The regional Bell operating companies have filed a lawsuit against the Federal Communications Commission, claiming its regulatory order governing phone and broadband rules ignored the law and a federal court’s instructions.
The United States Telecom Association and three Bell operators have asked the D.C. Circuit Court of Appeals to require the FCC to apply a new national standard in determining what pieces of the network the Bells do not have to make available to competitors at highly discounted rates.
USTA also asked the federal court to block phone companies, such as AT&T Corp. and MCI, from offering local phone service to new residential and small business customers through the so-called unbundled network element – platform (UNE-P).
The Bells long have said these UNE-P rules require them to lease their local phone networks to competitors at below cost. They have maintained that the FCC – not state regulators – is responsible for changing the rules and creating a national standard.
However, the FCC has directed state public utility regulators to decide whether to preserve wholesale phone regulations or remove them over time. Last week the FCC released the nearly 600-page order, which listed criteria state regulators must factor into their decisions.
“Instead of providing the leadership the country needs and the courts have repeatedly demanded the FCC opted to punt critical decisions out to the states, triggering 50 different regulatory proceedings and 50 different sets of rules,” says Walter McCormick, president and CEO of USTA. “As a result, we have a 586-page ruling, but no national policy.”
BellSouth Corp., SBC Communications Inc. and Qwest Communications International Inc. filed the suit along with USTA. Verizon Communications Inc., the No. 1 local phone company, will file a separate lawsuit that will be consistent with USTA, according to spokesman Larry Plumb, who declined to reveal a timeline or in which appeals court Verizon will file.
Widespread litigation is expected in the wake of last week’s regulatory order, but some observers say most companies challenge rules in federal court after they are published in the Federal Register. That has yet to happen.
H. Russell Frisby Jr., president of the Competitive Telecommunications Association, a group representing Bell competitors, said, “We are disappointed because USTA is wrong on both the law and the facts.”
