Study Says BOC-Proposed Rules Would Harm U.S. Businesses

Updated: A study, funded by CompTel/ASCENT and released yesterday, says that FCC rule changes could cost the nation billions of dollars and hundreds of thousands of jobs.

by ISP-Planet Staff [November 11, 2004]

Washington, D.C.-based CompTel/ASCENT issued an urgent warning to regulators to support filings by the CLEC and independent ISP community in the regulatory fracas leading up to the final rule clarifications concerning the Triennial Review Order issued on February 20, 2003.

Jonathan Lee, senior vice president of regulatory affairs for CompTel/ASCENT, said that the final clarifications could be issued in the FCC open meeting scheduled for December 15, 2004.

With that in mind, CompTel/ASCENT published yesterday a study it funded by William Lehr, MIT professor, and Mark Bryant, economic consultant, studying a key RBOC proposal.

"The Bells argue that the FCC should eliminate TELRIC pricing on DS-1 and DS-3 elements because competitors can buy special access," explained Lee. "We show that special access costs more."

The study concludes that switching from current normal prices to special access prices would cost U.S. businesses $130 billion and 426,000 jobs over the next ten years, using a Commerce Department Bureau of Economic Analysis estimate that every additional $1 million in telecom activity creates 17.5 new jobs.

The study notes that permitting CLECs to use ILEC facilties makes sense. It says line sharing allows CLECs to build outward from a dense core "rather than dissipating their initial investments on 'edge' facilities that will be underused (at least in the near term) and represent uneconomic duplication of in-place ILEC facilities."

The study, Eliminating Access to High Capacity UNE Loops and Transport Will Cost U.S. Businesses $130 Billion, is available in .pdf format.

Meanwhile, on the ISP-CLEC list yesterday, one member found the exact RBOC filing in question. The FCC's Wireline Competition Bureau extended for 90 days an SBC petition for "forebearance."

One list member warned, "This Petition is incredibly important to the ISP industry! It essentially asks for the power to "disintermediate" (my word, but think about banks) Internet access, putting the entire ISP sector out of business! You'll get Internet service from the owner of the wire, period; ISPs won't have access to telco wires (above dial-up speed, and that might become toll under separate proceedings that the ILECs are working on) once this goes through."

The bottom line, all agreed, was this: "Make some appointments and talk to the FCC. Write intelligent comments. Have your voice heard."

Update: The list member quoted above writes to us:

The note I was referring to cited a 90-day extension of one forebearance petition, as well as the filing of another one. The former, an SBC petition, calls for the FCC to forebear from enforcing Section 271 of the Telecom act. That's bad. The second one, which is not the subject of an extension (it was just filed), is BellSouth's request to abolish Computer II and Common Carriage. That's the one that would put lots of ISPs out of business right away. Both are on the FCC's WCB web page, right next to one another. Bad and Worse.

— End