USTELECOM PETITIONS FCC TO FORBEAR FROM ILEC UNE AND RESALE OBLIGATIONS, POTENTIALLY ELIMINATING CORNERSTONES OF COMPETITION
May 7, 2018
On May 4, 2018, USTelecom, a trade association representing the largest incumbent local exchange carriers (“ILECs”), filed a petition for forbearance (“Petition”) from the ILEC-specific unbundling and resale obligations that were an integral part of the quid pro quo for ILEC entry into long distance under Section 271 of the Telecom Act.
Remarkably, USTelecom petitioned for forbearance from all of Sections 251(c)(3) and 251(c)(4), the keystone provisions of the Telecom Act designed to provide competitors access to the ubiquitous incumbent networks, which the ILECs developed with the benefit of their historic monopoly franchises. This proceeding will be critical to the many companies that rely on unbundled network elements (“UNEs”) and resale to survive in the market against their ILEC competitors.
Although the USTelecom Petition downplays the significance of UNEs and resale, these strategies remain the most significant means for competitors to compete with the ubiquitous networks of their often much larger ILEC competitors. On the one hand, USTelecom claims that “UNEs play a very minor and diminishing role in” the competitive marketplace. Yet somehow eliminating these critical obligations would save consumers $1 billion, according to USTelecom. Of course, it is not at all clear how increasing the cost of key service inputs to ILEC competitors could save consumers money. Consumer groups have consistently opposed previous USTelecom efforts to undermine ILEC unbundling obligations in light of the adverse impact on consumers and competition.
The Petition reflects other contradictions. For example, the Petition claims that the decline in the use of UNEs reflects the fact that competitors no longer depend on UNEs. In the same breath, the Petition highlights USTelecom’s ongoing campaign to make UNEs less and less accessible to competitors. If in fact there has been a decline in UNEs, it is not because competitive entry is not facilitated by their availability, but a testament to the campaign of USTelecom and its large ILEC members to eliminate and narrow the utility and availability of UNEs, in order to put financial pressure on the ILECs’ competitors.
Eckert Seamans attorneys have been active in obtaining UNE and resale arrangements for competitive providers under state and federal law for over twenty years, including participation in many of the proceedings that originally set the rates for UNEs and resale.
If your company is interested in opposing the USTelecom Petition or if you have questions about the Petition, please contact any of the attorneys in our Telecommunications Practice Group. We will also keep you apprised as the FCC provides public notice of the Petition and issues dates for carriers to file comments and reply comments.
This Utilities and Telecommunications Alert is intended to keep readers current on matters affecting businesses and is not intended to be legal advice.