SBC’s ‘functionally equivalent’ replacement for unbundled network...

sent ex parte letter to FCC warning that plan would “guarantee the re-monopolization of the residential and small business markets.” Although SBC said it based its $26 per month price on AT&T figures, AT&T sent spreadsheet to FCC to argue that price wasn’t workable. AT&T gave FCC data showing average revenue streams available to CLECs in local residential market in SBC states, “the type of data on which CLECs rely in building business models that support entry decisions.” Data “unequivocally demonstrates that SBC’s proposed transition plan is characterized by a range of negative margin opportunities that would meet no needs except those of a monopolist seeking to eliminate nascent competition.” UBS Warburg said UNE-P wasn’t “an attractive business model in the residential market” based on current rates and SBC plan actually would increase those rates. Research report by UBS Warburg analyst John Hodulik said SBC proposal would increase prices competitors charged by 63%, assuming current average UNE-P rate of $16 per month. He said current average rate often was below ILECs’ cost but proposed rate would become “uneconomical” for competitors. UBS Warburg also questioned whether national rate would be difficult to implement because of wide variance in retail rates on state-by-state basis. Consumer Federation of America Research Dir. Mark Cooper said “it is inconceivable that SBC could think that offering a wholesale rate that is higher than the basic service rate for their own customers could be viewed as a… win.” Cooper said $26 is “is nearly double the [UNE-P] price set in many states” such as N.Y. and Ill.