FCC Grants BellSouth Petition but Seeks Comment on Tying
The FCC issued an expected order granting a BellSouth preemption request involving DSL service (CD March 22 p2), but also sought comment on the larger issue of whether the practice of “tying” is harmful to competition. The decision released late Fri. preempts state rules requiring BellSouth to provide DSL service to customers getting voice service from CLECs using UNE loops. BellSouth has a policy of not selling DSL service to end users who buy voice service separately from such competitors. The March 17 vote, one of the last before ex-FCC Chmn. Michael Powell left, covers all state commissions, not just those in BellSouth territory.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Comrs. Copps and Adelstein dissented in part, saying the decision “unwisely flashes the green light for broadband tying arrangements.” They said the BellSouth practice of refusing to offer DSL without voice service is a form of tying, which they defined as an arrangement in which “a seller conditions the availability of one product on the buyer’s purchase of a second product.”
The FCC majority ruled that the BellSouth petition dealt with a limited situation permitted under the FCC’s Triennial Review Order. State laws barring BellSouth’s activities had to be preempted because they conflicted with the federal rules, the FCC said.
The FCC warned that ILECs can’t refuse to port numbers to competitors who win voice customers who subscribe to ILEC DSL service. Comcast Phone and Time Warner had complained that ILECs refused to port the telephone number until the customer cancelled DSL service, the FCC said. “We take this opportunity to remind carriers that the [Telecom] Act requires, and we intend to enforce, non-discriminatory number porting between LECs.”
The agency issued a Notice of Inquiry on “broader questions regarding the tying or bundling of services in general that have been raised in the record of this proceeding.” The FCC will ask about “the competitive consequences when providers bundle their legacy services with new services or ’tie’ such services together such that the services are not available independent from one another to end users.” The agency said it wanted views on how such bundling might affect intramodal and intermodal competition and the upshot for consumers. Asking if competition was a sufficient “incentive” for providers to “disaggregate bundles,” the FCC said it wanted to know if bundling harmed new providers such as VoIP providers. The Commission asked about its authority to impose remedies “and the least invasive regulations that could effectively remedy any potential competitive concerns.”
BellSouth Vp Jonathan Banks said the order helps “clear out regulatory underbrush that handicaps rolling out broadband.” The action basically sets a national, not state, policy that will let Bells roll out broadband service more quickly, he said.