The Rules - The Future of Unbundled Network Elements

Posted: 06/1999

The Future of Unbundled Network Elements
FCC to Decide All This Summer
By Jonathan E. Canis

Early this year, the Supreme Court established the Federal Communica-tions Commission's (FCC's) broad authority to set national standards for unbundled network elements (UNEs), but found the FCC did not correctly apply the statutory standard in defining what UNEs incumbent local exchange carriers (ILECs) must make available to competitive local exchange carriers (CLECs). The standard requires UNEs only if proprietary UNEs are "necessary" for CLECs, and if a CLEC's ability to provide competitive service would be "impaired" without a UNE. In 1996, the FCC defined seven basic UNEs, finding that virtually any increase in cost or decrease in operating efficiency to the CLEC would meet the "necessary and impair" test. The Supreme Court found this overly broad, however, and ordered the FCC to reconsider its UNE list. In April, the FCC started a proceeding to do this, and hopes to have a final order out by the end of the summer. The following are the hot issues facing the FCC.

Everyone but the ILECs agree that CLECs can't provide service without loops and network interface devices. The debate over loops will be whether the FCC expands the definition to include digital subscriber line (DSL)-capable loops, "dark fiber" loops, synchronous optical network (SONET)-speed loops, etc. If the FCC is serious in its commitment to bring broadband services to residential and business customers, it must require this expanded list of high-capacity loops. After all, what good is a state-of-the-art fiber network if a CLEC must channel its services through a narrowband last-mile connection?

This is going to be the biggest fight for CLECs. ILECs are arguing there are competitive carriers providing backbone and transport facilities, so they shouldn't have to provide this UNE. For CLECs, however, transport, especially when combined with loops, is the most important method for expanding their networks. This is critical for a CLEC's ability to deploy centralized switches for maximum efficiency, and it eliminates the need for a CLEC to mirror an ILECs network architecture. More broadly, how and when ILECs must combine various UNEs will be the most important debate in the FCC's proceeding.

This will be the biggest fight for non-facilities-based carriers. They will argue they must have switching to provide service to a mass market. ILECs will counter there is nothing special about ILEC switching and if another carrier wants to switch, it should buy one of its own.

Many CLECs outsource operator service/directory assistance to competitive providers, and ILECs may have a credible argument as to why they should not be required to provide this as a UNE. Signaling and operations support system (OSS) access are, of course, essential functions, and ILECs must continue to provide them. One flavor of signaling, however--access to advanced intelligent network (AIN) triggers--may be at risk if CLECs don't fight for it.

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