Forbearance and the Battle Over U.S. Broadband Access

XO CEO Offers His Perspective

On July 25, the FCC delivered a huge victory for customers and competition, voting 5-0 against Qwest’s petitions for regulatory forbearance from wholesale pricing rules on last-mile facilities in its four largest markets.

Customers in Denver, Minneapolis, Phoenix and Seattle now can continue to exercise the right to choose their telecom service provider. Competitors’ right to access local loop and transport facilities at cost-based rates has been preserved in all four markets.

But don’t break out the champagne just yet. Forbearance and its ugly twin — Bell copper retirement initiatives — will continue to pose a threat until policymakers take action once and for all to end incumbents’ efforts to shut down competitive broadband services that, by legal right, reach the last few feet to customers over ILEC legacy networks.

Make no mistake: This is not just an industry insiders’ squabble over arcane regulatory matters, but a battle for the future of broadband access in the United States, arguably the predominant issue of 21st century telecommunications.

The Battle for America’s Broadband Future

The crux of the argument is whether broadband access will be customer-driven or carrier-mandated. Competitors believe businesses and consumers should have choices and options, and the ability to select their broadband provider based on their needs. By their actions, the Bells reflect the view that customers should have only what a carrier wants them to have.

Lawmakers have taken the side of customers. In the 1996 Telecom Act, Congress mandated that the ILECs provide competitors with cost-based wholesale rates for last-mile access, viewing the legacy network as a national asset — paid for many times over by ratepayers — that would help fuel choice, innovation and savings for consumers.

Competitors have moved ahead to invest billions of dollars in broadband deployment. We have led the market in innovations ranging from the first commercial DSL services to today’s Ethernet-over-Copper, and 10gbps wavelengths. Yet at every turn we have been confronted by ILEC efforts to eliminate access to competitively priced last-mile facilities that are essential to our ability to deliver broadband.

The Copper Cartel

Often the easiest way for an ILEC to deny access is simply to eliminate copper loops. As the ILECs deploy fiber, they yank copper out of the customer’s home or office, acting like a cartel that controls the supply.

The ILECs justify this “copper retirement” by arguing the superiority of fiber. In fact, advancements in electronics have elevated copper far beyond traditional voice and dial-up to become a major bandwidth vehicle, with speeds soon expected to reach 100mbps.

Considering the ubiquity of copper facilities, the potential impact of copper retirement is profound. ILEC loop facilities reach more than 100 million U.S. households. In the vast majority of cases, ILEC copper loops are the only route into commercial buildings.

Forbearance: An ILEC Game Without Rules

But why settle for merely cutting copper when you can price last-mile access out of reach of competitors in entire markets? Such is the ill-concealed motivation behind ILEC UNE forbearance petitions. The absence of procedural requirements governing the forbearance “process” creates an all-too-tempting prospect for the Bells to pass up.

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