Friday, February 4, 2005

FCC Adopts Unbundling Rules

The FCC formally adopted new rules concerning the obligations of incumbent carriers (ILECs) to make elements of their network available to other carriers seeking to enter the local telecommunications market. The FCC had voted to approve the new rules in December 2004. The new rules were issued in response to the March 2004 decision by the U.S. Court of Appeals for the D.C. Circuit which overturned portions of the Unbundled Network Element (UNE) rules in the FCC's Triennial Review Order.
http://www.fcc.govHighlights of the new rules include:

  • An Unbundling Framework. -- The new rules clarify the impairment standard adopted in the Triennial Review Order in one respect and modify its application in three respects. First, impairments are evaluated with regard to the capabilities of a reasonably efficient competitor. Second, the Triennial Review Order's “qualifying service�? interpretation of section 251(d)(2) is set aside. The use of UNEs are prohibited for the provision of telecommunications services in the mobile wireless and long-distance markets, which the FCC previously found to be competitive. Third, the impairment test draws reasonable inferences regarding the prospects for competition in one geographic market based on the state of competition in other, similar markets. Fourth, the appropriate role of tariffed incumbent LEC services are considered in the unbundling framework, and that in the context of the local exchange markets, a general rule prohibiting access to UNEs whenever a requesting carrier is able to compete using an incumbent LEC's tariffed offering would be inappropriate.


  • Dedicated Interoffice Transport. -- Competing carriers are impaired without access to DS1 transport except on routes connecting a pair of wire centers, where both wire centers contain at least four fiber-based collocators or at least 38,000 business access lines. Competing carriers are impaired without access to DS3 or dark fiber transport except on routes connecting a pair of wire centers, each of which contains at least three fiber-based collocators or at least 24,000 business lines. Finally, competing carriers are not impaired without access to entrance facilities connecting an incumbent LEC's network with a competitive LEC's network in any instance. The new framework adopts a 12-month plan for competing carriers to transition away from use of DS1- and DS3-capacity dedicated transport where they are not impaired, and an 18-month plan to govern transitions away from dark fiber transport. These transition plans apply only to the embedded customer base, and do not permit competitive LECs to add new dedicated transport UNEs in the absence of impairment. During the transition periods, competitive carriers will retain access to unbundled dedicated transport at a rate equal to the higher of (1) 115% of the rate the requesting carrier paid for the transport element on June 15, 2004, or (2) 115% of the rate the state commission has established or establishes, if any, between June 16, 2004 and the effective date of this Order.


  • High-Capacity Loop. -- Competitive LECs are impaired without access to DS3-capacity loops except in any building within the service area of a wire center containing 38,000 or more business lines and 4 or more fiber-based collocators. Competitive LECs are impaired without access to DS1-capacity loops except in any building within the service area of a wire center containing 60,000 or more business lines and 4 or more fiber-based collocators. Competitive LECs are not impaired without access to dark fiber loops in any instance. We adopt a 12-month plan for competing carriers to transition away from use of DS1- and DS3-capacity loops where they are not impaired, and an 18-month plan to govern transitions away from dark fiber loops. These transition plans apply only to the embedded customer base, and do not permit competitive LECs to add new high-capacity loop UNEs in the absence of impairment. During the transition periods, competitive carriers will retain access to unbundled facilities at a rate equal to the higher of (1) 115% of the rate the requesting carrier paid for the transport element on June 15, 2004, or (2) 115% of the rate the state commission has established or establishes, if any, between June 16, 2004 and the effective date of this Order.


  • Mass Market Local Circuit Switching. -- Incumbent LECs have no obligation to provide competitive LECs with unbundled access to mass market local circuit switching. The new rules adopt a 12-month plan for competing carriers to transition away from use of unbundled mass market local circuit switching. This transition plan applies only to the embedded customer base, and does not permit competitive LECs to add new switching UNEs. During the transition period, competitive carriers will retain access to the UNE platform (i.e., the combination of an unbundled loop, unbundled local circuit switching, and shared transport) at a rate equal to the higher of (1) the rate at which the requesting carrier leased that combination of elements on June 15, 2004, plus one dollar, or (2) the rate the state public utility commission establishes, if any, between June 16, 2004, and the effective date of this Order, for this combination of elements, plus one dollar.

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