COMPETITORS RAISE CONCERNS ABOUT REVISITING EQUAL ACCESS RULES
Competitive telecom companies, joined by some consumer advocates and regulators, predicted dire results if FCC modifies or eliminates equal access and nondiscrimination requirements written at AT&T divestiture 20 years ago and continued in Telecom Act’s Sec. 251(g). Telecom Act specified continuation of rules unless supplanted by other regulatory action. FCC asked for comment on whether there should be revision now that there was more competition. Equal access requirements approved by U.S. Dist. Court, D.C., which oversaw divestiture, instituted process of presubscription, still used today, in which customers’ home and business phones automatically connect to long distance companies of their choice. Equal access also assured dialing parity, directory services, network control signaling billing information and other access needs of long distance and information companies. In comments filed late Fri., Bell companies said those requirements, aimed at making sure they didn’t discriminate in favor of former parent AT&T, were outdated. However, long distance companies and CLECs warned that Bells still had monopoly and reason for putting rules in place remained -- companies providing long distance and information services were dependent on Bells for access to customers.
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There’s plenty of reason for retaining rules, AT&T said, “because the fundamental need for the equal access and nondiscrimination requirements [in Sec. 251(g)] remains as strong today -- if not stronger.” It said “neither legal nor marketplace changes have -- or could have -- in any way undermined the basic economic principle that underlies this postulate.” Bells still have “ability to engage in the discrimination that the equal access and nondiscrimination requirements were designed to prevent.” WorldCom said that “by constraining incumbent LECs’ ability to discriminate among long distance providers, the equal access and nondiscrimination requirements ensure that the long distance market remains vigorously competitive.” WorldCom said there was “no merit to the suggestion… that competitive changes in the local market warrant modification of the equal access and nondiscrimination obligations.” Even after Bell company obtains Sec. 271 authority, “it continues to possess overwhelming market power in the provision of access services.”
National Assn. of State Utility Consumer Advocates (NASUCA) said it would be “significantly premature” to relax rules now. NASUCA said FCC was “operating on a false assumption that ILECs, in particular the BOCs, are no longer monopolies.” Local competition “has barely taken root” so consumers often have no alternative but ILECs for connection to interexchange carriers of their choice, NASUCA said. FCC should “do nothing in the near future,” it said. Tex. PUC expressed concern that modifying or removing safeguards in Sec. 251(g) could cause markets to “migrate to a vertically integrated intermodal model, as opposed to the current intramodal model that supports various competitors.” That could happen because “without these requirements, BOCs and other LECs could lack incentive to retain today’s open networks, which allow competing LECs, IXCs and ISPs access to their customers,” Tex. PUC said.
Verizon argued that essential requirements of equal access rules such as interconnection and dialing parity now were included in Telecom Act. “These [divestiture] provisions were not broad ‘nondiscrimination’ prohibitions,” it said, “they were narrowly focused provisions drafted to complement the divestiture requirement of the AT&T decree, and they were designed to make sure that the divested BOCs [Bell operating companies] would not continue to favor AT&T.” Verizon said there was “no justification for retaining different obligations on local exchange carriers based solely upon their origins.” BellSouth said equal access requirements originally were used to offset AT&T’s unfair dialing advantage compared with competitors whose customers had to dial extra digits to be connected. “Enough time has elapsed that there is no longer any rational basis upon which to base a concern that BellSouth, or any BOC, would discriminate against an interexchange carrier in favor of AT&T,” BellSouth said. “Thus, the concerns expressed by the courts and the Commission at the time of divestiture are no longer present and the need for equal access and nondiscrimination mandates has passed.” BellSouth said that if FCC were concerned about Bell company’s discriminating between its interexchange services and those of other companies, “there are provisions of the 1996 Act through which the Commission can prevent such behavior.” For example, BellSouth said it provides out-of-region interexchange services through affiliate as defined by Sec. 272 of Telecom Act that includes nondiscrimination safeguards.
Rural ILECs took up separate campaign, using equal access proceeding to push for equal regulation of their wireless competitors. While rural telcos have to provide equal access, wireless competitors don’t, National Telecom Co-op Assn. said. “As a result, wireless carriers have a distinct competitive advantage” because they can compete without bearing additional cost of providing equal access, group said. Seven rural telcos, filing together, urged FCC “to harmonize the requirements of all similarly situated carriers operating on an intramodal or intermodal basis.” CLECs and wireless carriers “have no equal access and nondiscrimination obligations” so they “are free to discriminate in favor of affiliated interexchange carries or their merger partners,” said carriers, all of them from Okla. or Kan.