FCC Order Would Provide Regulation Relief to Incumbents on BDS, UNE Transport
The FCC plans to undo "unnecessary regulation" of transport services and facilities for ILECs, according to two draft orders released Wednesday that will come up for a vote at the commissioners' July 10 meeting, as the agency promised a day earlier (see 1906180053). An opinion and order from docket 18-141 would partially grant USTelecom's request for forbearance from DS1 and DS3 transport unbundling obligations for price-cap carriers, where endpoints for competitive fiber is located within a half mile. An order on remand from docket 16-143 would grant price-cap carriers nationwide relief from ex ante price regulation of their lower speed TDM transport business data services.
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USTelecom wanted nationwide forbearance from selling unbundled network elements (UNE) that included the DS1 and DS3 transport. It asked incumbents at least be granted relief wherever facilities-based competition exists (see 1906130005). Competitive LECs argued broadband maps aren't granular enough to accurately describe areas with such competition.
As with UNEs, incumbents and their rivals disagree on BDS deregulation (see 1902110027). But the FCC says "competitive suppliers with nearby fiber put competitive pressure on transport prices" and saw evidence that "providers actively compete for customers located within about a half mile from their networks." The agency notes cable operators, for example, compete with price cap incumbent LECs for transport services but don't rely on interconnection with incumbent LEC wire centers to provide service. The FCC notes an increase in BDS business both among cable operators and ILECs and said TDM transport services can be provided over fiber. The agency says cable fiber "remains relevant to a competitive analysis regardless of whether competitors connect with incumbent facilities or bypass them." And CLECs "are increasingly bypassing incumbent LEC infrastructure."
The agency acknowledges an "extremely small" percentage of buildings with BDS demand would face no regulatory restraint on pricing for TDM transport once the rule goes into effect. It believes "costs of imposing ex ante pricing regulation far exceed the benefits" of continued regulation. It doesn't support proposals for a competitive market test for TDM transport services, saying it would be wrong to conflate the TDM transport and TDM channel termination markets. CLECs would be required to remove all BDS from their interstate tariffs by Aug. 1, 2020.
The UNE forbearance would be conditioned on a six-month transition period. In that time, CLECs would be allowed to place new orders for DS1 and DS3 unbundled transport. Competitive carriers would have three years to arrange alternative transport. The FCC says that by removing regulatory burdens, it's fostering a move away from legacy networks and encouraging investment in next-generation networks and services. "Such a timeframe will enable competitive LECs to execute short term business plans and fulfill contractual obligations they may already have to serve existing or new customers using UNE DS1/DS3 transport," the FCC says.
The agency notes the petition for forbearance was granted only to the extent discussed in Wednesday's order. In a letter to FCC earlier this week, USTelecom withdrew its petition for forbearance to provide dark fiber transport to CLECs (see 1906180081).
"The transport element at stake in the draft FCC Order represents a critical bridge to build rural broadband and connect America," Incompas CEO Chip Pickering said. "USTelecom's withdrawal of dark fiber from its forbearance request is a good first step. Dark fiber can help light the way for new competition. But several critical threats to broadband competition and fiber deployments remain pending in the forbearance petition."