RBOCs Declare War on CLECs

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

RBOCs Declare War on CLECs

This is a letter from telecom lawyer Kris Twomey to the members of FISPA, an association for ISP's and CLEC's. I know that Politics and Regulatory talk puts you to sleep or bores you or you don't have time for it - but these proposed changes to the Telecom Act WILL affect you!

"One of the questions I am often asked by ISPs considering starting CLEC operations is whether access to unbundled network elements ("UNEs" or "the copper in the ground") will continue in the future. My response has always been something like, "Of course, the Telecom Act guarantees it. Congress would have to revise the Act for any changes to impact UNE availability." Those of you that know me know that I don't get involved in hyperbole, and I'm basically too optimistic to accept any sky is falling-type theories. Now though, there's something brewing in D.C. that genuinely worries me. Turns out AT&T has a plan to wipe out the Telecom Act of 1996, or at least, the parts regulating interconnection.

"I think the next great telecom policy battle is at hand-- nothing less than an attempt by AT&T and others to dismantle the Telecom Act, destroy CLECs, and essentially codify the ILEC/Cableco wireline duopoly. Smaller CLECs need to get organized and respond.

"Debate has begun on all fronts about the future of telecom regulation and I believe we are at the precipice of major change. Over the last couple years, AT&T and Verizon have been quietly lobbying for the FCC to consider rules to transition to an all-IP network, or in ILEC-speak "facilitate a sunset of the POTS network." Verizon is even using a natural disaster to justify removing copper (and therefore interconnection rights) from its network: Other ILECs have been murmuring that the Telecom Act is now 15 years old and needs to be updated.

"On November 8th, AT&T filed the first real proposal with the FCC to "modernize telecom regulation for an IP world." The petition is here [pdf].

"The AT&T petition is a direct shot across the bow of the FCC and CLECs, essentially daring the FCC to act. The petition is breathtaking in its audacity. Here are its main points and suggestions":

  • Eliminate the availability of copper loops (all UNEs, really) in certain central offices as an experiment and see what happens; 
  • Limit the time that CLECs can object to ILEC notices of network changes; 
  • Reduce state utility commission regulatory authority; 
  • Allow ILECs to remove all copper facilities when the feeder (such as a remote terminal) is upgraded to fiber; 
  • Eliminate legacy ILEC regulations such as carrier of last resort obligations, long distance parity, etc.

"Various stakeholders have responded. The National Regulatory Research Institute, a group representing state public utility commissions, issued a paper on the TDM to IP network transition (here).

"The trade associations have begun to weigh in on AT&T's proposal. CompTel and individual CLECs have lobbied for pro-competitive policies and filed proposals concerning the IP network transition, preserving access to copper loops in fiber-fed ILEC networks, and requiring direct IP to IP network interconnection.

"The cable trade association, NCTA, filed a response to the AT&T petition arguing that the FCC should take its time developing a record. After all, they've actually got a pretty good deal under the current rules. The NTCA, which represents smaller ILECs, filed its own petition on November 19th seeking regulatory relief.

"I am concerned that there is no organized coalition of smaller facilities-based CLECs to defend its interests and propose alternative ideas. I fear COMPTEL will push the interests of its large CLEC members over those of smaller CLECs. I do not think that necessarily the interests of Level 3, Windstream, etc., that do not purchase many copper loops, will adequately align with those of truly local competitors in suburban or rural markets reliant on central office connectivity at regulated rates. I'm especially worried because, well, those "local competitors" describes virtually my entire client base and the businesses of many people that I consider friends."  [RAD's note: Mine too, btw]

"As a preliminary matter on strategy, I believe that it is fruitless to solely fight against a policy without offering clear alternative proposals. I also think that by refusing to acknowledge the legitimacy of some opponents' suggestions detracts from the power of our unique ideas. I have several alternative, pro-competitive policy suggestions that would truly represent a modernization of the current system; seek to even the current playing field; and give the ILECs relief from some of the legacy regulatory requirements that are arguably outdated. For now though, it is better that these ideas remain off-list until consensus positions can be developed by a group.

"I have spoken to several of my facilities-based CLEC clients that are interested in forming an organized opposition to these attempts to gut the Telecom Act both at the FCC and to lobby Congress for a true modernization of the Act. I will be hosting a conference call for interested companies on Wednesday, December 12th at 2pm EST. The call is restricted to optimists--those that do not subscribe to the defeatist notion that the ILECs must always get their way. I have some very specific ideas and policy proposals, but am not pre-disposed to any particular strategy. I think it's time for like-minded companies to join forces to protect their interests and I'd be honored to represent them. Please contact me off-list at kris at lokt.net for call-in details."

[RAD Commentary] The RBOCs lost a court battle each recently.

VZW lost in Appeals court its fight to forbear cellular data roaming. It challenged the FCC's authority on this matter and lost.

Meanwhile, ATT lost a data throttling case in small claims court.

Copper clipping will affect Agents because EoC is a big deal - but requires copper plant!!!

XO, TelePacific, MegaPath and other CLECs would lose territories that they could offer EoC and flavors of DSL. ADTRAN, Zhone and Overture Networks make the geat gear that goes in the CO for CLEC's to provide EoC. These companies would be affected as well. Can you see the ripple effect?

How about affordable mid-band Internet Access for the SMB space? That is what EoC is - and it will go away.

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