Rural Telcos Fret About Deregulating Internet Backbone Providers
Deregulating the Bells broadband transmission services would hurt rural telephone companies that rely on them for Internet backbone service, the National Telecom Co-op Assn., told the FCC in comments filed Thurs. The Bells are the only Internet backbone providers available to rural telephone companies in many areas, NTCA said: “NTCA is concerned for its members who will rely on BellSouth and Qwest for access to the IP backbone.”
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The FCC asked for comments on requests by AT&T, BellSouth, Qwest and Embarq for forbearance from the application of common carrier regulations to their wholesale and enterprise broadband services. The requests seek treatment similar to what Verizon received when the FCC allowed the company’s forbearance petition to take effect in March. Embarq is the wireline company spun off in the Sprint-Nextel merger.
“If the Commission forebears from applying Title II regulation to these services, BellSouth and Qwest may have absolute Internet backbone market power in some remote rural ILEC service areas,” NTCA said: “BellSouth could dictate the future prices, terms and conditions in contracts with small communications providers regarding access to the IP backbone.” It’s true that many rural ILECs connect to the Internet over Time Division Multiplex (TDM) circuits and the Bells have said they're seeking deregulation of non-TDM service only, NTCA said. But “anyone that has been tracking the industry knows that TDM services will eventually be obsolete” and rural companies will migrate to the deregulated services, the association said.
OPASTCO said “rural ILECs need access to the Internet backbone at reasonable and nondiscriminatory rates and terms in order to provide their customers with high-quality, affordable advanced services.” In addition, OPASTCO said, if the FCC grants any of the petitions it should “make clear that these carriers are not relieved from their USF contribution obligations for these services.” In fact, OPASTCO said, the FCC ought to write a “clarifying order” explaining that Verizon isn’t relieved of its Universal Service Fund obligations, either.
OPASTCO told the FCC it wasn’t clear which Verizon services were deregulated. Now that other Bells and Embarq are seeking similar treatment, the FCC should clarify the Verizon situation, it said. “There is substantial uncertainty throughout the industry as to the scope and effect of the regulatory forbearance which Verizon was granted,” OPASTCO said. OPASTCO and others said the uncertainty stems from the fact that no order was issued when Verizon gained forbearance. Verizon’s request automatically took effect when the FCC missed its deadline for acting on forbearance petitions.
Opponents also tried to stop the FCC from viewing the new petitions as “me-too” requests based on the Verizon grant. Several argued that the Verizon action didn’t set a precedent because there was no order. “The deemed granted status of Verizon’s petition does not bind the Commission to grant the forbearance relief that any of the ILEC petitioners seek,” said a group of competitive LECs in a joint filing. “Since the Commission neither has granted nor denied Verizon’s petition on the merits, the Verizon petition is of no precedential value in this proceeding,” said Broadview Networks, Covad, CTC Communications, Eschelon, Nuvox, XO Communications and Xspedius.
“The grant of Verizon’s petition does not provide a basis for approving the petitioners’ requests,” said Time Warner Telecom, CBeyond and One Communications in another joint filing. The Time Warner filing disputed an AT&T argument that the U.S. Appeals Court, D.C. has said an FCC news release could stand in for an order in reflecting the FCC’s opinion. The FCC order in this case “offers little clues as to why the Commission may have thought it was justified in granting Verizon’s petition,” said Time Warner.
“The Verizon forbearance has no precedential value because there was no written decision or agency vote,” said another group of competitors that included Alpheus, DeltaCom, Integra, McLeodUSA, Mpower, Norlight, Pac-West, TDS Metrocom and Telepacific. Like the others, the CLECs also argued that deregulation wasn’t appropriate because the Bells “retain market power in the provision of enterprise retail and wholesale broadband services.” The group said “in the vast majority of circumstances enterprise retail customers have no alternative to [Bell] broadband services and… CLECs have no alternative to [Bell] wholesale broadband offerings to reach their customers.”
EarthLink accused the telecom companies of trying to “short circuit the FCC’s rulemaking process.” When the FCC deregulated DSL last year it said it would address other broadband transmission issues at a later date, EarthLink said. “Apparently unsatisfied” with the FCC’s plan, the telephone companies have filed these petitions that “are insufficiently comprehensive, threaten to undermine the FCC’s ability to control its own agenda, and are becoming a drain on industry and FCC resources,” EarthLink said.