FCC Must Act by Friday to Stop AT&T Detariffing
Opponents have been lobbying hard at the FCC this week as a deadline neared for agency action on AT&T’s plan to detariff services deregulated in October in an FCC enterprise broadband forbearance order. If by midnight Friday the FCC doesn’t reject AT&T’s tariff withdrawal or suspend it for further investigation, the tariffs will end Jan. 22. Usually, the FCC would have until midnight Jan. 21 to act, but Jan. 21 is a federal holiday, said the battling parties.
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Wholesale customers such as competitive local exchange companies and wireless carriers have asked the FCC stop AT&T from detariffing. They argue that detariffing would violate special access conditions to which the company agreed in the AT&T-BellSouth merger. CompTel and Time Warner Telecom filed a petition saying AT&T is barred from the detariffing it contemplates until the merger conditions expire in 2010. That means the FCC should reject the detariffing or at least suspend it for more study, the petition said. AT&T counters that its merger commitments require it to act in certain ways, such as refraining from raising special access rates, but don’t require retention of tariffs in order to do so.
The dispute centers on contrasting interpretations of the merger conditions -- whether they do or do not require continued tariff filing and whether the October forbearance order permits AT&T to detariff some services mentioned in the conditions. The tariffs in question have implications for how AT&T provides special access services that competitors and other wholesalers buy from AT&T. The conditions don’t expire until 2010.
“Withdrawal of the tariffs would violate the express conditions of the AT&T-BellSouth merger order,” said a CompTel official. CompTel doesn’t buy AT&T’s argument that it doesn’t need a tariff to refrain from rate increases, she said: “Our response is, how would we know if they raised the rate or not without a tariff?” The same goes for commitments involving terms and conditions, she said. And some of the tariffs apply to competitive interconnection, “which was never addressed by the commission in its forbearance order last October,” she said.
Representatives of Time Warner Telecom, Sprint Nextel, Nuvox and the Ad Hoc Telecommunications Users Committee pushed for rejection in a Monday meeting with John Hunter, an aide to FCC Commissioner Robert McDowell, and several Wireline Bureau staff members. The group offered a Time Warner paper arguing against detariffing on a condition-by- condition approach. For example, AT&T promised in condition 2 of the merger agreement not to raise rates for services offered in one of the tariffs AT&T now plans to eliminate, the paper said. “If these services are no longer offered under tariff, the condition no longer applies on its face,” said the paper. Condition 6 requires AT&T to reduce ethernet rates and file “all tariffs necessary to effectuate this condition,” said the paper. “AT&T can’t file ’tariff revisions necessary to effectuate’ this condition if it does not have tariffs on file,” said Time Warner.
Time Warner also said that comments by Commissioner McDowell when the forbearance order was approved indicate he thought tariffs would remain until the merger commitments expired. The paper quoted McDowell as saying that after the merger conditions expire in 2010, “AT&T will be relieved from existing tariffing, price freeze and facilities discontinuance requirements.” An AT&T official disputed the significance of McDowell’s comments on grounds that since he was recused during the deliberations on the AT&T-BellSouth merger he had not been involved directly in the decision.
“Our merger commitments require us not to increase prices,” said an AT&T spokesman. “It doesn’t matter whether the price is in a tariff or contract; as long as the price doesn’t go up, the commitment is satisfied.” Although the broadband forbearance order detariffed these services, the FCC said in the order that AT&T remains a common carrier subject to FCC oversight, he said. “If the FCC meant to defer our detariffing until 2010, don’t you think they would have said so explicitly somewhere in their 40-page order?”
This is the third time competitors have tried to stop the detariffing -- the “third bite of the apple,” said another AT&T representative. He said the issue first was raised in 2006 during the AT&T-BellSouth merger proceeding, when CompTel asked that the FCC require AT&T to withdraw its then-pending broadband forbearance petition. It came up again in the broadband forbearance proceeding itself, when Time Warner objected, saying detariffing the broadband special access services would diminish the merger commitments relating to special access, the AT&T official said. The FCC turned down both requests, he noted.