BURK CALLS FOR NEW LINE UP AT FCC, MORE DEREGULATION

ORLANDO -- The FCC is “incapable of coming to a concise decision on the basic issues that impact the growth of the telecommunications industry,” CompTel Chmn. Richard Burk said at a CompTel trade show here. He said the evidence of that was “the extraordinary long delay” in issuing the Triennial Review Order (TRO) text and the “prominent inconsistencies in those rules.” He said the Commission needed “some re- evaluation so the Administration can ensure that rules are implemented properly and consumers’ best interests are kept in mind.”

Burk compared the FCC with a sports team that was going in the wrong direction: “It’s time for corrective action to be taken at the FCC. Perhaps it needs a new coach at the helm to take control and remind the team of the basics. Or perhaps the team needs some new faces in the lineup to give it a renewed sense of purpose. “

Burk said the Commission created uncertainty while new rules were developed or current rules amended: “The Triennial Review decision is not as bad as it could have been… but at the end of the day what we have is the furthest thing one can imagine from regulatory certainty.” CompTel Pres. Russell Frisby said the FCC took a “dangerously anti-competitive turn in the order and subsequent TELRIC notice. The next year will be just as tough as the past few, as we face an uphill battle to ensure that competition is allowed to continue flourishing.” Burk criticized FCC Chmn. Powell, who, he said came “up short on all accounts” he had outlined as Commission’s primary focus 19 months ago.

Uncertainty about whether the FCC’s rules will continue to encourage the development of competition and restrain the anticompetitive actions of the monopolies is harmful to CLECs’ business, Burk said. However, he said “the uncertainty as to the survival of the competitive industry caused by changes in rules that eliminate some forms competition while reducing the regulatory constraints on the monopolies is the uncertainty that ‘kills.'” He said much of the basis for the TRO was an assumption that the law favored facilities based competition over the other 2 forms of market entry described in the act: “The law contains no such preference.” He said the availability of the UNE-P at cost- based rates wouldn’t discourage the development of facilities-based competition: “If that were true, we would have the least amount of facilities based competition where we have the most widely available cost based UNE-P such as Texas, and New York. The assumption doesn’t hold up.”

More uncertainty is yet to come as a result of the FCC’s recently introduced NPRM on TELRIC pricing methodology, Burk said: “The FCC’s initiation of this proceeding is not mandated at this time, and many agree that TELRIC is working just fine.” He admitted that as a result of the changes in the TRO, “it might be time for a second look at TELRIC. Perhaps pricing issues should be revisited so competitors do not have to pay for elements that are no longer available to them as a result of the Triennial Review Order. If that is done, we believe that rates will go down.” However, he said uncertainty would remain until the questions were answered about how rates may change and how that would impact costs and ultimately the prices consumers would pay.

The Commission “has done nothing meaningful” to make performance measures more clear and precise, Burk said. He said the FCC’s refusal to look at special access pricing and performance measures hurt competitive carriers: “If you're a retail provider of all distance services, the ILEC gets to charge you higher prices than it charges itself. And the ILEC can degrade the service that you provide to your retail customers. The same can be said of carrier’s carriers that need special access circuits to get their wholesale customers on-net.”

“FCC is hardly the enforcer it would like you to believe it is,” Burks said. He said most of the fines assessed on Bell companies had resulted from automatic penalties that were put in place if the Bells violated conditions of their merger agreements: “These were merger conditions that the chairman himself opposed when they were adopted.” What’s worse, he said, is that “the FCC wasn’t the one to discover the violations in the first place. In most cases they were discovered and reported by third-party auditors.”

In its TRO, “the FCC does nothing to ensure that competition can flourish in broadband,” Burks said. He said elimination of line-sharing “in an effort to deny alternative providers from offering DSL” created a duopoly “leaving only the BOCs DSL and cable modems for consumers’ high speed Internet access.” Frisby said the rules denied competitors access to advanced networks, which he said “may stunt the growth of broadband in the U.S.”

Burks said prohibiting packet transmission unbundling was “a prime example of the inconsistencies of the FCC’s recent actions because they now are not allowing the unbundling of packet transmission, even though previous rules have encouraged competitors to deploy such new technology when building their state of the art networks.” He said by refusing to unbundle packet transmission, the FCC had limited consumers’ access to competitive alternatives, even ones that have been already deployed -- if the LEC changes loop transmission technology.

Frisby said CompTel would be actively involved in all stages of TRO appeals. He also said part of CompTel’s activities would include involvement in the rulemaking the FCC recently undertook to re-evaluate the TELRIC methodology: “I would like to make it clear: we are not anti-bell, we simply are pro-competition.”