FCC Might Apply New Standards to Qwest Petition

The forbearance controversy is resurfacing, after a year of muted activity during which the FCC worked on the National Broadband Plan. By June 22, the FCC must vote, again, on a Qwest Communications International Inc. (Q) request for forbearance in Phoenix. But there’s a twist this time. FCC Chairman Julius Genachowski has acted on CLECs’ pleas that the commission consider using a new standard when judging forbearance petitions. The outcome of this case could help determine the future of competition in metro telecom markets across the U.S.

In 2008, the FCC shot down Qwest’s first application for regulatory relief in Phoenix – as well as Denver, Minneapolis/St. Paul and Seattle. Qwest then re-filed the document, although just for Phoenix. The provider wants to be exempt from loop and transport unbundling obligations, dominant-carrier tariffs and price-cap regulations, as well as requirements concerning open network architecture and processes for acquiring lines and discontinuing service.

The adjustments are similar to those Qwest landed in Omaha, Neb. in 2005. That’s also the case that sparked a notorious frenzy of “me-too” filings once other ILECs realized they could try to dodge some of the competitive aspects of the 1996 Telecom Act.

Since then, the forbearance process has been messy and contentious. The Kevin Martin-led FCC approved several such entreaties and, in March 2006, went so far as to allow a Verizon Communications Inc. (VZ) petition to gain automatic approval because Martin couldn’t get a majority vote. Indeed, if commissioners don’t act on the Qwest proceeding by June 22, the carrier’s application, too, will be “deemed granted.”

FCC Chairman Julius Genachowski may consider new standards for forbearance requests.

Genachowski seems less inclined than his predecessor to let that happen, especially with a Democratic majority on hand. He also seems more open to fine-tuning the forbearance process for fairness. For example, just before Genachowski took his seat at the FCC, Interim Chairman Michael Copps published an order that ended so-called “gamesmanship.” Genachowski let stand the changes, which include barring telcos from asking for forbearance and then revising the details along the way, to prevent competitors from responding.