Rather than bring clarity and direction to the troubled telecom sector, the Federal Communication Commission’s recent local competition ruling promises continued uncertainty and, worse yet, litigation.
Let’s review the two core issues, unbundling and broadband:
The main thing the incumbent local exchange carriers (ILEC) were pushing for was relief from the requirement to offer competitors discounted access to core facilities as so-called unbundled network elements (UNE). But the FCC essentially threw up its hands and abdicated responsibility, pushing the decision into the laps of the states, saying it will be up to them to decide what gets unbundled.
While a victory of sorts for the CLECs that resell ILEC facilities, even they have to wonder where this will go. How can the CLECs plan when it is likely that this nondecision probably will give rise to litigation in 50 states? That is, if it even gets that far. Involving the states seems to ignore the fact that Congress and the courts have told the FCC to answer the bundling question. Some ILECs already are saying they’ll challenge the ruling on that basis.
If that initial push to kill the ruling fails, then the question becomes, what do the states think about unbundling? Some public utility commissions (PUC) are friends of the incumbent telephone companies and likely will do away with UNE elements, while others are either outwardly antagonistic toward the ILECs or believers in the idea that unbundling is good for competition and likely will maintain the status quo.
Either way, given the financial condition of most states and the fact that many PUCs are stretched thin, it is a poor time to leave this complicated mess at their doorsteps. The upshot: continued uncertainty and doubt, just what the industry needed.
On the broadband front, the FCC gave the ILECs what they wanted – relief from the requirement to share new broadband facilities with competitors. The ILECs had argued that the only thing keeping them from investing in new broadband facilities was the fact that they have to share that infrastructure with competitors.
While this ruling was bold and the right move on the part of the FCC, it is unfortunate to see some of the ILECs react apathetically, saying they won’t build out unless they get relief on the other unbundling issue. Trying to leverage the ruling like this exposes the Bell stance for what it is – monopolistic rhetoric. That ultimately undermines the ILECs’ call for regulatory freedom.
