Massachusetts Attorney General Tom Reilly and the Association of Communications Enterprises (ASCENT), which lobbies on behalf of competitive carriers and resellers, separately have appealed the FCC's decision granting Verizon Communications Inc. long-distance entry in Massachusetts.
Both the AG and ASCENT (www.ascent.org) have asked the U.S. Court of Appeals for the D.C. Circuit (http://www.cadc.uscourts.gov/) to review the FCC's (www.fcc.gov) approval.
AG Reilly says in his appeal that Verizon's current wholesale prices, specifically those for unbundled network elements (UNEs), still haven't been investigated, are not based on state-specific costs, and are likely to discourage local competition for residential customers.
Specifically, AG Reilly challenges the FCC's determination that Verizon has fully implemented the 14-point competitive checklist of the Telecom Act; contests the FCC's finding that Verizon's entry, with the current UNE pricing structure, is in the public interest; and asks the court to hold unlawful, vacate, enjoin and set aside the FCC's order.
In voting to approve Verizon's supplemental application on April 16, three of the four FCC commissioners said they had personal concerns in the FCC's order about Verizon's UNE prices.
Chairman Michael K. Powell and Commissioner Susan Ness, for example, said that they were "constrained" or "compelled" to approve the application despite their concerns. Commissioner Gloria Tristani voted to reject the application because the UNE prices for switching were outdated.
Ness also urged the FCC to revoke its approval if the New York State Public Service Commission (http://www.dps.state.ny.us) lowered its UNE switching rates, upon which Verizon relied in the Massachusetts application.
"The fact that three [FCC] commissioners expressed serious concerns about the [UNE] switching rates that Verizon would charge to local competitors is a clear indication that the FCC should have denied this application," AG Reilly said in a statement.
AG Reilly said sustainable competition in the state's local residential market might not thrive if Verizon's UNE switching rates remain in place.
In December 2000, Verizon withdrew its first Massachusetts application and former FCC Chairman William E. Kennard recommended that Verizon address issues regarding its wholesale rates. Verizon later refiled, but the renewed application contained the same wholesale rates as the original.
The Massachusetts Department of Telecommunications and Energy (http://www.state.ma.us/dpu) has opened its own investigation into creating new rates for Verizon's wholesale services. However, that investigation isn't expected to produce new permanent UNE rates until next winter at the earliest, Reilly says.
Meanwhile, in a one-page filing with the circuit court, ASCENT General Counsel Charles C. Hunter says that the FCC "acted arbitrarily and capriciously, and abused its discretion and violated the Communications Act, in granting Verizon's application to provide in-region, interLATA service in Massachusetts."
ASCENT says in its filing that Verizon was granted Section 271 approval before the carrier successfully satisfied the Telecom Act's 14-point competitive checklist, which is contained in Sec. 271.
ASCENT asked the court to hold that the FCC's order is unlawful and to set it aside.
Verizon claims that the appeals are "without merit."
