FCC reluctantly grants SBC partial tariff relief

The FCC has released SBC Communications from tariff obligations related to advanced services provided by its affiliate, Advanced Solutions, Inc., but deferred a decision on whether to declare the carrier non-dominant in that market segment.

Commissioners Michael Copps and Jonathan Adelstein, in a joint statement, said the commission granted relief to avoid having to approve SBC’s petition in its entirety, as required by the Communications Act had the FCC taken no action by December 31, 2002.

The commissioners said SBC had not met the criteria for granting the petition, and they would have preferred a continuation of tariff obligations until the FCC had completed its examination of dominance in the broadband market. But they said the prospect of granting the petition in its entirety would have been “incomprehensible in light of the record before us.”

In a dissenting statement, Commissioner Kevin Martin said the FCC, in its denial of SBC’s non-dominance request, had exhibited a “naked disregard” for the competition provided in the advanced services sector by cable providers. He added that the order is inconsistent with several mandates given to the commission by the D.C. Circuit.

“I fear that … the commission is attempting [with this order] to re-impose its view of a better regulatory relief mechanism for affected companies. As the D.C. Circuit recently admonished the commission, that is not an appropriate avenue,” Martin said.

SBC had filed a petition in October 2001 seeking to be declared non-dominant and to be relieved of its tariff obligations, contending it would be unable to leverage its dominance in the local market to achieve a similar position in advanced services. SBC subsequently filed presentations in November 2002 that it claimed demonstrated adequate safeguards are in place to ensure that the needs of unaffiliated ISPs would continue to be met.

However, the FCC stopped short of declaring SBC non-dominant and relieved ASI of its tariff obligations only for services defined by the SBC/Ameritech merger order. The order does not relieve ASI from any tariff obligations defined by Section 251 of the Communications Act, or those related to special access or other services obtained by unaffiliated carriers.

The SBC/Ameritech merger order requires SBC to provide in-region advanced services – such as frame relay, ATM and wholesale DSL services – only through one or more structurally separate affiliates. It also requires SBC to maintain safeguards to ensure that non-affiliated ISPs have access to the same facilities and services made available to affiliated advanced services providers.

An SBC spokesman called the order a “small step in the right direction,” and said it would make it somewhat easier to respond to unregulated competitors in the broadband and advanced services sectors. “We’re hopeful the FCC will follow the same common-sense logic in establishing full parity between DSL and cable providers,” he said.

According to a spokeswoman for the U.S. Telecom Association, the order fell short of addressing “the realities of today’s telecom industry” by applying the same rules to all broadband providers. However, John Windhausen, president of the Association for Local Telecommunications Services, countered by saying that the order “correctly recognized” SBC’s obligation to provide nondiscriminatory access to the underlying facilities needed to provide advanced services.