FCC hits SBC with $6 million fine

The FCC has fined SBC Communications $6 million for a violation of the shared transport condition imposed by the commission when it approved SBC’s merger with Ameritech in 1999.

Per the agreement, SBC is required to make the shared transport unbundled network available element available to competitors in the Ameritech territory – Illinois, Ohio, Michigan, Indiana and Wisconsin – at rates “at least as favorable” as those offered CLECs in Texas, which is part of the carrier’s Southwestern Bell footprint. The commission issued a notice of apparent liability (NAL) concerning the allegation in January 2002.

In its order, the FCC said SBC had “willingly and repeatedly” violated this requirement in each of the five Ameritech states by restricting the use of shared transport by carriers providing intraLATA toll service. In rejecting SBC’s argument against the NAL, the commission determined that the willful violation of “clear requirements” caused delays in the availability of shared transport and forced competitors to unnecessarily expend time and resources to enforce their rights in state proceedings.

FCC Chairman Michael Powell said in a statement that the hefty fine -- the largest in commission history -- is a further demonstration of the commission's resolve to ensure effective enforcement of its policies and rules.

"This action is only one component of the commission's broader enforcement agenda," Powell said. "I will not hesitate to act to ensure that consumers are protected and the public interest is advanced."

SBC Senior Vice President-FCC James Smith expressed disappointment with the order and said in a statement the FCC “mistakenly interpreted” both the letter and spirit of the shared transport merger condition. SBC believes shared transport is solely a mechanism for enabling competitors to provide local service and that obligation does not extend to the provisioning of long-distance service.

Smith reminded that shared transport wasn’t available to competitors in the Ameritech region prior to the merger. “That’s one reason why CLECs today are serving 12 million access lines in our territory,” he said.

A spokeswoman for AT&T said in a statement that the $6 million fine amounts to $1000 per day, per state, “a small price to pay to kill competition and keep a stranglehold on their monopoly profit.” She added that SBC has paid more than $1 billion in fines stemming from merger violations or anti-competitive practices and took a shot at the carrier concerning its recently announced 11,000 employee layoff.

“Think how many employees they would be able to keep on their payroll if they stopped violating the law,” she said.