In a landmark ruling, the FCC voted 3-to-2 to adopt a new set of network unbundling rules for incumbent local exchange carriers (LECs), largely favoring recommendations advocated by Commissioner Kevin J. Martin and defeating proposals supported by Chairman Michael K. Powell. The new framework clarifies a number of local phone and broadband competition issues, including previous Unbundled Network Elements (UNE) rules that had been overturned last year by the U.S. Court of Appeals. Key elements of the order are:
Impairment Standard: Under the new rules, a competitive carrier will be considered "impaired" when lack of access to an incumbent LEC network element poses a barrier or barriers to entry, including operational and economic barriers, which are likely to make entry into a market economically unfeasible.
Business UNE-P services: Local circuit switching - a key UNE-P element - for business customers served by high-capacity loops such as DS-1 will no longer be unbundled based on a presumptive national finding of no impairment. Under this framework, states will have 90 days to rebut the national finding.
Consumer UNE-P services: State commissions will have the authority to determine whether competition impairment in their market necessitates access to unbundled network elements on a granular basis. Upon a state finding of impairment, the FCC sets forth a 3 year period for carriers to transition off of UNE-P. The ruling aims to preserve the growing competition for local voice service.
Packet Switching: Incumbent LECs are not required to unbundle packet switching, including routers and DSLAMs, as a stand-alone network element. The order eliminates the current limited requirement for unbundling of packet switching.
Signaling Networks: Incumbent LECs are only required to offer unbundled access to their signaling network when a carrier is purchasing unbundled switching. The signaling network element, when available, includes, but is not limited to, signaling links and signaling transfer points.
Call-Related Databases: When a requesting carrier purchases unbundled access to the incumbent LECs' switching, the incumbent LEC must also offer unbundled access to their call-related databases. When a carrier utilizes its own switches, with the exception of 911 and E911 databases, incumbent LECs are not required to offer unbundled access to call-related databases, including, but not limited to, the Line Information database (LIDB), Toll Free Calling database, Number Portability database, Calling Name (CNAM) database, Operator Services/Directory Assistance databases, and the Advanced Intelligent Network (AIN) database.
OSS Functions: Incumbent LECs must offer unbundled access to their operations support systems for qualifying services. OSS consists of pre-ordering, ordering, provisioning, maintenance and repair, and billing functions supported by an incumbent LECs' databases and information. The OSS element also includes access to all loop qualification information contained in any of the incumbent LECs' databases or other records.
Copper Loops: Incumbent LECs must continue to provide unbundled access to copper loops and copper subloops. Incumbent LECs may not retire any copper loops or subloops without first receiving approval from the relevant state commission.
FTTH and Hybrid Loops: The FCC will not require unbundling of fiber-to-the-home (FTTH) loops. The FCC elects not to unbundle bandwidth for the provision of broadband services for loops where incumbent LECs deploy fiber further into the neighborhood but short of the customer's home (hybrid loops), although requesting carriers that provide broadband services today over high capacity facilities will continue to get that same access even after this relief is granted.
Line-Sharing: The FCC will no longer require that line-sharing be available as an unbundled element.
OCn and Dark Fiber Access: The FCC finds that requesting carriers are not impaired without Optical Carrier (or OCn) level transport circuits. However, the Commission finds that requesting carriers are impaired without access to dark fiber, DS3, and DS1 capacity transport, each independently subject to a route-specific review by states to identify available wholesale facilities. Dark fiber and DS3 transport also each are subject to a route-specific review by the states
Further specifics on the Triennial Review Order are online.
http://www.fcc.gov/Daily_Releases/Daily_Business/2003/db0220/DOC-231344A2.pdf
- In a written statement, Commissioner Kevin Martin said the FCC order provides “sweeping regulatory relief for broadband and new investments, especially for fiber deployments using new packet technology.�? He also argued that unbundling rules must take into account specific market conditions because the barriers facing competitors differ in each state. He noted that disagreements amongst the commissioners primarily concerned the unbundling of the switching network element for residential customers, a small piece of the puzzle.
- In a dissenting opinion, Chairman Michael Powell said the order makes some progress toward widespread broadband deployment, but it also represents a strategic “retreat from facilities-based competition�? and sets in place a disjointed, “Picasso-esque�? regulatory environment where 50 different state commissions will be deciding which network elements should be unbundled. Rather that providing the regulatory certainty that the market desires, Powell predicts that the UNE-P rules will be litigated through 50 different federal district courts, then through 12 Federal Courts of Appeals, and ultimately the case will wind up back in the Supreme Court after years of legal proceedings. However, Powell also dissented from the majority's decision to immediately eliminate line sharing as an unbundled network element, saying the decision to kill off this element and replace it with a transition of higher and higher wholesale prices will lead quite quickly to higher retail prices for broadband consumers.
