CLECs LOOK AT PITFALLS IN UNE ORDER
Although CLECs will benefit from much of the FCC’s recently released Triennial UNE Review order, potential problems remain, CLEC experts said Thurs. in an audioconference sponsored by CCMI consultants. Questions from an audience of CLEC providers indicated there still was confusion about the terms of the order, ranging from line splitting to the use of EELs. CLEC consultant Andrew Regitsky warned that a new TELRIC rulemaking scheduled for release at the FCC’s Sept. 10 agenda meeting could be a negative for CLECs.
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One of the biggest problems is the order’s lack of guidance to states on how to set up market areas they would use to determine if UNEs were needed, Regitsky said. The order requires each state to conduct a 2-step, market-by- market analysis of whether CLECs would be “impaired” without access to UNEs. However, he said the order didn’t define the boundaries of those market areas other than to say they shouldn’t comprise entire states. Although state PUCs are working on their own to set up some common standards, giving so much leeway to them in setting up the boundaries could invite a great deal of variation from state to state, he said. ASCENT Exec. Vp David Gusky said the size and type of market areas selected could have a significant impact on whether the all-important switching element was eliminated and how quickly.
ALTS Gen. Counsel Jonathan Askin said the agency’s decision to free the Bells’ hybrid broadband facilities from unbundling could allow the Bells to claim they were free of unbundling requirements for every copper facility “that displays a millimeter of fiber.” He said that was the biggest problem ALTS would have to address but he was not sure how yet, whether through a reconsideration request, enforcement action or a legal challenge.
One CLEC provider in the audioconference asked whether ILECs could replace UNE-P by replacing their switches with packet-based ones, which the order deregulates. Askin said that was possible but it would depend on the cost to the Bells of replacing the switches versus their concern about the cost of UNE-P competition. Another listener asked when the experts thought UNE-P would start to disappear. “One of the keys will be how the states define the market,” Gusky replied. UNE-P won’t go away “overnight” nor “years and years in the future,” he said. CompTel Pres. Russell Frisby said the FCC’s timetable required the states to transition UNEs out of existence over 3 years. However, a caller said the timetable also required CLECs to move 1/3 of their customers off UNE-P in each of those 3 years.
Another CLEC executive asked whether ILECs could go to the FCC for intervention and perhaps a less competition- friendly response if a PUC were unable to finish its UNE reviews in the 9 months required. “I think ILECs will go to the FCC in every competition-friendly state,” Askin answered. A Focal representative asked why the FCC decided ILECs wouldn’t have to unbundle the entrance facilities of dedicated transport. Regitsky said it appeared to be a way of easing ILEC concerns about special access revenue losses.
Regitsky also warned that the TELRIC changes made in the UNE order couldn’t be viewed by themselves without taking into consideration a proposal the FCC planned to introduce next week to make more changes in the TELRIC formula. The new rulemaking could be “dangerous to CLECs” because it might be aimed at appeasing FCC Chmn. Powell’s concerns that TELRIC prices are too low. Regitsky said the industry was waiting to see how the rulemaking was worded and whether it revealed any preliminary conclusions “which will not be good for CLECs.”