One Last Chance for FCC to Redeem Itself

I’ve been giving a lot of thought to the FCC’s upcoming decision on Qwest’s latest unbundling forbearance petition. In fact, I had a whole other blog written until I scrapped it in favor of saying what I really, really think about the issue.

I think forbearance is a copout. I think most phone companies use it to wipe out competitors in such a way that they can appear innocent. Can’t you just picture them batting their big baby blues and simpering that it’s not their fault a CLEC had to leave the market? Look at the overexposed example of Omaha, Neb. Qwest snagged forbearance relief there in 2005 and McLeodUSA has had to pull out of the region because it can’t afford Qwest’s UNE prices. I don’t call that competition – I call that bullying.

But there might be hope. Rumor has it – on good authority – that FCC Chairman Kevin Martin is circulating a draft order to deny Qwest’s 4-MSA (Denver, Phoenix, Minneapolis/St. Paul, Seattle) request in full. This would mark the second time since the terrible Verizon “deemed granted” incident that Martin has gotten it right. The other one was the unanimous denial of Verizon’s 6-MSA petition for relief from unbundling rules. Qwest’s petition models Verizon’s failed request, which to me says there’s a precedent for rejection.

Almost no one has come out in favor of Qwest except Qwest itself and the few state officials it’s been able to sway. One public figure – Arizona Corporation Commissioner Kris Mayes – has remained admirably steadfast in her opposition to Qwest’s plea. And she recently brought up a great point in an Arizona Republic article: "If Qwest believes they are selling below market cost, the remedy is to come to the commission and ask for a rate increase, not obliterate their competition," Mayes told the newspaper last month. "It is kind of telling that they have not (come to the commission)."

Bingo! I hadn’t looked at it that way, but Mayes is absolutely right. If the Bells and LECs weren’t trying to undermine competitive principles, they’d have no problem asking public utilities commissions for price hikes. That’s what every other utility does, after all. But the use of the ’96 Telecom Act’s forbearance clause lends credence to the theory that the large, entrenched carriers rely on that provision to rewrite the law in their favor.

The FCC decision is due by next week – July 26. That’s a Saturday, so we should expect a ruling any time. At any rate, my hope is that Martin and his fellow commissioners go two for two. I don’t want to get too crazy, but that would restore a little faith in an FCC that – despite the two Democrats – has been riddled with cronyism and secrecy.

P.S. Lest we think Qwest’s forbearance plea is the last we’ll see, keep in mind that Verizon has two petitions pending for Virginia Beach, Va., and Rhode Island. Whether Martin will address those requests before a new administration comes into office is unknown.

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