TR Daily FCC Grants USTelecom Pleas for UNE, Resale Forbearance
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Friday, August 2, 2019

FCC Grants USTelecom Pleas for UNE, Resale Forbearance

Over the dissent of Commissioner Jessica Rosenworcel and the partial dissent of Commissioner Geoffrey Starks, the FCC has granted the remaining forbearance requests from the petition filed by USTelecom in May 2018, which dealt with unbundling and resale requirements.

Under the statutory deadline contained in the provision of the 1996 Telecommunications Act that granted the FCC forbearance authority, if the Commission had not acted on the remaining pending aspects of the USTelecom petition by today, they would have been deemed granted. In the wake of today’s order there are no aspects of the forbearance petition remaining facing today’s “deemed-granted” deadline.

Specifically, the WC docket 18-141 memorandum opinion and order, which was adopted July 26 and released today, relieves incumbent local exchange carriers that operate under price cap regulation from requirements to “unbundle two-wire and four-wire analog voice-grade copper loops, including the attached TDM [time-division multiplex] equipment (UNE Analog Loops)” and to “offer for resale at wholesale rates telecommunications services that the incumbent LEC offers at retail to non-carrier customers (Avoided-Cost Resale).”

“Given the sweeping changes in the communications marketplace since the passage of the 1996 Act, including the increasing migration of consumers of all sorts and sizes away from TDM technology, copper loops, and local telephone service toward newer, any-distance voice services over next-generation wireline and wireless networks and the wide range of competitors offering facilities-based voice service alongside over-the-top Voice over Internet Protocol (VoIP) services, we find that the public interest is no longer served by maintaining these legacy regulatory obligations and their associated costs. Rather than a foothold for new entrants into the marketplace, they have become a vice, trapping incumbent LECs into preserving outdated technologies and services at the cost of a slower transition to next-generation networks and services that benefit American consumers and businesses,” the FCC said in today’s order.

It conditioned the forbearance on “an appropriate transition period to facilitate a seamless move to alternative voice service arrangements by end users that rely on legacy TDM voice service provided via UNE Analog Loops or Avoided-Cost Resale in spite of more modern and efficient voice service availability.”

Specifically, it established “a two-part transition. First, we permit competitive LECs to order new UNE Analog Loops for an additional six months after the effective date of this order. This timeframe will enable competitive LECs to continue to execute short-term business plans and honor contractual obligations with new or existing customers, including small businesses, while they determine which alternative voice service option will best serve their customers’ needs. Second, we adopt a three-year grandfathering period for all competitive LEC customers. The three-year transition timeframe within which all UNE Analog Loops (including any new UNE Analog Loops ordered during the first six months) must be transitioned to alternative arrangements will commence on the effective date of this order. This three-year period is consistent with transition timeframes the Commission has previously adopted in light of changes in the regulatory environment, and should provide more than enough time for competitive LECs and their customers to transition to alternative TDM or new IP-based voice service arrangements. We find this period sufficient for competitive LECs to replace their embedded base of legacy TDM customer premises equipment or other increasingly obsolete TDM-based peripheral devices with new IP-capable equipment. Competitive LECs will also need time to make similar logistical arrangements to change out equipment in their collocation spaces to convert from using UNE Analog Loops to alternative arrangements, independent of the type of voice service they decide to offer end users over such loops at the end of the transition. This three-year timeframe also will enable competitive LECs using UNE Analog Loops as part of Enhanced Extended Links (EELs) to transition the loop portion of the EEL in the same timeframe as the unbundled DS1 transport portion from wire centers subject to forbearance,” it said.

The order rejects WorldNet’s request to exclude Puerto Rico from the grant of forbearance, but it sets a longer transition period for Puerto Rico, providing “a five-year, rather than three-year, grandfathering period. We agree with commenters that the state of the economy in Puerto Rico and the ongoing restoration efforts there resulting from the devastating effects of the hurricanes are special circumstances that warrant different treatment from the mainland.”

