. “We are fighting hard to make sure that on the 61st day American public doesn’t get a $15 billion bill from RBOCs,” Frisby said consumers save $9 billion and businesses $6 billion as a result of competition.
Carpenter said the court decision didn’t affect applicability of TELRIC: “Whatever elements are being provided, will have to be provided at TELRIC rates under the current law. This decision doesn’t alter that law at all.” Carpenter said the court ruling also didn’t affect the requirement for states to continue impairment hearings: “The decision doesn’t change anything because the rules are still in affect and will be for 60 days. So, the technical matter that the obligations to conduct the hearings continues. It’s understandable that some states will want to take some time on this and sort things out.”
Carpenter said if the ruling isn’t stayed, “the ruling that currently requires that each state allows competitors to receive access to mass switching won’t be in affect.” Attorney Donald Verrilli said it was “important to understand how extraordinarily unrealistic it is to think that the FCC could accomplish this task within the 60 days that the court set for it… The FCC is being forced by the court not only to make these decisions without the help of the states, but also to make them on a market-by-market basis for every separate product market in 60 days.”
“The FCC has a very clear authority to delegate” some decisions to the states, because “the basic scheme of the statute is that on matters that the FCC chooses not to address or is unable to address for practical reasons, it’s the states’ job to make the determination,” Carpenter said: “The Act gives the states the authority to apply federal law and make… determinations on any matters that the FCC doesn’t address for whatever reason.” Said Frisby: “For over a century courts [recognized] the important role that the state commissions have to play in telecommunications regulation” and the D.C. Circuit “ignored this 100 years of history.” Carpenter said Congress was “very clear on this and the Supreme Court will agree… and will reverse what the D.C. Circuit said.” Verrilli agreed: “The very next provision in the statute after the one the D.C. Circuit relied on in the Telecommunications Act expressly gives state [PUCs] the authority to make any decision or enforce any order… so long as it’s consistent with the federal law… It’s remarkable the D.C. circuit doesn’t even mention this in its analysis.”