Global Telecommunications Regulation TCOM 5173

(c) 2004 Charles G. Gray 1

Global Telecommunications Regulation

TCOM 5173

The Telecommunications Act of 1996

Outstanding Issues-Role of the States

20 February 2000(Originally Scheduled for 18 February)

Charles G. Gray


FCC Implementing Orders (1)• Video programming accessibility

• Telecommunications Development Fund

• Eliminate barriers to market entry

• Modify regulations on media ownership

• Broadcast license renewal procedures

• Create Federal-State Joint Board on Universal Service Definition

• Rules of open video systems


FCC Implementing Orders (2)• HDTV spectrum licenses

• Television violence rating system

• CDA declared unconstitutional - FCC avoided several tasks

• FCC reforms – eliminate functions and regulations

• Radio frequency emission standards

• Interconnection regulations


FCC Implementing Orders (3)• Prevention of unfair billing practices.

• Regulations for pay phone per-call compensation

• Infrastructure sharing rules for ILECs– Collocation

• Rules for “exempt telecommunications companies”

• Regulations for pole attachments


FCC Implementing Orders (4)

• Rules on alarm monitoring services

• Rules on numbering administration

• Procedures for preempting state’s jurisdiction in dispute settlement

• Rules for interconnection coordination

• Rules to prohibit “slamming”

• Rules for compelling a carrier to provide universal service


FCC Implementing Orders (5)

• Procedures for BOC entry into interLATA services

• Regulations for BOC manufacturing

• Equal access for cell phone subscribers

• Establish the Telecommunications Development Fund

• Local Competition Order

• Line Sharing Order


Court Rulings on FCC Orders

• Washington, DC Circuit Court

• Eighth Circuit Court – Iowa Utilities Board vs. FCC (1997 and 2000)

• US Supreme Court (24 May 2002)– Meaning of “Impairment”, “proprietary”, and

“necessary”– National uniform standard too broad– Remanded both the Line Sharing Order and the

Local Competition Order to the FCC


Courts Replace the FCC as “de facto” Regulator

• Literally hundreds of cases filed in the 8 years since TA 96

• A number of them have gone all the way to the Supreme Court

• We will consider only a very few of the issues



Triennial Review - 2003• Adopted 20 February 2003• Released 21 August 2003

– Unusual delay (usually released in three months)– 485 pages, plus another 100 for appendices and

dissenting statements from Commissioners

• Suits began immediately– US Court of Appeals in Washington, DC– Judges asked “very painful” questions (Feb 04)

• Most observers expect remand to the FCC• Ultimate decision by the US Supreme Court


Triennial Review - Unbundling

• Mass market loops– Access to copper loops (narrow and broadband)– Not required to unbundle broadband only– If copper replaced by fiber, narrowband only

• Enterprise market loops– Not required to unbundle OCn loops

• Maximum of 2 loops per carrier per customer location

– Must unbundle dark fiber, except where states have found no “impairment”


Unbundling (2)

• Subloops for access to multiunit customer premises

• Network Interface Devices (NID)

• Switching for enterprise market (DS1 and above)– CLECs not “impaired”– States are final arbitrators


Unbundling (3)

• Switching for mass market (DS0)– CLECs “impaired” without access to local

switching– States must make determination

• Packet switching– ILECs not required to unbundle packet switching

routers or DSLAMs


Unbundling (4)

• Signaling networks– Unbundling only when CLEC is also buying

unbundled switching• Includes signaling links and signal transfer points

• Call-related databases– Only when CLEC buys ILEC switching– If CLEC provides its own switching, then

• No access to LIDB, toll-free calling, LNP, calling name, operator services, directory assistance, or AIN


Service Eligibility• CLEC must be certified by the state to

provide local voice service

• CLEC must demonstrate that it actually provides a local voice service over every DS1– Provide 911/E911 capability to each circuit

• Certify additional “architectural safeguards” (network related stuff)


Remaining Issues• Clarification of TELRIC rules

– FCC will open a separate proceeding

• “Fresh Look”– CLECs cannot avoid any contractual liability

• Transition period– The FCC will not intervene in pending contract

negotiations

• Duty to negotiate in good faith– Bring in line with the “Local Competition

Order”


TELRIC• Total Element Long-run Incremental Cost

• The cost a new company using completely new technology would incur

• Bears no relationship to the actual real-world cost of anything

• Is it a “taking” under the US Constitution?– Fifth Amendment prohibits taking private

property without “just compensation”

• US Supreme Court approved May 2002


FCC Media Ownership Ruling• Allowable TV audience coverage increased

from 35% to 45%– CBS and Fox already exceeded limit at 39%– NBC 34%– ABC 24%

• No change in radio rules– Clear Channel owns 1,270 stations

• Allows cross-ownership between radio, TV and newspapers


The Big Media Players

• Murdoch-FoxTV-HarperCollins-Weekly Standard-New York Post-London Times-DirectTV

• GE-NBC-Universal-Vivendi• Time-Warner-CNN-AOL• Disney-ABC-ESPN• Comcast (biggest cable company)• NY Times-Boston Globe, 22 newspapers, 8

TV stations, and 3 golf magazines


Public Reaction (Outrage)• Over one million comments to the FCC and

Congress (largest response ever on any issue)• Multiple organizations opposed (loudly)

– Consumer groups, labor unions, civil rights groups, NRA, Parents TV Council, etc.

• Flawed “diversity index”– Multicultural Radio Corp. comes out ahead of the

NY Times as a “meaningful source” of news– Ignores audience size

• FCC acted with little or no prior public input


The Courts and Politics

• Federal Appeals Court in Philadelphia issued a blocking order– Denied the FCC’s request to move to DC Court

• US Senate blocked implementation

• Final compromise was for 39% maximum TV coverage– “Protected” Fox and CBS current reach


Re-write of TA 96 ?• Start in the House Subcommittee on

Telecommunications and the Internet– Met on 4 February 2004– Expect “many” hearings on policy reform this

year

• USTA President and other industry leaders testified

• Expect results in 2006-2010 timeframe


House Energy and Commerce Committee

• Billy Tauzin resigned as chairman – 16 Feb 04 – Entering the “revolving door” at end of term

• Replaced by Joe Barton (R. Tex)– Former petroleum engineer– Friendly to Bells, but not passionate (like Tauzin

has been)– Thinks UNE-P (unbundled switching) is unfair to

ILECs– VoIP is a major issue


States’ Responsibilities• States viewed as more favorable venue for

keeping the status quo (per NARUC)– Best chance of keeping unbundled switching– Establish collocation rules and rates

• “Impairment” decision left to each state– 51 jurisdictions, 12 Federal Courts– Not “impaired” if 3 CLEC switches or 2

wholesalers are in the market (none at this time)

• CLECs “buying” rather than “building”– Moving existing lines from their own switches


“Economic Impairment”

• Possible sources of impairment – Purchase and installation cost of a switch– Collocation cost– Operations Support Systems (OSS)– Signaling and other services and equipment– Backhauling traffic– Cost of customer transfer– Etc. etc., etc. (Per Chairman Powell)


Conclusions

• It could take 4 years to work through state unbundling and collocation issues

• Expect the third (and maybe fourth) remand of the Triennial Review by Circuit courts or the US Supreme Court

• VoIP may moot many issues before the FCC can even act

Global Telecommunications Regulation TCOM 5173

Documents

fcc orderswashington

unconstitutional fcc

telecommunications act

market entrymodify regulations

enterprise market ds1

copper loops

us supreme courtc

line sharing order