STATE BROADBAND PARITY BILLS TROUBLE CLECs

Competitive carriers are growing more concerned that broadband parity legislation being introduced in various states could ultimately prevent them from leasing underlying facilities from incumbent carriers.

Last week, the public utility subcommittee of the South Carolina General Assembly met to discuss a bill advanced by BellSouth. The bill would deregulate all broadband services capable of transmitting information at rates exceeding 144 kb/s in at least one direction, or services that combine wire routing and transmission to allow users to access the Internet.

According to John Ivanuska, vice president of carrier relations for competitive carrier Birch Telecom, the bill's language is so vague that it could be applied to wholesale services that competitive carriers purchase from incumbents.

“It not only would effectively deregulate the underlying broadband infrastructure, including dial-up Internet over copper pairs, but voice as well,” Ivanuska said. “This is tremendously troubling.”

A similar bill was enacted recently in Oklahoma, and comparable bills are pending in Kansas, Missouri and Kentucky, according to state sources. Though nothing similar has been filed yet in Texas, Mark Stachiw, vice president and general counsel for Allegiance Telecom Company Worldwide, said it is only a matter of time. Stachiw is most wary of the 144 kb/s benchmark that has been used to define broadband services.

“We use T-1s to provide integrated access services to small enterprises,” Stachiw said. “We're very concerned that these state bills could hurt our ability to offer these services because we wouldn't be able to get [unbundled network element] T-1s.”

Ivanuska suggested the Bell companies are pushing the state bills because similar legislation at the federal level has stagnated and they are concerned that the FCC won't grant the relief they seek from the broadband intermodal parity proceeding. “This is a belt-and-suspenders tactic. The Bells are hedging their bets,” Ivanuska said.

Jake Jennings, vice president of regulatory affairs for NewSouth Communications, partially agreed. He said the Bell companies are seeking to keep the states out of the broadband picture altogether. “They're concerned that the states could go beyond whatever the feds would require,” Jennings said.

Jennings' assessment is dead-on, said Gregg Morton, vice president of governmental affairs for BellSouth. “It's important to note that broadband is not regulated by the South Carolina public utility commission today. All this bill does is codify that,” Morton said. “Just because the PUC hasn't asserted itself today doesn't mean it won't tomorrow.”

BellSouth has no insidious ulterior motive and is pushing the bill simply to achieve some measure of regulatory certainty for its investors, Morton said. There is concern, however, that pending federal laws and potential FCC policy shifts could result in federal regulations that address only certain broadband issues, while others are left to the states.

Should the state commissions attempt to regulate broadband, particularly in a manner that conflicts with federal policy, Morton said it would result in a “court fight that would take years.”

However, Morton also said the bills could not be used to deny CLECs underlying facilities because it clearly indicates that it would affect only broadband services.

“There's an effort right now to try to turn this into something it's not,” he said. “There's no hidden agenda here. BellSouth isn't trying to change its obligations under the Telecom Act.”