FCC sets interim network-sharing rules

The U.S. Federal Communications Commission will require incumbent telephone carriers to continue offering parts of their networks to competitors while the commission rewrites those network-sharing rules.

The U.S. Federal Communications Commission will require incumbent telephone carriers to continue offering parts of their networks to competitors while the commission rewrites those network-sharing rules.

In an order and notice of proposed rule-making released late Friday, the FCC said it will require that until the agency creates new so-called unbundling rules, the incumbent carriers -- often called the regional Bells -- must offer competing carriers their switching, enterprise market loops and dedicated transport under the rates in their interconnection agreements as of June 15. The FCC plans to create new unbundling rules by the end of 2004, according to the order.

The FCC order also solicits comments on a plan that would go into effect if the commission does not approve new rules by the end of 2004. That six-month transition period would allow the prices the Bells charge their competitors for unbundled network elements (UNEs) to rise up to 15% in the absence of new unbundling rules.

"We recognize that while certainty in the short term is critical, industry participants also require a clear understanding of how the regulatory landscape might change after our issuance of final rules," the FCC order says. "... We believe the public interest would be served by a transition in the event that our final rules decline to require unbundled access to any element or elements that were available to requesting carriers as of June 15, 2004."

The FCC also requests comments on what direction it should take with new rules governing the competition between the Bells and competitors such as AT&T and Sprint.

A new set of rules became necessary after the U.S. Court of Appeals for the District of Columbia Circuit overturned much of the so-called triennial review order in March. The triennial review was approved by the FCC in February 2003 and released in final form in August 2003.

The appeals court decision, the third court ruling overturning FCC telecom rules since 1996, was a setback for the competitive local exchange carriers (CLECs) and for state public utilities commissions, which had power under the FCC plan to set some of the network-sharing rules. The regional Bells, which had joined the U.S. Telecom Association (USTA) in the lawsuit, expected to benefit from the court's decision to send the rules back to the FCC. Incumbent carriers had criticized the FCC's decision to leave some rule-making up to the states, arguing that forcing them to comply with 50 separate sets of rules would cause uncertainty in the industry.

CompTel/Ascent, a trade group representing many CLECs, praised the FCC action in a statement and said that the order addressed a "critical need" to keep existing network-sharing arrangements in place. The six-month freeze will provide stability to give carriers time to evaluate their business plans, H. Russell Frisby Jr., CompTel/Ascent CEO is credited as saying in the statement.

A spokesman for Verizon Communications, one of the regional Bells, said the company did not have a comment late Friday. The FCC, however, "must address the issues squarely" after three earlier attempts were overturned by courts, the spokesman said.

Commission Chairman Michael Powell opposed much of the 2003 triennial review order because it preserved what he called a "repudiated mode of competition." He applauded the commission's Friday order.

"I believe a majority of the commission is committed to providing a sound decision that will allow competition to flourish," Powell said in a statement posted on the FCC Web site. "I am confident that we can put in place the fundamentals of sustainable competition and get this right for American consumers."

But Commissioner Michael Copps called the interim rules on unbundling rates bad for U.S. telephone customers. "There is no need to mince words," Copps said in his FCC statement. "(The FCC) is sticking consumers with higher telephone rates and fewer choices. The people who pay America's phone bills deserve better."


Copyright © 2004 IDG Communications, Inc.

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