FCC Seeks Rehearing of UNE Remand, Line-Sharing Ruling

The Federal Communications Commission (www.fcc.gov) requested Monday a rehearing of a May 24 appeals court ruling that ordered the agency to review its unbundled network element (UNE) rules and vacated its line-sharing rules.

In its petition the FCC notes that the U.S. Court of Appeals for the D.C. Circuit’s decision is at odds with the U.S. Supreme Court’s May 13 decision affirming the FCC’s TELRIC methodology for determining cost-based prices that ILECs may charge competitive providers for access to UNEs.

The petition says a rehearing is warranted because it restricts the FCC’s implementation of the Telecommunication Act of 1996’s network element provisions in conflict with other provisions of the Act. The commission argues, for example, that the statute does not agree with the appeals court’s finding that a new entrant cannot be impaired in the provision of services unless the element at issue has natural monopoly characteristics. The FCC notes that such a limitation would be inconsistent with the Section 271 competitive checklist for Bell entry into in-region long-distance markets.

Critical for competitors, the FCC’s petition stays the effectiveness of the court of appeals’ decision, so that ILECs will be required to continue to provide UNEs on an unrestricted basis.

In a statement released today, Competitive Telecommunications Association (CompTel) president H. Russell Frisby Jr. applauded the commission for “standing up for its rules,” noting that competitive providers throughout the country are serving more than 1 million customers based on the FCC’s UNE and line-sharing rules.

In June, CompTel (www.comptel.org) and Association for Local Telecommunication Services (www.alts.org) urged the FCC to stay the line-sharing rules through its regulatory authority or by seeking voluntary agreements from the ILECs to abide by existing contractual arrangements with competitive carriers until its required triennial review is complete. The Act mandates the FCC conduct a triennial review of the law, which opened the industry to competition. The commission planned to resolve the unbundling issues during that examination.

“We are disappointed that the FCC has filed for a rehearing since it will further delay the commission from moving forward with its Triennial Review, in which it is already looking at the questions that the court has directed it to consider,” said Walter B. McCormick Jr., president and CEO of the United States Telecom Association (www.usta.org). “Unfortunately, any delay in achieving final rules for the issues raised in the Triennial Review will further postpone the telecom industry’s economic recovery.”

In June, competitors charged that some ILECs already had cited the appeals court ruling as grounds to stop sharing lines with competitors. SBC Communications Inc. (www.sbc.com) countered with a statement saying it would defer changing the terms, conditions or prices in current line-sharing agreements and contracts until at least Feb. 15, 2003, when the FCC is expected to conclude its review of the line-sharing rules and issue a final order.