FCC Looks at Nationwide Relief, Other Options on USTelecom Petition

The agency must decide on the USTelecom forbearance petition by Aug. 2, after it granted a 90-day extension this spring (see 1905060025), or it's deemed granted. Industry officials expect commissioners to release a decision by their Aug. 2 meeting, but not much sooner. They could vote on it at the July 10 meeting or on circulation instead. Executives said there doesn't appear to be enough time or possibly motivation for industry to negotiate its own grand bargain to bring to the regulator for consideration. The agency declined to comment Thursday.

Lobbying efforts are heating up as the deadline approaches. Thursday, a filing in docket 18-141 described June 10 meetings between Incompas executives and Commissioners Brendan Carr and Geoffrey Starks and several FCC staff, urging the agency to deny the petition. The CLECs and fiber network builders represented include Gorge Networks, Granite Telecommunications, IdeaTek and Sonic. Incompas released a video Thursday to highlight competition's role in providing a bridge to broadband by small and rural carriers. Last week, USTelecom members met with FCC Chairman Ajit Pai (see 1906060037).

"The competition that ILECs face across the country justifies nationwide relief of the unbundling and reselling requirements," said Patrick Halley, USTelecom senior vice president-policy and advocacy. Incumbents request forbearance at least where there is facilities-based market competition.

Implementing a limited forbearance rule could introduce logistical challenges (see 1905290038). Experts agree the FCC broadband maps in use today "are bad and broken," said Incompas CEO Chip Pickering. Inaccurate maps shouldn't be used to cut off competition from CLECs when they're not considered detailed enough to give confidence to USF program decisions, he said. "You can't have it both ways."

A ruling in favor of nationwide forbearance would be "an impediment to network deployments," said CEO Dane Jasper of Sonic, which sells broadband in the San Francisco area. "What we need is more broadband, not less." He called the Telecom Act "an important ladder" that lets competitive carriers access ILEC copper loops to add their own technology and offer differentiated prices and packages for voice and broadband. As CLEC market share grows, Jasper said, "we deploy fiber to the premise, and as we build that out, we cease the use of the copper."

Only ILECs are required to resell network access at wholesale rates to their competitors, Halley said; cable and wireless providers don't face the same requirements. "This is not a technical issue," he said. "It's a statute issue." Now that competition's substantial, CLECs should pay resell rates, not wholesale rates, for UNEs, he said.

Cable companies are now leading providers of voice and broadband, and the FCC has "granular Form 477 data to identify where the cable companies operate," said AT&T now. Responding to Sonic, AT&T told the FCC the CLEC "is under the misimpression that the Commission is required to protect Sonic's ability to purchase inputs to its services at regulated below-market TELRIC rates as long as it can show that it puts those inputs to some good use." AT&T said the statute requires forbearance when old requirements are no longer needed to protect consumers or competition, "and the standard is clearly satisfied here because facilities-based competition for UNE-based services is nearly ubiquitous, including in the area served by Sonic."

Opponents of the petition framed their argument as CLECs connecting rural Americans, Halley said. He said though that the vast majority of UNEs sold are in urban areas and to businesses.

Lack of competition isn't limited to rural areas, said Jasper. Sonic provides service, too, in metropolitan areas where cable competition isn't available, including outlying areas beyond the center of town. His commercial customers in Sonoma County and Napa Valley, for example, would lose service reliability where the incumbent offers only a 6 Mbps maximum ADSL service. He said if the FCC grants the USTelecom petition, prices to customers could go up substantially. Consumer access to broadband isn't just about the technology available but also about affordability, he said; raising rates from $40 a month to $70 or $80 would make the service no longer affordable for some households.

"We're using these central elements for competition as the law intended," said Pickering, "to build new networks to build the bridge to 5G" in small and medium markets. Incompas doesn't support partial forbearance for the ILECs. Pickering noted natural forbearance built into existing rules. When incumbents build a new fiber network, they're no longer bound by the UNE rules, "so the need for forbearance goes away." Pickering said if the petition is granted and the competition rules relaxed, incumbents would have less incentive to upgrade their networks but would rather "milk the old network."

"This is the race to deploy," said Jasper. "Where the incumbents deploy fiber, we lose the copper" once it has been retired. "There is an incentive for incumbents to deploy fiber not just to service the customer but as a race against their competitors."