At issue are FCC rules that were meant to spark local phone competition by allowing upstarts to provide service by leasing, at deep discounts, equipment "unbundled" from the Baby Bell networks. Equipment includes last-mile "loops" to the home or central office switches.
That competition strategy was alternately praised and damned by comments from groups as varied as the upstart competitive local exchange carriers, or CLECS, the Bells, equipment manufacturers, consumer groups, high-tech companies and others.
The rules have "had devastating, if unintended consequences," wrote SBC Communications, the nation's second largest local telephone company. They give "the appearance of competition," but the competitors "rely entirely on a cherry-picking strategy intended to serve only the most profitable customers."
Drawing the opposite conclusion was an association called the Competitive Telecommunications Association, or CompTel, representing CLECs. The FCC "can re-energize local telecommunications competition by readopting and expanding the list of unbundled network elements, or it can help the nation regress towards a system of monopoly local fiefdoms controlled by the Bell companies," the group wrote.
But the fact that the FCC itself is questioning its rules "already has caused significant harm to competitive conditions in local telecommunications markets," CompTel said.
Thinktanks, such as the free-market oriented Progress & Freedom Foundation, took aim at "overzealous unbundling and pricing regulations" that "cause phone companies and their competitors to invest less in the broadband network, helping cause the current telecom mess."
A coalition of consumer groups cautioned that any effort by the FCC to ease its competition rules "would deal a death blow to local phone competition." The FCC is "hitting the competitive communications sector while it's down" by mounting a proceeding that seems geared toward deregulation, wrote Mark Cooper of the Consumer Federation of America.
The FCC initiated its proceeding last December with the aim of creating a "more targeted approach" to deciding what network elements are available to competitors. FCC Chairman Michael Powell has voiced support for the idea that competition between carriers using separate facilities, rather than leasing the same network, is the ideal long-term goal.
The proceeding is considered critical for CLECs, many of which owe their existence to the rules. The agency isn't expected to complete its review for months.
Copyright 2002. Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
