WASHINGTON, D.C. --- In what portends to be extremely controversial processes, the Federal Communications Commission (FCC, www.fcc.gov) today initiated its first "triennial" review of its policies on unbundled network elements (UNEs), as well as a review of the regulatory requirements applicable to ILEC provisioning of high-speed services.
The UNE action is one of several proceedings the FCC has initiated as part of a broad review of its competition policies. Such review is needed, the commission says, because of various developments in the marketplace.
Other related proceedings include the National Performance Measures Notice of Proposed Rulemaking (NPRM) and the Special Access NPRM adopted last month, and the NPRM concerning the regulatory framework of ILEC broadband services that also was adopted today.
During today's public meeting, the FCC said it would specifically examine the framework under which the ILECs must make UNEs available to competitive carriers. The FCC wants to ensure that its regulatory framework reflects recent technological advances and marketplace developments, while remaining faithful to Section 251 of the Telecommunications Act of 1996.
This item, commented FCC Chairman Michael K. Powell, underscores the FCC's ongoing commitment to promote facilities-based competition.
"I believe this commitment should focus, in particular, on both so-called 'full facilities-based' competition and competition from newer entrants who supplement their own facilities with network elements leased from the incumbent," Powell said.
Powell said he fully supports the use of facilities and individual UNEs as ways to promote local competition while also encouraging deregulation and innovation.
Specifically, Powell plans to consider how the Telecom Act's goals of encouraging broadband deployment and investment in competing facilities should shape unbundling policy.
The FCC also is seeking comment here on whether to unbundle aspects of the ILECs' networks, to ask whether and the extent to which the FCC should take note of the availability of technologies other than circuit-switched telephony provided by traditional common carriers.
Powell said that this NPRM also would consider the roles that cable and wireless companies play in the market for telephony and broadband telecommunications services.
Competitive carriers are ready to meet the challenge.
"This FCC [UNE] proceeding gives companies an opportunity to present the real facts about local telecom competition," says Thomas M. Koutsky, vice president of law and public policy for Z-Tel Communications Inc. (www.ztel.com).
The current UNE rules were implemented in 1999. Since then, competitive companies such as Z-Tel have used these network elements to provide local service to millions of residential and small business customers nationwide.
Millions of residential and small business consumers get cost-effective local phone service from companies that lease unbundled local switching and the unbundled network element platform (UNE-P), Koutsky says. "This UNE-Platform is the one true telecom competition success story of the last two years," he added.
Z-Tel plans to prove that a comprehensive unbundling policy allows consumers to immediately gain the benefits of competition while simultaneously promoting full facilities-based competition, Koutsky said.
On the other end, the ILECs will attempt to prove otherwise, and likely will tell the FCC that the UNE-P, switching and transport should not be required UNEs.
Generally, the FCC seeks comment on most aspects of its unbundling framework, including:
1.) Application of the statutory "necessary" and "impair" standards, as well as whether and how the FCC should take into account other goals of the Telecom Act, such as encouraging broadband deployment, investment in facilities and technological innovation.
2.) A more targeted approach to defining specific network elements, such as whether or not the unbundling rules should vary by type of service, geography, or other factors.
3.) The proper role of state commissions in the implementation of unbundling rules.
The NPRM incorporates several ongoing proceedings involving various unbundling obligations, including the next generation network proceeding, the EELs proceeding, and the switching carve-out proceeding.
Commissioner Michael J. Copps said today that he has "some concern for the competition framework laid out by Congress" in the Telecom Act.
"I understand the need to ask questions," Copps said, "but we must be sensitive to the larger context" of the national economy.
This is a time of great uncertainty in the economy, for the telecommunications industry, and for competition for both telecom and Internet services, he said. One solution is stability in the regulatory environment.
"I fear that these broad notices may not be meeting this need," Copps said. "Some parties may read these notices and conclude that the commission has a predetermined agenda to remake the competition framework. Whether accurate or not, this perception, coupled with the uncertainty created by these broad notices, can damage competition as surely as any final rules adopted by this commission."
In another order today, the FCC initiated its review of the regulatory requirements for ILEC broadband telecom services.
In this proceeding, the commission will ask whether potentially robust competition among multiple types of broadband service providers suggests that the federal agency should avoid subjecting incumbents to the same regulatory burdens that it imposes on these carriers with respect to their provision of local telephone service, according to Powell.
"We ask whether ILECs, which are so clearly dominant in the provision of local phone service, must also be treated as dominant as they use DSL and other technologies to provide high-speed telecommunications services in competition with cable modem service providers and other types of platforms," Powell said.
This NPRM is intended to develop another avenue of thinking about how regulation can serve to help or hinder broadband deployment, he said.
Powell said he has "an open mind" as to how these questions should be answered.
