December UNE goal appears difficult

As the FCC released its interim rules for unbundled network elements (UNEs) that effectively would maintain the status quo at least into March, Chairman Michael Powell stated he has already placed a vote on permanent UNE rules on the commission's December agenda.

If the FCC adopts permanent UNE rules at before the end of the year, as Powell hopes, the recent mandamus petition filed by Verizon Communications, Qwest Communications and the ILEC-friendly United States Telecom Association will barely register as a blip on the radar screen of any historical review of the UNE saga. But numerous circumstances have converged to make the petition to overturn the interim rules extremely significant for incumbent and competitive carriers.

First, Powell's self-imposed deadlines have had little to do with FCC action, as exemplified in the votes on the interim rules and the 800 MHz order.

Second, even if there is consensus on the FCC, turning an item around in four months has been a tall order for this commission. To act this quickly on an item so hotly contested and so legally challenging--remember, this will be the FCC's fourth attempt to write UNE rules after courts have thrown out all previous efforts--seems unlikely.

Third, the fact that there is a presidential election in November is a complicating factor, because the makeup of the commission could change dramatically. Whether Democratic Commissioner Jonathan Adelstein will be on the FCC for a December vote may well depend on how long Congress stays in a lame-duck session.

Meanwhile, Powell's statement presumes that he will be chairman in December, but there is some historical precedent that the FCC chairman resigns almost immediately after the president who appointed him loses the election. Would Powell resign in November if John Kerry wins the election, leaving the commission at an apparent stalemate on the UNE item?

Telecom attorney Andy Lipman says any perceived precedent of Powell resigning after the election is overstated, noting that the only party change for the FCC chairman in the last 20 years under normal circumstances (i.e., no election questions as there were four years ago in Florida) occurred after Bill Clinton defeated George Bush in 1992. "There's no such thing as 'normal,'" Lipman said.

And that statement's true on many levels in regard to the UNE debate. One thing that is normal is for new FCC members to take some time getting comfortable with hot issues before casting votes on them. As a result, if this FCC does not adopt new UNE rules by the end of the year, it could take a newly constituted commission until at least the second quarter of 2005 to adopt permanent rules.

With this in mind, it's no surprise that the RBOCs filed the mandamus petition to have the interim rules overturned. If the appeals court does not grant the petition, the current UNE pricing regime likely will be in place more than a year after the RBOCs thought the judges had abolished the system.

E-mail me at djackson@primediabusiness.com.