Verizon Communications Inc. (VZ) this week withdrew two contentious forbearance petitions that mirrored others already rejected by the FCC.
Commissioners were slated to vote on the requests for regulatory relief in Rhode Island and Virginia Beach no later than Friday. However, Verizon decided to pull the filings because of holdups at a federal appeals court. Judges have not yet ruled whether the FCC was correct in rejecting Verizon’s 2007 pleas for forbearance in six metro markets including Rhode Island and Virginia Beach. After that denial, Verizon refiled documents targeting just Rhode Island and Virginia Beach.
“The court’s decision in that [2007] case will provide important guidance both for the parties and for the commission on the legal standard that applies to the current petitions,” Dee May, vice president of federal regulatory affairs for Verizon, told the FCC in a May 12 letter that didn’t post on the agency’s site until May 13.
Verizon also noted the FCC likely was prepared to deny the Rhode Island and Virginia Beach requests. Thus, rather than muddying the legal waters, the provider withdrew the petitions.
Setting Standards
Congress included forbearance in the 1996 Telecom Act; called Section 10, forbearance is meant to be used sparingly as a channel for relief when competition in a given market becomes extreme. The Bells have employed the clause enough, and to such great effect, that CLECs often lose market share to their larger, deeper-pocketed rivals, and sometimes even have to shut down. Take, for example, McLeodUSA’s abandonment of the Omaha, Neb., region after Qwest Communications International Inc. (Q) secured unprecedented relief there in 2005.
So when Verizon pulled its requests on May 12, CLECs and their associations were pleased. But they also were spurred to once again ask the FCC to overhaul the forbearance process.
They – along with the Bells, in fact – want the government to detail specific criteria by which forbearance should operate. For competitive carriers and organizations such as COMPTEL, this would include no longer allowing last-minute data drops. The Bells tend to file critical documentation in forbearance proceedings at the eleventh hour, leaving no one time to review and comment on it.
Verizon’s May agrees the government should lay out forbearance guidelines for the entire industry. “...the standard that governs these applications remains unsettled,” and needs to be clarified, either by the FCC or the courts, May wrote in the Verizon letter.
Yet, for CLECs and COMPTEL, rules should go beyond setting standards – when a company such as Verizon withdraws its papers at the last possible moment, they say, work spent opposing it becomes for naught, and that hurts everyone.
“Fighting these forbearance petitions requires a tremendous amount of time and resources,” said Jerry James, CEO of COMPTEL. “The public interest would be far better served if these resources are used to further efforts to expand the availability and affordability of advanced communications services to consumers.”
XO Communications (XOHO.OB), one of the CLECs most vocal about competition parity, concurred.
“For the last 15 months, the FCC and the entire competitive industry have allocated significant resources toward this issue,” said Heather Gold, senior vice president of external affairs at XO. “It is important that such egregious misuse of government and industry resources be avoided in the future.”
