Sunday, October 21, 2007

Time Warner Telecom Appeals FCC Partial Grant of AT&T Forbearance Petition

Time Warner Telecom filed an appeal in the D.C. Circuit Court of Appeals of the FCC's October 11th partial grant of the AT&T forbearance petition concerning business broadband services. The appeal was filed on the grounds that the FCC Order violated the conditions of previous FCC approvals for the AT&T/BellSouth merger and that the Commission erroneously granted wholesale broadband special access relief based on analysis only of the retail market.

"The retail and wholesale markets are separate and distinct," explained Paul Jones, Executive Vice President and General Counsel, Time Warner Telecom. "Section 10 of the '96 Act requires that the FCC analyze whether the application of dominant carrier regulation to the services specified by AT&T in its petition continues to be necessary to ensure that charges and practices with respect to those services are just and reasonable. At the very least, that analysis requires that the FCC identify the correct product market."

  • Earlier this month, The FCC granted a forbearance petition from AT&T under which the carrier sought a regulatory relief of its broadband infrastructure and fiber capabilities. This relief provides AT&T with more flexibility with regard to its existing packet-switched broadband telecommunications services and its existing optical transmission services. The regulatory relief is similar to that granted to Verizon in March 2006.

    Under Title II of the Telecom Act, dominant carriers are subject to price cap or rate-of-return regulation, and must file tariffs for many of their interstate telecommunications services – on either seven or fifteen days' notice – and usually with supporting data. In addition, applications to discontinue, reduce, or impair service are subject to a 60-day waiting period for dominant carriers, as opposed to a 31-day period for nondominant carriers. Finally, dominant carriers must follow more stringent procedures under section 214 of the Act for certain types of transfers of control for which nondominant carriers are accorded presumptive streamlined treatment.

    In this ruling, the FCC granted AT&T forbearance from the application of dominant carrier tariff filing, cost support, discontinuance, and domestic transfer of control and certain Computer Inquiry requirements to broadband services with regard to (1) its existing non-TDM-based, packet-switched services capable of transmitting 200 kbps or greater in each direction; and (2) its existing non-TDM-based, optical transmission services. These services include Frame Relay Services, ATM Services, LAN Services, Ethernet-Based Services, Video Transmission Services, Optical Network Services, and Wave-Based Services. This grant is restricted to services that AT&T currently offers and lists in its petitions, and excludes all TDM-based, DS1 and DS3 services.


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