FCC to review in mid-February telco competition rules

The Federal Communications Commission (FCC) is scheduled to meet in mid-February to discuss a plan to rework the rules of competition between the regional Bells and other telephone companies.

WASHINGTON – The Federal Communications Commission (FCC) is scheduled to meet in mid-February to discuss a plan to rework the rules of competition between the regional Bells and other telephone companies.

The commission has scheduled a meeting for Feb. 13, according to an FCC official, and its Wireline Competition Bureau plans to deliver a final proposal to commissioners before that meeting.

The proposal is part of the FCC’s so-called triennial review, when the agency looks at the rules governing the regional Bell operating companies (RBOC), and their unbundled network elements (UNE) under the Telecommunications Act of 1996. The FCC decides what UNEs the RBOCs, including Verizon Communications and SBC Communications, must make available to competitors at wholesale prices.

On Monday, the Wall Street Journal reported that FCC staffers, directed by Chairman Michael Powell, have delivered a 400-page draft of the Wireline Competition Bureau report to other commissioners, recommending that the FCC gradually phase out discounts that the RBOCs must give other phone carriers.

The staff document would also exempt the Baby Bells from having to share new fiber-optic lines with other broadband Internet companies, according to the Wall Street Journal report. Right now, the RBOCs must share DSL lines with competitors.

An FCC spokesman declined to confirm the Journal report, saying it’s FCC policy to not comment on pending proceedings. But Powell, testifying before the Senate Commerce, Science and Transportation Committee earlier this month, promised that the rules changes will continue to allow competition for local phone service.

The RBOCs have argued that they are losing money by providing the CLECs access to their networks at rates discounted by up to 60%, and that without changes to the UNE rules they are less likely to upgrade or expand their services. But the CLECs and some consumer groups say more lax UNE rules would reduce competition and drive up phone service prices.

In May 2002, the U.S. Court of Appeals for the District of Columbia sided mainly with the RBOCs and struck down the UNE system, and gave the FCC until Feb. 20 to change the rules before they are overturned. The court ruled that the FCC failed to accurately negotiate the telecommunications industry’s competitive landscape when requiring the RBOCs to offer discounted network elements to the CLECs.