Members of the ISP-CLEC list discuss the end of competition in the heartland.

[September 27, 2005]

On the ISP-CLEC list in September, FG warned about a new FCC ruling [.pdf]:

"The FCC today granted a Qwest petition to forbear from enforcing its obligations as an ILEC in 9 of the 24 wire centers in the Omaha MSA. This means NO UNEs at all, no raw copper loops, no IOF, no nuttin'. The FCC justifies this on the basis that Cox has invested heavily in its cable plant, thereby providing an intermodal competitor.

This means that any CLEC that has invested money in collocated equipment in that area is hereby Out Of Business. What a flagrant flouting of the Telecom Act! Section 271 obligations to provide loops and transport still remain in effect, but not subject to Section 251 cost-based rates—only "just and reasonable" prices, which are generally interpreted to be any outrageous gouge that an ILEC can whimsically come up with. The FCC has also waived the price caps on its Exchange Access services across the MSA, allowing Qwest to gouge other carriers (especially IXCs)—even though intercarrier compensation is supposedly at the top of the FCC's agenda.

IANAL, but this strikes me as not only a flagrant violation of the Telecom Act, but as a possible Taking under the Fifth Amendment.

I would love to testify against Qwest and the FCC in a judicial review of this one."

[PC guessed] "Perhaps they knew there would not be a fight. In the LERG, I only see Level3, Alltell Comm, TCG, AT&T Local, MCI Metro and KMC. I bet none of them have collocation facilities."

[RB noted] "MFS is collocated in OMAHNENW—118 S 19TH ST."

[DW added] "One CLEC we work with is collocated in all the Omaha offices, they provide mostly data in that market however."

[MK asked] "I recently submitted a thought about this to EFF, wondering why they haven't spoken up about consumer choice/freedom to Internet Access/Phone Service in the local markets. My words fell on deaf ears. Anyone else submitted anything to them?"

MS brought the discussion back to the subject with a quick question:

So no analog 2 wire loops even? Nothing?

[FG replied] "Nothing. No 2-wire analog loops. No IOF transport. No DS1s. Qwest must provide them only on a Section 271 basis, meaning not at cost-based rates, but only at rates that the FCC deems "reasonable", which, given their record in Special Access (which they deem "reasonable"), is pretty outrageous. What does a voice-grade Special Access circuit cost? (That's rhetorical. You don't want to know.)

Absent unbundling, it's not clear that collocation is even allowed, unless it's being used for "interconnection". A data-only CLEC never interconnects with local end offices (or the ILEC PSTN at all), so without UNEs, it may not even have a right of collocation.

While Qwest still has Section 271 obligations, note that Sprint-Local, Verizon-fGTE, and all the other non-Bell ILECs do not, so when this is extended, they don't even need the cover of offering loops at Access rates. Simultaneously, retail rates are deregulated, so Qwest can charge retail ratepayers whatever the hell they want. Essentially Qwest gets to be treated like a CLEC, with no ILEC in town. Yes, there's lots of room for lawsuits here."

[MS wondered] "But will any be filed?"

— End