CLECs, Sprint Regroup against Verizon Forbearance ‘Reprise’ in Virginia Beach
Competitive carriers and their investors arrayed in droves against a Verizon forbearance petition seeking relief from loop and transport unbundling requirements in parts of Virginia Beach, where Cox is the incumbent cable operator. Comments on the request were due Tuesday. Sprint Nextel, a longtime special access reform advocate, also joined the fray. The opposition wasn’t unexpected: CLECs and Sprint also are fighting a Verizon forbearance petition seeking similar relief in Rhode Island.
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CLECs and Sprint derided the petition as a “repackaging” of a Verizon petition the FCC denied in December. In that petition, Verizon sought relief in Virginia Beach, Providence and four other East Coast markets. CLECs dispute a similar pending Verizon petition in Rhode Island for the same reason, and their comments Tuesday largely echoed points marshaled last March (CD April 1 p4). “The facts presented in the petition are simply a subset of the same facts” Verizon used before, NuVox and XO Communications said in joint comments. The FCC “must immediately dismiss” the Virginia Beach petition, and “any future Verizon forbearance petitions, that do nothing but cover the same ground as its previous forbearance requests,” Sprint said.
Some accused Verizon of bullying the FCC. “This petition amounts to a purposeful effort by Verizon to hold the Commission’s agenda hostage until it gets its way,” NuVox and XO said. The FCC “should send Verizon a clear signal that it will not reward such tactics,” it added.
Others attacked the forbearance process in more general terms. “It is the forbearance provision itself, and the absence of meaningful procedural regulations… that offer Verizon the opportunity to file and refile essentially the same petitions,” said Cbeyond, Integra, One Communications and Time Warner Telecom in joint comments. The Verizon petition “highlights the fundamental shortcomings of the current forbearance framework and underscores the need for” FCC action in a pending rulemaking to reform forbearance, Sprint said.
A grant of forbearance would “solidify an entrenched duopoly for consumers in Virginia Beach that will permanently resist competition and repel further investment in competitive alternatives,” said Telecom Investors, a group of CLEC investors.
The geographic area Verizon cites is not appropriate, CompTel and 25 CLECs said in joint comments. The FCC “should require an area for forbearance that has a basis in economic or market analysis, such as an entire [metropolitan statistical area],” CompTel said. “Verizon’s proposal has no basis other than serving Verizon’s expedient goal.” Also, the FCC should measure competition by wire centers, not rate centers as Verizon proposes, said Cbeyond and its joint filers. Wire centers are smaller than rate centers, making them “likely to yield more reliable assessments of facilities deployment,” they said.
Verizon doesn’t show competition in the enterprise or wholesale markets, CompTel said. For enterprise, the carrier “relies on information that the [FCC] has already rejected… gleaned from websites, fiber miles, and number of competitor networks,” it said. For wholesale, Verizon “merely states that Cox provides wholesale service and references a Cox website without any information concerning the actual availability or provision of wholesale service,” it said.
The FCC shouldn’t let Verizon cite cable and wireless substitution to justify forbearance, CLECs said. Cable represents residential voice competition, “but it is unrealistic to expect that it can meet the needs of most businesses and emergency services operations in terms of quality, features and reliability,” Telecom Investors said. The FCC should discount wireless competition to be consistent with a Universal Service Fund interim cap order released earlier this month, said the Cbeyond group. In that order, the FCC said “the majority of households do not view wireline and wireless services to be direct substitutes.”
Sprint concurred with many CLEC comments, but played up special access market concerns. The FCC “may not grant forbearance while Verizon retains its dominance in the special access market,” the wireless carrier said. In Virginia Beach and elsewhere, “Verizon holds a virtual monopoly over the backhaul facilities that Sprint Nextel needs to provide its services.”
Virginia regulators also weighed in against forbearance. “There is little dispute that competition between local exchange carriers is progressing in the Virginia Beach MSA,” said the consumer counsel division of the attorney general’s office. But “it is not fully competitive at this time to justify forbearance,” the agency said. “Until Verizon can show a material change in circumstances,” the FCC shouldn’t stand by its December order.
The opposition comments contain “cookie-cutter arguments,” a Verizon spokesman said. “The Verizon petition focuses on central offices in Virginia Beach where Cox has a competitive presence. It deals with an area where competition is obvious and abundant.”