USTelecom’s 2018 petition sought nationwide forbearance from the unbundling and resale mandates in section 251(c) of the Act and associated obligations in sections 251 and 252; provisions governing the relationships of Bell operating companies and their affiliates in section 271(e)(1); and the mandates for Bell operating companies to provide nondiscriminatory access to poles, ducts, conduits, and rights-of-way in section 271(c)(2)(B)(iii).

As a result of numerous mergers and acquisition over the past 23 years, AT&T, Inc., Verizon Communications, Inc., and CenturyLink, Inc., are the successors to the companies that were subject to the Bell-specific provisions of the 1996 Act.

Earlier this year, the FCC granted the forbearance petition in part. Specifically, it said it would forbear from enforcing the requirement that independent rate-of-return carriers maintain a separate affiliate to provide in-region long-distance service; deadlines for nondiscriminatory provisioning in section 272(e)(1) of the 1934 Communications Act, as amended, and related special access performance metric reporting obligations; and the requirement in section 271(c) of the Act that Bell operating companies (BOCs) provide nondiscriminatory access to poles, ducts, conduits, and rights-of-way, which the FCC said is redundant in light of obligations imposed by section 224 of the Act (TR Daily, April 12).

At the beginning of July, the Wireline Competition Bureau dismissed without prejudice all of the remaining pending requests for forbearance laid out in the May 2018 petition, with the exception of the two provisions contained in today’s order and the business data transport requirements that the FCC voted to eliminate at its July meeting (TR Daily, July 10).

In her dissent, Commissioner Rosenworcel said, “[I]n our haste to make way for the new, I worry we give short shrift to those consumers who depend upon the old. There are still consumers who rely on traditional voice services provided via unbundled copper loops and avoided-cost resale. By ushering these facilities out of the market and erasing their provision under the law, this decision risks cutting off calls and could leave consumers without options at the end of the line. To this end, I am disappointed that this decision did not do more to guarantee a smooth transition for newly-ordered services, especially when it comes to government users that depend on these facilities. I respectfully dissent.”

Commissioner Starks said, “While these loops don’t play the same role in local service competition that they did in the initial years after the Act was implemented, the record reflects that they still play an important role” in the markets for “service to businesses that have nationwide locations where each location needs one or more line-powered voice lines for voice service, credit card processing, and for other purposes” and “the market for service to Federal government entities.”

“Unfortunately, today’s order ignores the value of competition in these markets. … I made requests to change the item that would have left the forbearance findings intact and would have only made changes to the transition periods included in the order. Specifically, I requested that the new ordering period for competitive carriers to acquire copper loops for use in serving nongovernmental customers be extended to 18 months. … I also requested changes to the order to allow companies selected as vendors under the new GSA EIS [Enterprise Infrastructure Solutions] contract to continue to provide competition in the marketplace, as envisioned by GSA. Specifically, the changes I requested would have allowed these companies to acquire new services for the four years remaining until the mandatory transition to the EIS contract takes place in 2023 and would have allowed them to use the copper loop services in question for that time period plus one additional year. Unfortunately, the Chairman’s office did not agree with the reasonable and limited changes that I requested to ensure the presence of competition in the nationwide business and Federal government services marketplace. I am disappointed that we were not able to find a consensus path forward and so I respectfully dissent from the Order, except with respect to Puerto Rico,” he said.

“I am glad to once again have been able to work with the Chairman’s office to negotiate a better path forward for Puerto Rico and concur in that portion of the item. The original draft order did not recognize any differences between Puerto Rico and the rest of the US and applied the same forbearance finding in both places. But, there are real, important, differences. Puerto Rico is still struggling to recover from the devastation wrought by Hurricane Maria in 2017. Much of Puerto Rico’s telecommunications network was destroyed in the storm and people went without communications for months,” Commissioner Starks added.

In a statement, David Bartlett, CenturyLink’s vice president–federal government affairs, said, “We appreciate that with this vote, the FCC recognizes that robust and nationwide facilities-based competition eliminates the need for outdated resale and unbundling obligations that discourage carriers from making network investments. We look forward to working with the FCC on further relief from the remaining antiquated unbundling regulations, which apply only to incumbent carriers and not to their competitors.” —Lynn Stanton, [email protected]

MainStory: FederalNews FCC

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