The FCC took steps last week aimed at relaxing telecom unbundling requirements. In a notice of proposed rulemaking (NPRM), the commission is seeking comment on a proposal to eliminate a range of unbundling requirements impacting DS-0, DS-1 and DS-3 loops; voice-grade loops and dark fiber transport. The commission said it is taking this step because telecom services have become increasingly competitive and some unbundling requirements are no longer needed to promote competition.

Details of the proposal include:

  • Incumbent local exchange carriers (ILECs) would no longer be required to unbundle DS-1 and DS-3 loops in counties and study areas deemed competitive in the FCC’s 2017 BDS Order and 2018 Rate-of-Return BDS Order.
  • ILECs would still be required to unbundle DS-1 loops in rural areas where there may be fewer facilities-based competitive options
  • ILECs would not have to unbundle DS-0 loops, typically used to provide voice and broadband using DSL technologies, in urban census blocks, but would have to do so in rural areas
  • The requirement to unbundle legacy narrowband voice-grade loops would be eliminated nationwide
  • Dark fiber transport between phone company wire centers in a local service area would not have to be unbundled if competitive fiber exists within half a mile of a wire center
  • Non-price cap ILECs would not be required to resell retail legacy telecom services at statutorily prescribed rates. (Price cap ILECs already received this relief)
  • A three-year transition period would enable a smooth transition for existing customers served via unbundled and resold network elements

Unbundling requirements were established in the 1996 telecom act, with the goal of spurring competition at a time when the local exchange business was largely a monopoly. In a press release, the FCC noted that ILECs now only provide 12% of all voice services and 20% of residential broadband subscriptions at or above 25/3 Mbps.

At last week’s monthly FCC meeting where the NRPM was adopted, however, two commissioners questioned some aspects of the NPRM.

Commissioner Geoffrey Starks said he was concerned that this and other unbundling decisions could reduce competition for government telecom contracts, potentially impacting taxpayers. Commissioner Jessica Rosenworcel said it would have been better for the commission to issue a notice of inquiry about unbundling requirements, rather than making such a specific proposal.

In a statement, Jonathan Spalter, president and CEO of ILEC association USTelecom voiced support for the NPRM. “The 1996 unbundling rules were supposed to spur facilities-based competition (mission accomplished), not extend discount access rates to competitive carriers in perpetuity,” he said.

Competitive carrier association INCOMPAS had a different take.

The plan is “bad news for 5G network builders and helps bailout AT&T who has told Wall Street they plan to ‘milk’ profits from old lines, while cutting $3 billion from new network investment,” said INCOMPAS CEO Chip Pickering in a statement.

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