Adam Bender

Incumbent and competitive local exchange carriers wrangled over the right competition standard for forbearance petitions seeking unbundling relief going-forward. They commented Monday on two court-remanded decisions denying Qwest relief in Phoenix and three other markets, and Verizon forbearance in six markets (CD Sept 22 p10). CLECs also urged rejection of a March petition by Qwest seeking unbundling relief in only the Phoenix market. But some urged the FCC to hold off consideration until it answers the court remands.

The FCC will start a rulemaking abou tadding two net neutrality principles to the original four, Chairman Julius Genachowski said in a speech Monday at the Brookings Institution. The announcement sent ripples through Washington, drawing skepticism from broadband providers and Republicans and enthusiasm from longtime advocates of neutrality rules. The FCC’s two Republican members raised strong concerns about the proposal, in their biggest break yet with the chairman.

FCC Chairman Julius Genachowski plans a rulemaking notice about adding a fifth principle, this one on nondiscrimination, to the commission’s Internet policy statement, officials said. The details are sketchy, and Genachowski’s office declined to comment. At least two other eighth-floor offices hadn’t been notified before the news leaked. Genachowski plans to make the announcement at a Brookings Institution conference on Monday, the day that Commissioner Meredith Baker is running a broadband-plan field hearing in Austin.

T-Mobile’s rumored bid to acquire Sprint Nextel would be a “different kind of merger” than deals usually approved by the FCC and Justice Department, said CTIA General Counsel Michael Altschul on a Law Seminars International phone conference Thursday. T-Mobile parent Deutsche Telekom is reportedly preparing a bid for Sprint (CD Sept 15 p4). Historically, most acquisitions have been about expanding a company’s footprint into new territory, he said. But Sprint and T-Mobile are both nationwide carriers, so many consumers would lose a competitor in their market if they merged, Altschul said. The deal might face less resistance if newer entrants like MetroPCS and Leap Wireless continue to grow, Altschul said. “Going from five firms in a market to four might not be as troubling as going from four firms in a market to three.” Wireless consolidation has been beneficial to consumers because it has enabled carriers to go nationwide, eliminating roaming charges and reducing no- service areas, said attorney Donald Russell of Robbins, Russell, who worked in the Justice antitrust division from 1977 to 2001. Antitrust regulators tend to be favorable to telecom deals that expand carriers’ footprints, and against deals that eliminate a competitor, he said. A Sprint/T- Mobile merger likely would “attract a lot of attention and could well run into opposition at the Justice Department,” and “any number of conditions -- if nothing more - at the FCC,” he said. On mergers generally, Altschul and Russell said to expect a somewhat more aggressive Justice Department and Federal Trade Commission (FTC). However, Russell said Justice likely won’t be dramatically different than it was under President Bill Clinton, since many of the new department’s officials worked under that administration, he said. The FTC and Justice may take a more active advocacy role than before, Altschul said. He cited as first evidence the substantive FTC comment filed earlier this month in the FCC’s broadband plan proceeding (CD Sept 8 p5).

The FCC’s “reform play book” includes reviews of data, internal processes and public communication, senior commission staffers told reporters Wednesday. They gave the update a day before Chairman Julius Genachowski’s first appearance at an oversight hearing by the House Commerce Committee and two days before the FCC is set to complete an internal data review. “We have a chairman here who knows this stuff, cares about this stuff, and has charged us with transforming the agency into something that is going to be amazing,” said Mary Beth Richards, special counsel to the chairman on FCC reform.

National broadband policy should lower barriers to local government participation so municipalities can fill gaps in private sector coverage, said National Association of Telecommunications Officers and Advisors President-elect Joanne Hovis. On a Tuesday breakfast panel hosted by Broadband Census, Hovis said many local governments have creative ideas to spur broadband in their community, including deployment of government-funded networks. But “there are 17 states that preclude or … create enormous barriers to municipal participation in broadband,” she said. In addition to restrictive state legislation, municipalities face threats of litigation and “massive lobbying efforts,” she said: “This includes in places where carriers have not built, and do not intend to build.” Comcast Senior Vice President Joe Waz agreed government-funded broadband networks can be a good solution for unserved areas. But municipal networks haven’t been successful in cities like Philadelphia, which worked with EarthLink to set up a free Wi-Fi network. “This was a romantic vision that didn’t pan out,” he said. Muni Wi-Fi was a good idea by private sector entities that failed, but it showed local governments’ desire to fill broadband holes, Hovis said. Muni Wi-Fi may not have worked, but muni fiber could, she said.

Competition has removed need for a rule requiring incumbents to tell consumers that they have a choice of long- distance providers, incumbent local exchange carriers and one competitor said in comments last week on a USTelecom petition. The equal-access scripting rule, which also requires ILECs to read potential customers a randomized list of stand-alone wireline providers on request, applies only to small and midsized companies.

Anticipation is high for the NTIA and the RUS to reveal first cuts in round one of the broadband-stimulus awards. The notice of funding availability required agency to announce initial eliminations “no sooner than September 14, 2009.” Spokesmen for the agencies said Monday they had nothing to announce.

Interconnected VoIP providers should be required to pay state universal service fees, said states and rural wireline carriers in comments filed at the FCC Wednesday on a petition by the Nebraska Public Service Commission and Kansas Corporation Commission (CD Sept 4 p6). But Verizon and Google fought the concept of VoIP having an intrastate component subject to state jurisdiction. Vonage and some other VoIP providers didn’t object to paying state USF, but said the FCC must open a separate rulemaking first.

FCC Commissioner Meredith Baker starts “with the assumption that markets work better than government intervention and that competition regulates market behavior more efficiently than regulators can,” she told a Free State Foundation conference in her first speech since joining the commission. “Fundamentally I believe that consumers will benefit most from continued investment, innovation and competition.” Earlier, FCC Broadband Plan Coordinator Blair Levin responded to criticisms by Foundation President Randolph May that FCC workshops haven’t focused enough on what regulatory philosophies work best.