Federal Communications Commission (FCC)

The FCC won’t require incumbent telephone companies to unbundle fiber-to-the-curb (FTTC) loops, in which fiber is extended within 500 ft. of a customer’s premises, the Commission said in a preliminary decision Thurs. Comr. Copps dissented and Comr. Adelstein dissented in part. The action came in response to Oct. 2003 petitions by BellSouth and SureWest Communications asking the FCC to reconsider parts of its Triennial Review Order (TRO) governing the ILEC obligations to unbundle their networks. The FCC said the new rules would encourage deployment of fiber broadband networks in residential neighborhoods and would “free companies to choose between FTTH [fiber-to- the-home] or FTTC networks based on marketplace characteristics, rather than disparate regulatory treatment.” The final order is expected out within a week or 2, FCC Wireline Bureau Chief Jeffrey Carlisle said.

The FCC issued an order Thurs. on broadband over power line (BPL) technical and administrative requirements that contained few surprises. The nascent BPL industry called it “fairly balanced” and a reasonable compromise and promised accelerated BPL rollout in the next 6 months. The American Radio Relay League (ARRL), which had bombarded the FCC with comments about interference to ham radio, said the announcement had both positive items and areas of concern.

LAS VEGAS -- Whether VoIP’s success is due to “regulatory arbitrage” or “superior technology” remains a key question, according to state PUC commissioners speaking Tues. at the USTA convention here. Commissioners said improper regulation could increase regulatory arbitrage. Meanwhile, other speakers predicted state retail rate regulation would largely fade out by decade’s end.

Level 3 CEO James Crowe called on regulators to rewrite policies and regulatory frameworks in response to “fundamental” changes in the information technology industry. Speaking Wed. at a CEO luncheon sponsored by Progress & Freedom Foundation in Washington, he said: “Even the words we use -- ‘Telecom Act’ -- are incorrect… It’s time to rewrite the Communications Act. Telephone services is only a part of much broader networking capabilities.”

Federal Energy Regulatory Commission Chmn. Pat Wood said Tues. he was encouraging major electric utilities to invest in broadband over powerline (BPL) technology and expects more money to flow to BPL soon. Wood and Chmn. Powell spoke during an unusual joint appearance after a tour of BPL facilities in Manassas, Va., provided by the city electric utility.

The FCC granted part of a petition by Core Communications Fri. that asked the agency to forbear from enforcing several ISP-bound reciprocal compensation rules approved in 2001. The agency granted forbearance from growth caps and the so-called new market rule, saying those rules were no longer in the public interest. The new market rule barred carriers from getting reciprocal compensation for new markets they entered after April 18, 2001. The growth cap was a limit on the amount of growth eligible for reciprocal compensation. The Commission chose to let 2 other rules remain -- rate caps and the mirroring rule, saying they were needed to prevent regulatory arbitrage and promote efficient investment in telecom services and facilities. With mirroring, a Bell company that wanted to pay a low reciprocal compensation rate for ISP traffic it originated needed to accept the same rate for traffic it terminated. Fri. was the deadline for the FCC to act on the petition. The Commission had planned to act on the broader reciprocal compensation remand order at the same time it acted on the Core request (CD Oct 1 p3) but reportedly couldn’t agree about the complex issue in time. ALTS Gen. Counsel Jason Oxman said eliminating the growth caps and new market rules was a good thing because the rules had “artificially limited the ability of competitive carriers to recover the costs imposed on them by other carriers that delivered traffic to the CLECs’ networks.” He said the FCC’s action helps ensure facilities-based carriers would get some compensation “albeit at an artificially low federally established rate.” Said SBC: “Instead of piecemeal decisions and subjecting itself and the industry to constant litigation, the FCC should adopt broad-based intercarrier compensation reform that would make decisions like today unnecessary.”

In comments to the FCC on how new UNE rules should be written, Bell companies urged the FCC to eliminate switches and high-capacity loops and transport from the list of UNEs Bells have to share with competitors. Meanwhile, CLECs said it’s clear competitors still need those elements under the Telecom Act’s guidelines. The FCC had asked for comments to gain input as it writes rules to replace those overturned by the U.S. Appeals Court, D.C.

The Universal Service Administrative Corp. (USAC), which administers the $2.25 billion federal E-rate program, acknowledged at a Senate Commerce Committee hearing Tues. it had lost $4.6 million as a result of an accounting change requiring the corporation to have cash on hand to meet commitment letters. The change forced USAC to sell off high interest Treasury bills (T-bills) and other assets, paying significant penalties.

With an Oct. 8 deadline looming, the FCC hasn’t come to agreement on how to legally justify a reciprocal compensation plan for ISP-bound traffic that will hold up in court. Inside sources said there appear to be enough votes to rule that ISP traffic is defined as interstate, meaning under federal jurisdiction and not subject to the Telecom Act’s reciprocal compensation requirements. However, the commissioners are struggling with how to make sure that decision holds up legally and, said an FCC official, “there’s high drama attached to it.”

Local govts. are looking to BPL to add to marketplace competition and provide service to rural and unserved areas, but it appears unlikely they'll regulate BPL any differently from other communications providers that use the public rights-of-way (ROW), including cable. That’s the view of industry officials and municipal lawyers we spoke to. Their prediction will give little encouragement to a nascent BPL industry banking on an unregulated approach, based on the reception BPL deployments have received so far.