FCC DSL Order Requires Big Choice of Small Telcos
Rural telecom firms face a significant choice as a result of FCC deregulation of wireline Internet access (CD Aug 8 p1), panelists said on a USTelecom Webinar conference Tues. The order lets rural telecoms decide if their DSL service is to be treated as a regulated common carrier service or as a generally unregulated private carriage offering -- and that’s a major decision that can’t be made “off the top of the head,” said Carol Mattey, formerly at the FCC Wireline Bureau and now a Deloitte & Touche dir.
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The FCC order reduced regulation of wireline broadband service but gave rural carriers the option to continue to have their DSL treated as a common carrier service so they can stay in NECA tariffing pools. That’s not as easy a choice as some might think, with pluses and minuses to both options, said Mattey and other panel members. Common carrier treatment may permit continued NECA pooling, as sought by rural carriers, but also requires carriers to continue to contribute some DSL revenue to the Universal Service Fund (USF). Private carriage eliminates the NECA pooling option, but also eliminates the USF contribution requirement for DSL, they said. If rural carriers choose common carriage, they will offer DSL as a tariff. Private carriage would call for individually-negotiated offerings.
Common carriage regulation gives carriers the legal protection of the Filed Rate Doctrine when their rates are challenged, said communications attorney Greg Vogt. The doctrine bars court decisions that would alter a carrier’s tariffs, Vogt said. It also offers the “administrative ease” of continued NECA pooling, said NECA Exec. Dir. Rick Askoff. Plus, said Vogt, the NECA pool “tends to level out price among classes of carriers,” meaning it can lower a carrier’s rate that might be much higher on an individual basis. Askoff said NECA and associations representing smaller telcos, including USTelecom, urged participation in pooling be preserved, “so we are pleased” with the outcome.
In response to a listener’s question, panelists said carriers don’t have to exit the NECA pool entirely if they opt for DSL private carriage. They just can’t participate for “that [DSL] product,” said Mattey. Carriers needn’t decide immediately, panelists said. The trigger will be the 270-day transition period for changes to USF contributions rules.
The Commission offered rural carriers options for treatment of their transmission services to give them “maximum flexibility to advance their goals,” said FCC Wireline Bureau Chief Tom Navin. The broadband order in general sought to give telephone firms better footing to compete in the Internet access market against cable and others, Navin said. “It’s likely incumbent telephone companies will seize the opportunity and increase rollout of broadband services to consumers,” he said. Navin said the order reflects FCC Chmn. Martin’s view that regulations should recognize “the competitive significance of cable in the broadband market.”
Navin said the FCC issued a further notice of proposed rulemaking (NPRM) as part of the DSL order to consider whether to keep consumer protection rules when carriers come under less regulation. The Commission is concerned that “as you move away from economic regulation, consumers still may need some protection under Title One” of the Communications Act, he said. Those protections weren’t added to the order because the agency felt there wasn’t a “sufficient record” upon which to apply them, he said. “The fact that the Commission put out an NPRM rather than pronouncements indicates it has an open mind” about the issue, Navin said. The NPRM asks about continued application of customer privacy, slamming, truth-in-billing, outage reporting and other requirements.