Trade Group Claims Court Ruling Will Cost Businesses Billions

CompTel/ASCENT and NuVox Communications on Tuesday released a study claiming the demise of federal rules will cost small and medium businesses about $4.9 billion annually if the FCC does not preserve affordable wholesale access to parts of the local phone network controlled by BellSouth, Qwest, SBC and Verizon.

A federal appeals court has rejected FCC rules that allow numerous telecommunications providers to offer businesses a combination of voice and data services over one system by leasing network components known as unbundled loops and transport elements from the four regional Bells at discounted, government-mandated rates.

The carriers provide approximately 467,000 so-called DS-1 lines to businesses by leasing the network components from the Bells, CompTel/ASCENT and NuVox said in a joint press release. A business can receive 24 voice-grade channels, or a combination of voice and data connections at a transmission rate of 1.544 megabits per second, over a DS-1.

Without access to the DS1 lines and transport at the rates in question, telecom providers will be forced to buy a “special access” service from BellSouth, Qwest, SBC and Verizon at substantially higher rates, CompTel/ASCENT and NuVox said. The study by MiCRA, a Washington D.C. economic consulting firm, cautioned many providers would be forced to raise their prices and exit markets.

SBC spokesman Dave Pacholczyk calls the study “a series of guesses pulled out of thin air. We can't respond to the "what if's" here, but we can offer some facts,” he says. “SBC's wholesale customers will have the same access to our network tomorrow that they have today. The sky hasn't fallen and no one is taking anything away.”

Pacholczyk also says SBC remains willing to enter commercial agreements with its competitors to lease parts of the local phone network.

“That's the best way to provide added certainty for our competitors' businesses,” he says.

FCC Chairman Michael Powell has pledged to adopt interim regulations after Solicitor General Theodore Olson declined to ask the Supreme Court to review the rules in dispute. Supreme Court Chief Justice William Rehnquist also has denied requests to keep the contested rules on the books pending a request for an appeal.

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