DOJ won't appeal telecom network-sharing ruling

The U.S. Office of the Solicitor General has decided not to appeal a court ruling overturning much of the FCC rules on network-sharing among telecommunications companies.

Solicitor General Theodore Olson announced Wednesday he will not ask the U.S. Supreme Court for an appeal of a March decision by the U.S. Court of Appeals for the District of Columbia Circuit that threw out much of the FCC's so-called triennial review, a roadmap that tells incumbent telephone carriers what parts of their networks they have to share with competitors at a discount. The FCC finalized the triennial review in August.

Olson's decision means the U.S. Department of Justice will not back an appeal of the case, although the FCC still could move ahead with a Supreme Court appeal. At the direction of FCC Chairman Michael Powell, who opposed part of the triennial review decision, the FCC staff has been working on new network-sharing rules since shortly after the appeals court decision.

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The U.S. Office of the Solicitor General has decided not to appeal a court ruling overturning much of the FCC rules on network-sharing among telecommunications companies.

Solicitor General Theodore Olson announced Wednesday he will not ask the U.S. Supreme Court for an appeal of a March decision by the U.S. Court of Appeals for the District of Columbia Circuit that threw out much of the FCC's so-called triennial review, a roadmap that tells incumbent telephone carriers what parts of their networks they have to share with competitors at a discount. The FCC finalized the triennial review in August.

Olson's decision means the U.S. Department of Justice will not back an appeal of the case, although the FCC still could move ahead with a Supreme Court appeal. At the direction of FCC Chairman Michael Powell, who opposed part of the triennial review decision, the FCC staff has been working on new network-sharing rules since shortly after the appeals court decision.

The appeals court decision, which overturned the FCC's decision on sharing switching facilities and some high-capacity DS-1 and DS-3 network loops, has forced competitive local exchange carriers (CLEC) to enter into private negotiations with the incumbent carriers for those pieces of their networks, but few agreements have been signed since the ruling.

Competitors of the four large incumbent carriers said Olson's decision could result in higher telephone service prices. "If the FCC's rules are allowed to lapse and wholesale rates rise, MCI may be forced to raise prices in some markets and pull out of others," Stasia Kelly, executive vice president and general counsel of MCI, said in a statement. "The (Bush) administration's decision will clearly disrupt the marketplace. Without competition, consumers will soon find themselves with higher rates, lower quality of service and less innovation."

The incumbent owners of much of the nation's telephone networks, often called the regional Bells, were the winners in the appeals court case, and they cheered the solicitor general's decision. "The Solicitor General's decision is a major victory for consumers and the nation's economy," James D. Ellis, general counsel of SBC Communications, said in a statement. "Allowing these unlawful rules to lapse will ensure a bright new era of stability in the highly competitive telecommunications industry that will benefit American consumers."

SBC has committed to not unilaterally raising the cost for its network elements, often called unbundled network elements, or UNE, according to Ellis. In his statement, he praised the decision of the solicitor general to not move forward in what has been a series of court cases on the UNE rules since the Telecommunications Act of 1996 was passed. The regional Bells, which inherited much of their networks after the breakup of the old AT&T monopoly in the early 1980s, argue that they have little incentive to invest in new equipment when they have to share parts of their networks with competitors.

The IDG News Service is a Network World affiliate.