USTelecom Calls Granite Wholesale 'Regulatory Backstop' Claims Imaginary
USTelecom disputed Granite Telecommunications arguments opposing ILEC relief from certain FCC wholesale obligations. USTelecom said Granite believes Communications Act Section 271 Bell duties and ILEC 64 kbps wholesale voice duties give CLECs a "regulatory backstop" to obtain UNE-P (unbundled network…
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element platform) replacement products from the incumbent telcos. “Granite’s imagined ‘regulatory backstop’ is not real and has been expressly disavowed by the FCC. UNE-P replacement products are the result of marketplace conditions that have enabled negotiated commercial agreements,” USTelecom said in a letter posted Wednesday in docket 14-192. "Regulatory obligations did not cause these agreements, and they do not ‘backstop’ them. Any savings claimed by Granite resulted from market conditions, not regulatory ‘backstops.’” Granite recently suggested it would stop serving 1.4 million lines and there would be consumer welfare loss of $4.4 billion to $10.2 billion if CLECs lost wholesale rights targeted by a USTelecom forbearance petition, which is due for a decision Jan. 4 (see 1511120031). USTelecom said the provisions Granite cites require ILECs to offer wholesale access to certain network elements, but don’t require them to offer a wholesale voice platform. “By implying that they do, Granite resurrects and tries to re-litigate issues that were settled years ago in the Commission’s UNE proceedings,” USTelecom said. “There is no requirement that companies assemble the various elements available under the sections and rules Granite cites into a finished wholesale business voice service.” A 2011 FCC amicus brief in a 6th U.S. Circuit Court of Appeals case (BellSouth v. Kentucky PSC, No. 10-5311) confirmed that ILECs aren't required to recreate UNE-P, USTelecom said. A Granite representative had no comment Wednesday. The company did respond to a recent Verizon filing in the docket that argued a 2005 FCC forbearance order -- citing strong cable competition to Qwest (now CenturyLink) in Omaha, Nebraska -- supported the USTelecom petition. Granite said that order didn’t address the kinds of multilocation business customers Granite serves, the “vast majority” of which don’t have cable alternatives. Granite said there is no basis to assume Verizon and other ILECs would lose many customers to cable if CLECs have to pull back due to ILEC wholesale relief. CLECs have no concrete assurances Verizon and other ILECs will continue to offer commercial platform services in the absence of the regulations, Granite said.