Changes in TRO expected after court hears arguments

Stipulations in the FCC’s triennial review order granting additional authority to states commissions likely will be changed, most court observers concluded after witnessing the oral arguments in the appeal of the TRO before the appeals court in Washington, D.C.

Reports indicate the three-judge panel indicated the FCC’s decision to let states determine whether competitive carriers would be "impaired" from competing without certain unbundled network elements was inappropriate.

Of course, the FCC delegated this authority to the states primarily to meet this same court’s guidelines for greater "granularity" in determining UNE impairment. Unless the FCC dramatically increases its staff, most industry experts do not believe the agency is capable of conducting such reviews on its own.

"The D.C. Appeals Court cannot have it both ways," said Dr. Mark Cooper, research director of the Consumer Federation of America, in a prepared statement. "If the D.C. Appeals Court wants granular analysis of the state of competition, it will have to allow the FCC to rely on the states."

States may be in a better position to determine impairment, but the Telecommunications Act of 1996 does not grant the states such authority, according to Rick Brecher, a CLEC attorney and partner in the Washington, D.C., law firm of Greenberg Traurig.

"It may be sound policy and a good idea, but is that what the statute requires?" Brecher said. While there appears to be little doubt that states will not have the authority established in the TRO, whether the court remands the case back to the FCC or establishes new guidelines in a ruling remains in doubt, according to Blair Levin, Legg Mason’s managing director for regulatory strategy.

"In short, it was a good day for the Bells and a bad one for the IXCs and many CLECs, but the question of a remedy and timing remains a key variable," Levin said in an analyst report.

Although half the oral argument was supposed to be spent on the broadband portion of the TRO, most accounts indicate there was little discussion of the issues. However, competitive carriers were encouraged by one judge’s acknowledgement of a "disconnect" in the order, according to Jonathan Askin, general counsel for the Association for Local Telecommuncations Services.

"While the states have been delegated at least some authority to deal with most network elements, the FCC chose to pre-empt the states’ authority over broadband-capable loops," Askin said. "The panel seemed to recognize that loops are the single network element that require the most ‘granular,’ route-by-route, analysis to determine when and where competitors should or could be deploying their own loops or where competitive supply exists."

Meanwhile, state commission staffs throughout the U.S. are working hurriedly to conduct TRO proceedings that are supposed to be completed this summer. Much of this work may go for naught, Levin said.

"I think it will be in time so that the current state proceedings will be delayed indefinitely," Levin said.

If the appeals court makes its decision as quickly as it hears oral arguments in the case, most industry officials believe a ruling will be announced in the spring.