BellSouth, Time Warner Telecom propose new framework for network access

Incumbent BellSouth and competitor Time Warner Telecom today jointly submitted a proposal to the Federal Communications Commission (FCC) that would release incumbents from certain obligations regarding the availability of the unbundled network element platform (UNE-P).

However, the proposal also would require incumbents to adopt a comprehensive set of performance measures that would govern premium transport services.

Specifically, the proposal asks the FCC to sunset the UNE switching requirement for business customers and remove the dedicated transport UNE requirement in locations where the A or Z end office has three or more facilities-based competitors. In addition, the proposal would require CLECs to meet at least one local usage test before they are allowed to convert or purchase special access lines as UNEs.

The counterbalance to this relief is a requirement that would force incumbents to adopt 11 performance standards that would govern special access lines. The standards are similar to those proposed earlier by the Joint Competitive Industry Group (JCIG).

(Special access is defined as any exchange access service that provides a transmission path between two or more points, either directly or through a central office, where bridging or multiplexing functions are performed without using incumbent end office switches.)

BellSouth called the proposed performance standards “challenging” and said they would “ensure a high level of service quality.”

The proposal was made in conjunction with the FCC’s ongoing triennial review of unbundled network elements and was positioned by the two companies as a compromise that would provide both competitive and incumbent carriers with the necessary incentive to once again invest in their networks. It does not address UNE relief for switching provided to residential customers.

“There’s a general agreement that the telecom industry is in trouble,” said Pete Martin, BellSouth’s executive director for federal regulatory. “This proposal is a road map for the FCC to help resolve many of the most pressing issues.”

The two companies acknowledged that their collaboration on this proposal was about as likely as a truce between cats and dogs.

“This is something of a breakthrough,” said Don Shepheard, Time Warner Telecom’s vice president for federal regulatory affairs. “It shows we have an ability to compromise.”

Shepheard added that the agreement took about two months to develop and was aided by the fact both carriers are facilities-based. “Though we come from different ends of the spectrum, we share some common ground.”

According to Martin and Shepheard, the proposal has been floated to “a wide spectrum” of ILECs and CLECs and has received “mixed reviews,” as some competitive carriers want to cling to the unbundled network element platform, while some incumbents had problems with the special access performance measures.

“This doesn’t resolve all the issues … but it represents significant progress,” said Shepheard.

A spokeswoman for Verizon Communications said the proposal, at first glance, “reflects market conditions in BellSouth’s service area,” and added that Verizon is committed to assuring that competitors have proper access to its network, as prescribed by the Telecom Act.

“We believe the wholesale sector is an important part of our future. We just want to make sure that access makes economic and technological sense,” she said.

The initial reaction to the proposal from the CLEC community was icy. AT&T said the proposal, if adopted by the FCC, would ensure high prices for large business customers and no competitive choices for small and medium-sized businesses. “The FCC should give this proposal the short shrift which it deserves,” said an AT&T spokeswoman, in a statement.

Robert McDowell, vice president and assistant general counsel for the Competitive Telecommunications Association, called the proposal “a sweetheart deal” that is “tantamount to a private price-fixing agreement.”

“This self-serving arrangement will benefit two of the largest suppliers of special access services to the detriment of competition,” McDowell said in a statement.

John Windhausen, president of the Association for Local Telecommunications Services (ALTS), said that since Time Warner Telecom does not purchase UNEs, the FCC would be better served by heeding the input of facilities-based CLECs that rely upon UNEs to provide service.

Though he called BellSouth’s willingness to adhere to performance measurements concerning special access services "an important concession," he said ALTS “cannot support any proposal that diminishes the availability of UNEs that are fundamental to the growth of local telecom competition.”

Reporter’s Notebook

The FCC has suspended for five months Verizon’s petition to revise its tariffs in order to force financially troubled wholesale customers to pre-pay or post deposits for future services. The move was not surprising, according to a Verizon spokeswoman, because the commission had taken similar actions concerning similar “assurance of payment” petitions filed by BellSouth and SBC Communications.

AT&T, Sprint, WorldCom, and ATX Communications and other wholesale customers of Verizon filed reply comments urging the FCC to reject the petition. In her order authorizing the suspension of the petition, Tamara Preiss, chief of the pricing policy division of the FCC’s wireline competition bureau, said, “We find that petitioners raise substantial questions regarding the lawfulness of Verizon’s tariff revisions that require further investigation.”

BellSouth today received a staff recommendation from the Florida Public Service Commission (PSC) that it be allowed to provide long-distance service in Florida under Section 271 of the Telecom Act. According to BellSouth, competitors control 1.3 million access lines in the state. The 271 application still must be approved by the PSC before it can be submitted to the FCC.