FCC Meeting Jan.28.
FCC Readies Actions To Implement Section 706; Parties Seek Delay, Debate Separate Subsidiaries
The FCC's proposal to allow ILECs (incumbent local exchange carriers) to escape some regulation of advanced data services when they are provided through separate subsidiaries will be taken up at the agency's Jan. 28 meeting, despite requests for a delay in action on the advanced services rules.
Meanwhile, ILECs and their competitors continue to haggle over the details of proposed rules to implement section 706 of the Telecommunications Act of 1996 (TR, Aug. 10, 1998). The agency is planning to take two separate steps at this week's meeting:
(1) Issue a report concluding its Common Carrier docket 98-146 inquiry into the deployment of advanced telecom services (TR, Aug. 10, 1998). Section 706 requires it to complete the inquiry it launched last summer within 180 days.
(2) Address a rulemaking notice issued last summer in Common Carrier docket 98-147, proposing ways to spur the deployment of advanced telecom services nationwide by ILECs and their competitors.
That order is expected to expand collocation and network unbundling rules. It also will address the agency's controversial proposal to let ILECs provide advanced data services free of some regulatory requirements if they offer the services through separate affiliates. Such a move would free the subsidiaries from the network-unbundling, interconnection, and service-resale mandates outlined in section 251(c) of the Act.
Lawmakers: Subsidiary Plan Is ‘Premature'
Sen. Ted Stevens (R., Alaska), Sen. Ernest Hollings (D., S.C.), and Rep. Edward J. Markey (D., Mass.) wrote to FCC Chairman William E. Kennard last week criticizing the separate-subsidiary proposal and suggesting that the agency allow the Bells to provide intrastate data services across LATA (local access and transport area) boundaries.
The separate-subsidiary plan “is a remedy in want of an illness,” the lawmakers wrote Jan. 21. “The concept of allowing the ILECs to establish a separate affiliate to provide data services that will not be subject to all of section 251(c) [of the Act] is clearly premature,” they said. Because telecom traffic is increasingly data instead of voice, the separate affiliate “over a very short period of time will become the primary provider of local exchange services for businesses and high-volume residential customers.”
They also said the prospect of allowing Bells to offer interLATA intrastate data services “greatly concerns us.” The FCC's authority to redraw LATA boundaries “extends only to relatively minor alterations. . .[and] does not permit the Commission to substitute its own judgment for that of Congress by permitting the [Bell companies] to carry large volumes of what is today in-region interLATA traffic without first satisfying the market-opening provisions of the Act.” Sources told TR last week that it appeared the agency no longer was considering the LATA- boundary modifications.
AT&T Corp. criticized the suggested LATA-boundary changes in an ex parte letter to Mr. Kennard. AT&T said it would be “unsustainable” to distinguish between data and voice services. And the National Association of Regulatory Utility Commissioners wrote to Lawrence Strickling, chief of the FCC's Common Carrier Bureau, suggesting that the FCC at a minimum should consult with state regulators before granting statewide data relief to the Bells.
GTE Wants Light Regulation
GTE Service Corp. supported several of the recommendations offered earlier this month by the National Telecommunications and Information Administration regarding the regulation of ILECs' provision of advanced data services (TR, Jan. 18). But GTE complained that some of NTIA's proposals were “needlessly regulatory.” The FCC, it said, should adopt the “National Advanced Services Plan” GTE has proposed (TR, Oct. 5, 1998).
GTE took issue with NTIA's suggestions regarding the level of structural separation between the ILEC and its affiliate. NTIA had recommended that the FCC forbear from applying to the data affiliate the network-unbundling and resale mandates laid out in section 251(c), if the ILEC “gives other carriers timely and nondiscriminatory access to all of the network elements that they need to deploy competitive services.” GTE said NTIA “fails to recognize that an affiliate owned by a corporate parent of the ILEC is not an ILEC itself, unless it can be considered a successor or assign of the ILEC.”
GTE also targeted NTIA recommendations that would prohibit sharing corporate logos, brand names, and common nonoperating officers and directors. It disagreed with NTIA's suggestion that any information available to the ILEC's affiliate be provided to competitors on the same terms and conditions.
Meanwhile, at a press briefing in Washington last week, Barbara Dooley, president of the Commercial Internet eXchange Association, criticized the FCC's separate-subsidiary proposal. She said it was “premature” to adopt the proposal because its potential impact was “not yet fully understood.”
Ms. Dooley said she was worried that ILECs would be able to “close off access to necessary facilities” by shifting them to the separate subsidiary. She also was concerned that ILECs and their subsidiaries would gain marketing and pricing advantages, as well as opportunities to discriminate against nonaffiliated ISPs.
Ms. Dooley said she and representatives from independent ISPs had had “mixed” success in talks with FCC officials. “Our impression is that, although they seem to understand and listen to the long distance carriers, CLECs [competitive local exchange carriers], and ILECs, the role of the ISP industry isn't sufficiently understood” at the FCC, she said.
Ms. Dooley said Commissioner Harold Furchtgott-Roth seemed to “understand the concerns of the ISP industry and to take them very seriously.” She said the ISP representatives hadn't been able to arrange meetings with the other Commissioners.
The coalition of ISPs, the Alliance for Public Technology, and the Telecommunications Resellers Association urged the FCC to delay action on new rules.
Writing a letter Jan. 20 to Mr. Strickling, APT agreed with a suggestion made by NARUC a week earlier (TR, Jan. 18)—that federal-state discussions take place before the FCC moves forward with rules on advanced telecom services. APT asked the FCC to create a federal-state joint board to discuss the matter.
APT said it was worried that the separate-subsidiary plan, “as written, may not result in the ubiquitous deployment of high-capacity networks.” It said the FCC's proposal would give ILECs incentives to use unregulated affiliates to offer data services to high-volume customers.
“Other users, by contrast, are not so prized and will likely find themselves relegated to the ‘old' regulated telephone network, which may well deteriorate into obsolescence unless investment enticements exist,” APT said.
The Telecommunications Resellers Association also asked the FCC to delay action. In a letter to Mr. Kennard, TRA President Ernest Kelly III said the public should have an opportunity to comment on the outcome of the FCC's inquiry into the development of advanced data services.
It would be a “serious mistake” to release the results of the inquiry at the same time as its new rules, Mr. Kelly said. “It would appear as if public comment is neither wanted nor necessary in the eyes of the FCC,” he said.
ALTS Wants Extended Links
Meanwhile, the Association for Local Telecommunications Services urged the FCC to require ILECs to make available “enhanced extended links” as unbundled network elements. That would provide CLECs with the functionality of loops, central office aggregating and routing equipment, and interoffice transport.
ALTS said the availability of enhanced extended links would expedite the deployment of competitive services into residential and rural areas because it would allow competitors to serve wide areas while collocating facilities in fewer central offices.
Telecommunications Reports, January 25, 1999
Copyright © 1999, Telecommunications Reports International |
