USTelecom Asks FCC to Give Incumbent Telcos Wholesale Unbundling Forbearance Relief

USTelecom asked the FCC to relieve incumbent telcos of "outdated" wholesale duties in the 1996 Telecommunications Act that "distort competition and investment decisions." The association asked the commission to forbear from applying "unbundling obligations, which require some ILECs ... to sell access to parts of their networks to certain competitors at extremely low rates set by regulators," blogged CEO Jonathan Spalter Friday: "Once the FCC forbears from these rules, consumers and the economy overall will benefit. A market analysis shows that consumer savings could reach $1 billion over the next ten years, and removing these regulatory handicaps could lead to more than $1.8 billion in new investment over the same timeframe, creating more than 6,000 jobs." Since the 1996 mandates were adopted, "there has been a staggering decline in ILEC switched access voice subscriptions, from 186 million in 2000 to a projected 35 million this year," said the petition. "In residential markets, only 11 percent of U.S. households are projected to have an ILEC switched voice line by the end of this year. Indeed, 60 percent of Americans will have abandoned wireline voice service entirely in favor of wireless alternatives. Of the remaining 40 percent, a majority will obtain service from a non-ILEC -- often a cable company or other provider of [VoIP]. There is also intense competition in the business data services marketplace. ... A regime that imposes special burdens on providers that hold a small and shrinking share of the market distorts competition, harms consumers, and simply makes no sense." USTelecom member Windstream is strongly opposed to the petition, said Kristi Moody, general counsel. “This is an attempt by large incumbent providers to improperly use their market position in an anti-competitive way, especially in light of their proposal for a mere 18-month period for competitive carriers to transition away from these crucial facilities," Moody said. “To be clear, if this petition is granted, less competition will result, and schools, hospitals, libraries, nonprofit organizations and small and medium-sized businesses will see their rates go up.” Incompas CEO Chip Pickering said in a statement: “Big telecom’s 'competition cut off' will freeze broadband deployment and burn consumers and small businesses with higher bills. Cutting off access and kicking the little guy where it hurts is a brazen move, and we urge the FCC to reject the measure outright. The facts are clear, where smaller competitors have access and are deploying new networks, big telecom incumbents are forced to upgrade their service and lower prices. USTA’s petition delays the future and will incentivize large incumbent telecom providers to raise rates on older, slower lines for much longer." The FCC didn't comment.