Carriers Deride 20-Year-Old Equal Access Rules

Equal access rules were written to keep Bells from favoring former parent AT&T after the monopoly phone company’s 1984 breakup. Later extended to non-Bell ILECs, the rules require service representatives to ask customers if they know they have a choice of long distance companies, then read a list.

ILECs told the FCC the script-reading requirement is so antiquated the query often confuses customers, who no longer think of local and long distance as separate. The world has changed and most people buy bundled services from providers that include wireline, wireless and others, they say. The Telecom Act superseded much of the AT&T breakup’s modified final judgment, but equal access remained, said USTelecom Gen. Counsel Jonathan Banks. “It’s silly” and costly, especially to rural telcos, for sales reps to read lists of long distance companies to customers, Banks said.

The rules impose other requirements on ILECs, such as separately tariffing each of the exchange access services they offer other carriers and making sure the access is “equal in type, quality and price.” The rules demand dialing parity, which barred ILECs from requiring customers to dial extra digits to reach competitive intraLATA toll providers. But the script reading rule elicits the most derision from ILECs.

“Small rural carriers waste time and resources regularly printing and posting new randomized lists of long distance providers… for their customer representatives to read to customers,” USTelecom told the FCC in comments. USTelecom said the FCC should act soon by issuing an order in the biennial review process or by initiating its own forbearance proceeding. The agency at least should quickly turn the NOI into a notice of proposed rulemaking that says the “notification” process is out, USTelecom said in comments.

When the FCC opened the NOI 5 years ago, AT&T told the agency the requirements “no longer served a valid regulatory purpose” and “what was true then is all the more true today,” the company said: “It is beyond belief that in today’s market, where customers are choosing not just between long distance carriers but between a myriad of providers operating over a variety of platforms, that customers don’t know that they have a choice of long distance providers.”

Some people don’t buy bundles and ought to be told their long distance choices, said the N.J. Rate Counsel: “Consumers who make few toll and long distance calls still require the ability to select the… long distance carriers that offer them the best value.” Competitive concerns remain, the office said: “The acquisition of the two largest long distance service providers, AT&T and MCI, by the two largest Bell Operating Companies, coupled with the consolidations of BOCs are compelling reasons alone to continue the current regime.”

Maybe ILECs aren’t monopolies anymore, but they're still dominant carriers, said the National Assn. of State Utility Consumer Advocates (NASUCA). The Bells may not favor AT&T for long distance, but they have an incentive to favor their own affiliates, NASUCA said: “Today, the issue is not the same as when the equal access requirements were codified in [the Telecom Act] but the need is just as great.”

Long-time opponents ILEC Alaska Communications Systems, and CLEC and long distance provider General Communications Inc., not surprisingly had contrasting views. ACS said competition ends the need for equal access obligations, while bundling makes them “counter productive.” Reading a script to customers wastes time and the rules are “redundant” thanks to other regulatory safeguards, ACS said. GCI said even where there is local competition, “consumers benefit from being fully informed of all available… choices… In areas where there is a monopoly on the mass market provision of local exchange service, such as… Alaskan rural study areas and non-competitive villages, competition in the interexchange market remains vulnerable to discrimination by ILECs.”

Time Warner Cable doesn’t think its phone services are subject to equal access requirements but it supports their elimination because regulation should be scaled back whenever there’s competition, it said. Equal access requirements are outdated, Time Warner said. “The growth of facilities-based telephone competition, at least in the mass market, has eliminated the need for equal access mandates.” Even since the NOI appeared in 2002, the market has changed greatly, the company said: “First, the widespread availability of facilities-based bundled offerings from cable operators and wireless carriers ensures that consumers have a choice of service plans that include unlimited long distance. Indeed, bundled service plans have been so successful that stand- alone long distance, offered without a companion local service, may soon cease to exist… as free-standing entities, MCI and AT&T relied on equal access requirements to be assured of an opportunity to compete for long distance revenue. Now that they have become vertically integrated [through mergers with Bells] that question of access is moot.”

Other “nondiscrimination” rules are unneeded because they appear in other FCC regulations and Telecom Act provisions, carriers said. “The majority of these requirements are redundant with other statutory provisions or Commission rules and others simply serve no purpose in today’s competitive environment,” said AT&T. They “no longer serve a useful purpose, are counterproductive and should be eliminated,” said Verizon.

Not so, said NASUCA: Eliminating these safeguards would “harm local competition, because local competitors would not be able to access long distance competitors to supply key parts of the local/long distance bundles.”