Stretching the Truth About Broadband Services

Posted: 08/1998

Stretching the Truth About Broadband Services
The RBOCs’ Questionable Grasp of Reality

By Carol Ann Bischoff

Using a broom labeled "Section 706," four of the regional Bell operating
companies (RBOCs)–Ameritech Corp., Bell Atlantic Corp., SBC Communications Inc. and US
WEST Inc.–are trying to sweep aside key market-opening provisions of the
Telecommuni-cations Act of 1996, the most significant competitive telecommunications
legislation of this generation. Despite the pent-up consumer demand for high-speed data
transmission capabilities, these monopoly carriers claim that the RBOCs–and only the
RBOCs–can meet this skyrocketing demand.

The Telecom Act was intended to create a pro-competitive environment for all
telecommunications services, including advanced data services. To achieve this goal, the
Telecom Act clearly specified certain bundling and resale obligations that the RBOCs must
comply with to make their networks available to new entrants on an equal and
non-discriminatory basis. The Telecom Act makes no distinction on the basis of technology,
nor is it sensitive about whether the local network is used to provide voice or data
services.

This point is crucial because digital subscriber line (xDSL) technology allows
consumers–particularly in the residential and small business markets–high-speed access
to corporate networks and the Internet via twisted copper wires. Basically, xDSL utilizes
electronics on existing copper pairs to increase their capacity. For consumers to have a
choice of local exchange providers (LECs), broadband providers and Internet service
providers (ISPs), however, competitive carriers must be able to access the xDSL
capabilities with the RBOC network. In particular, they need loops equipped with xDSL
electronics ("conditioned loops") and the local switching and transport
associated with xDSL transmissions.

As the former telecommunications counsel to Sen. J. Robert Kerrey of Nebraska, who
amended Section 706, I can attest that the law does not justify the RBOCs’ Section
706 claims. Quite clearly, their petitions are unnecessary and potentially devastating to
competition in advanced services. Moreover, the Federal Communications Commission (FCC) is
explicitly prohibited under Section 10(d) of the Telecom Act from granting their requested
relief–forbearance from the interconnection, unbundling and resale obligations under
Section 251(c), or the in-region long distance entry conditions under Section 271.

Data Services In High Demand

Competitive carriers today are leading the way in bringing innovative advanced
telecommunications services to the public. Scores of providers–including members of the
Competitive Telecommunications Association (CompTel) such as e.spire Communications Inc.,
Frontier Communications Corp., ICG Netcom, Intermedia Communications Inc., IXC
Communications Inc., Level 3 Communications Inc., Qwest Communications Inc., the Williams
Networks and WorldCom Inc.–are investing billions of dollars in state-of-the-art fiber
optic transmission facilities, synchronous optical network (SONET) and OC-x architectures
and deploying advanced, nationwide data networks at record speeds. As long as customers
continue to demand better and faster data transmission capabilities, there is no end in
sight to these types of investment. Even the RBOCs are,
by their own admission, "aggressively extend[ing]" their networks to satisfy
demand for data service. In fact, Bell Atlantic’s announcement in late March that it will
spend $1.5 billion to upgrade its data network capabilities demonstrates that no changes
are needed in RBOC regulation to encourage the deployment of advanced telecommunication
capabilities.

Hands Off, FCC

The RBOCs claim they need forbearance under Sections 251(c) and 271 for them to have
the appropriate incentives to invest in network upgrades. In reality, they are trying to
deny competitors the ability to offer xDSL services via resale or unbundled elements, as
required under Section 251(c). This anticompetitive behavior forces competitive LECs
(CLECs) to furnish their own xDSL electronics and collocate at central offices to offer
xDSL services.

Moreover, the RBOCs want the FCC to create a "global data LATA" or modify
existing LATAs, allegedly to encourage speedier development of high-speed broadband packet
switches. If their goal is interLATA relief, the Telecom Act sets forth the path for
removal of interLATA restrictions by compliance with Section 271. (It is worth noting that
eight states served by RBOCs are single LATA states, where the RBOCs are free today to
offer broadband services if that really is their objective.)

The truth is that the FCC has no authority to excuse the RBOCs from fulfilling their
interconnection, unbundling and resale obligations under Section 251(c), or the in-region
long distance entry conditions under Section 271. Even if it did have such authority,
doing so would have devastating effects on the ability of the competitive industry to
compete in local and advanced telecommunications services. Section 10(d) expressly forbids
such action in the clearest terms. The RBOCs’ attempts to avoid Section 10’s limitations
in the FCC’s forbearance authority must fail, because Section 706 cannot be read as an
independent grant of authority to exercise "regulatory forbearance."

What the RBOCS Must Do

Industry participants concerned with the continued advancement of broadband services
recently formed the Competitive Broadband Coalition in an effort to lobby policymakers on
the threats to continued deployment of innovative advanced services to consumer posed by
the RBOCs’ Section 706 efforts. The newly formed coalition includes CompTel, the
Association for Local Telecommunications Services (ALTS), AT&T Corp., Qwest, LCI
International Inc. and MCI Communications Corp. The Competitive Broadband Coalition has
serious concerns that the RBOC Section 706 petitions in effect establish yet another
monopoly for the next generation of telecommunications infrastructure. Grant of their
requests would result in a screeching halt for broadband development across America.

Today’s competitive carriers are responsive to consumers’ needs, and they are leading
the way in bringing advanced telecommunications services to the public. It was a
competitive carrier–WorldCom–that unveiled xDSL technology at the Library of Congress in
1996. Now, however, monopoly carriers are attempting to discourage the provision of
advanced services by competitive companies.

Policymakers must ensure that competitive carriers can continue their pioneering role
in advancing the growth of broadband infrastructure. The RBOCs should stop trying to evade
their obligations under the Telecom Act and should fulfill them promptly and faithfully.
If and when they do so, consumers of all services, including advanced data services, will
be the beneficiaries.

Carol Ann Bischoff is vice president, legislative and regulatory affairs, for
CompTel. She was assisted in this article by Thomas Buckley, CompTel’s law clerk. She can
be reached at (202) 296-6650.