Bells Move to Block New FCC Rules

Incumbent telecoms wait less than a week in asking court to reverse regs allowing states to determine fate of line sharing.

by Roy Mark of www.internetnews.com [August 29, 2003]

The U.S. Telecom Association (USTA) and three Baby Bells asked an appeals court Thursday to reverse the rules issued last week by the Federal Communications Commission (FCC) allowing states to determine if the incumbent telecoms must continue to share their lines with competitors at below market rates.

According to the new rules, state public utility commissions can require the Bells to continue to lease their copper lines to competitors for at least three more years. The FCC says the rules are necessary to promote local competition while the Bells have long argued the regulations have put them at a competitive disadvantage with cable companies that are not required to share their lines with rivals.

The new regulations were prompted by a D.C. Court of Appeals ruling last year that called for the FCC to revise its network sharing rules. In USTA v. FCC, the Court of Appeals rejected a prior FCC ruling on its controversial line sharing rules for failing to consider the impact of the regulations on the economy and the development of true competition in the local telecommunications market.

Specifically, the court said the FCC was promoting "synthetic competition."

Thursday's appeal, filed by the USTA, SBC Communications, BellSouth, and Qwest, asks the court to once again intervene to compel the FCC to follow the court's earlier mandate and fulfill its "clear, statutory responsibilities."

"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. As a result, we have a 586-page ruling, but no national policy," said Walter B. McCormick, Jr., president and CEO of USTA.

According to the USTA, the most recent FCC rules suffer from many of the "same legal deficiencies" that already have driven the courts to twice reject the Commission's efforts to promote local competition, particularly in the area of unbundling circuit switching for mass market voice service.

"This approach thumbs its nose at the Court, which has consistently told the FCC to do its job and set national policy with clear directions and reasonable limitations on the states," McCormick said. "Instead, the Commission gave states a sweeping 'hall pass' to, essentially, regulate it in whatever way they choose. By abdicating its statutory responsibility, this FCC has sentenced a vital industry, its investments, its services, and its customers to at least three more years of regulatory uncertainty."

The appeal asks the Court to issue a writ of mandamus, which would require the FCC to apply a new standard with 45 days, to block the imposition of the unbundling rules for new customers and retain jurisdiction over the matter to ensure future Commission compliance.

"This ruling really starts to call into question the FCC's ability to be timely, relevant and constructive in today's communications marketplace," McCormick stated. "The order hurts consumers, innovation, and our economy. Before irreversible damage is done, the Court must compel the Commission to meet its statutory responsibilities."

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