As one would expect, telecommunications companies reacted in different way to the FCC’s decisions last week regarding line sharing and fiber network access.
A divided FCC voted to permit competitive local access carriers (CLECs) to continue to get access to regional Bell operating companies’ networks under line sharing deals for unbundled network elements (UNE), subject to control by state utility commissions. However, the FCC also granted the RBOCs greater control over their own fiber and broadband networks, hoping to spur competitors to install their own fiber facilities, and took steps that could force digital subscriber line (DSL) competitors off the Bell networks.
The Bells didn’t like their failure to win every decision.
BellSouth criticized the FCC’s ruling, saying the FCC “missed an historic opportunity to address serious problems in the vital telecommunications industry sector, with consequences for every American consumer.”
Referring to requirements for continued line sharing, CEO Duane Ackerman said in a statement: “If allowed to stand, (the) switching decision will mean that regulation continues to stifle capital investment and research and development in the telecom industry.” He added that the ruling “puts at risk” the US position in “global telecommunications leadership.”
Tom Tauke, senior vice president for public policy and external affairs for Verizon, was critical as well.
“The Federal Communications Commission had a great opportunity today and blew it. Rather than bringing stability, certainty and clarity to the regulatory structure for the industry, the commission left a void and handed off the decision-making to the states. This is a recipe for continued disarray in the industry and more litigation,” he said in a statement.
“The future of telecommunications is broadband, and on this issue the commission appears to have moved in the right direction but may have important details wrong. Moreover, the future investment in the wireline network is tied to a strong financial base for the overall business.
As one would expect, reaction from the CLEC sector differed.
US LEC, a regional telecommunications provider based in Charlotte, liked the fact that CLECs will continue to get access to the RBOC networks and UNEs.
“While US LEC’s business plan does not rely on UNEs, we are pleased that the FCC reaffirmed its commitment to long-term competition,” said Aaron Cowell, US LEC’s president and CEO. “Competitive carriers will retain access to the building blocks for competitive networks. Customers stand to benefit most from this decision because they will continue to receive the improved customer service and lower costs that competitive carriers like US LEC provide.”
WorldCom also praised the local line sharing ruling but criticized the fiber shared networks decision. Not getting access to Bell fiber networks, WorldCom said, “relegates competitors to an inferior method of broadband delivery.”
“A majority of the FCC has voted to preserve competition in the residential network,” said Wayne Huyard, president of MCI Mass Markets, which is part of MCI. “This will enable us to continue providing and, indeed, expanding our revolutionary ‘all-distance’ service, The Neighborhood.” (The package includes local and long distance calling.)
US RealTel, which provides voice and high-speed Internet service to more than 1,000 Class A commercial office complexes in 25 metro markets, said it saw no negative consequences of the decision. However, the Atlanta-based company said it expected many competitors who relied on line sharing agreements with the RBOCs would suffer.
US RealTel delivers services through its subsidiary, Cypress Communications. The business complex services were acquired from MCI last year. US RealTel recently applied for and received CLEC status.
Reaction from the cable and wireless industry was more muted since the rulings didn’t affect their businesses. However, Steve Berry, senior vice president of government affairs at CITA (Cellular Telecommunications & Internet Association) told WirelessWeek he expected wireless and cable carriers to benefit.
“By the time the states get the new UNE rules down in the next couple of years, 50 percent of voice customers will be lost to wireless and cable,” he said. “Two to three years out, they’ll say the decision was looking the wrong way.”
