The FCCs decision came by default this week when the politically split agency (two Republicans and two Democrats) failed to act on a petition filed by Verizon in December. By not denying the petition, the FCC in effect granted it.
FCC Chairman Kevin Martin said the action will help establish a policy environment that encourages broadband investment, and promoting broadband deployment is one of the commissions highest goals.
"This relief will enable Verizon to have the flexibility to further deploy its broadband services and fiber facilities without overly burdensome regulations," Martin said.
AT&T CEO Ed Whitacre told an audience at the Bell companies annual conference in Las Vegas March 21 that his company will seek the same type of regulatory break.
The movement toward deregulation of the nations largest phone companies worries user advocates, as well as the FCCs two Democratic commissioners, Michael Copps and Jonathan Adelstein, who objected to both the process of the decision-making and the result.
Charging that the agencys inaction "erases decades of communications policy in a single stroke," Copps said that small-business users will suffer as a result. "In effect, we provide industry the pen and give it the go-ahead to rewrite the law."
Both Copps and Adelstein warned that granting Verizons petition by default could leave parts of the network completely unregulated, which could endanger homeland security because law enforcement agencies could find that key networks are no longer subject to wiretap laws.
The federal subsidy system ensuring affordable phone service in rural America could also be put in jeapardy, as could customer privacy and disability access, they said.
Noting that business users are the countrys "most technology-dependent consumers," Adelstein said the commissions inaction may result in price hikes and fewer choices for organizations such as banks, universities and government agencies.
The Verizon decision "helps one telecommunications giant at the expense of virtually everyone else, including small and rural telephone companies, and business users of all sizes," Adelstein said. "Rural carriers have raised unanswered questions about whether the petitioner will be able to exercise market power to dictate the prices, terms and conditions of interconnection with small rural providers, potentially raising prices and eliminating choices for rural consumers."