Telcos ask FCC to kill broadband competition

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Wireline telephone companies, big and small, don’t want to be forced to share their lines with competitors. So last month, their lobbying front in Washington, D.C. – USTelecom – asked the Federal Communications Commission to scrap rules that require them to sell wholesale lines and other services to smaller companies that don’t own infrastructure.

These competitive local exchange carriers (CLECs) resell those services to retail customers, usually after adding their own equipment or other resources to the mix. You might not think of them as competing telephone companies, though. These days, they lease copper lines to provide Internet service, most commonly via some flavor of DSL, but also using other, more advanced technologies. Competitive, independent Internet service providers would be a better label.

USTelecom is using a fast track procedure called a petition for forbearance. If the petition is “complete as filed” – in other words, includes all the supporting data behind the request – then the FCC has 15 months to accept or reject it. If the clock runs out, it’s automatically granted. So the FCC tends to set short deadlines for public comments. In this case, the FCC allowed about a month for opponents and supporters to weigh in, and another two weeks for rebuttals.

That’s an awful short time for such a major decision. If the FCC goes along with the incumbent telcos’ request, it will put a lot of CLECs out of business, and dramatically change the competitive landscape, such as it is, for broadband service.

There’s another problem: the rules requiring telcos to lease out DSL and other broadband-ready lines on a wholesale basis are really telephone rules, designed to create a competitive market of sorts for POTS – plain, old telephone service. USTelecom is correctly claiming that fewer and fewer people are using POTS, preferring (or at least accepting) mobile phones and VoIP (voice over Internet protocol) service delivered via unregulated landlines as a substitute. If it so chooses, the FCC can kill an entire sector of the broadband market by simply accepting USTelecom’s argument that legacy POTS doesn’t matter anymore.

Comments on USTelecom’s petition are due next Thursday, and rebuttals two weeks after that. The California Public Utilities Commission will file comments – California law requires it – but it’s requesting a three month extension to gather information from telcos. As a memo adopted by the commission yesterday puts it, “contrary to what USTelecom argues, the effect might be to freeze the smaller…CLECs out of a number of markets”.

Other groups are similarly asking for more time, and challenging the completeness of USTelecom’s filing – it’s long on rhetoric and simple graphs, but lacks the kind of detailed data one might wish the FCC to examine.

Assuming, of course, that the FCC hasn’t already made up its mind.