FCC Rules on Local Competition
Hands off control to state regulators.After six months of delay, the Federal Communications Commission finally released rule changes Aug. 21 on local telephone competition and broadband network deployment, leaving the question of the status of local telephone competition largely to state regulators. For business users, the FCCs action could result in a changing array of choices, depending on state actions. The unwieldy, 576-page orderwhich the FCC chairman called "chaotic" and "a litigation bonanza"deals with the obligations of incumbent local telephone carriers (namely, Regional Bell Operating Companies) to lease parts of their networks to rival carriers at discounted rates. The order attempts to address the traditional voice services network and new fiber-based deployments for broadband services separately, but critics argue that the distinction will become meaningless as voice services migrate to packetized transport.
For residential phone users, the FCC refused to eliminate the RBOCs obligation to give rival carriers discounted access to parts of the local network. However, for midsize and large enterprises, the commission found that the obligation is no longer necessary to promote competition. State regulators have three months to rebut the commissions finding, but if they do not, the RBOCs would no longer have to offer discounted access to rivals for business customers using DS-1-line capacity. That, critics say, could lead to reduced choices and higher prices.