CLECs, ILEC take opposing positions on D.C. appeals court ruling

To the surprise of virtually no one, CLEC community representatives and RBOC officials disagreed on a number of implications regarding Tuesday’s decision by the U.S. Court of Appeals for the District of Columbia Circuit to eliminate most rules regarding unbundled network elements.

If a stay of the ruling is not granted, it will become effective in 60 days. One of the few points of agreement between the competitive carriers and incumbents on the issue is that the millions of customers who depend on UNE-based CLECs for service will not be cut off in early May. Most CLECs have existing interconnection agreements with incumbents, although "change of law" provisions could result in renegotiations.

"There’s no way the FCC, the Congress or the administration…are going to cut off 19 million [CLEC] lines," said Comptel/Ascent Alliance CEO Russell Frisby during a Wednesday press conference. "It’s not going to happen—legally or practically."

Tom Tauke, Verizon Communications’ senior vice president of public policy and external affairs, agreed during a Thursday press conference, saying "no one’s going to fall off a cliff" on the 61st day. However, if negotiations are needed, Frisby’s assertion that TELRIC pricing represents a "just and reasonable" rate is misguided, according to Tauke.

"Clearly, as that point, there is a pricing issue," Tauke said. "It’s not going to be TELRIC anymore; it’s going to be just and reasonable."

CLEC officials hope the Supreme Court will grant a stay and overturn the appeals court decision, thereby avoiding the need for such negotiations. If the court ruling takes effect, Frisby said he expects RBOCs will seek an increase in wholesale rates quickly.

"We’re working hard to make sure Americans don’t get a $15 billion phone bill," Frisby said.

But Tauke said CLEC customers likely will not see increased phone bills, because market pressures from ILECs, wireless operators and cable companies mean CLECs can’t raise rates drastically without risking a loss of market share. Specifically, Tauke noted that AT&T offers its bundles at the same rate in different states, despite the fact that the line charge can vary by as much as $8-$10 per month.

Each group also expressed significantly different opinions on the role of state commissions. David Carpenter, a partner in the law firm of Sidley & Austin and counsel for AT&T, said state commissions are required to act in accordance with FCC regulations, where they exist. However, with the appeals court vacating most of the FCC’s UNE rules, states no longer would be bound by federal restraints.

"One of the ironies of the decision is that, on matters where the FCC doesn’t have rules, the states have discretion to address them as they see fit," Carpenter said.

Michael Glover, Verizon Communications’ senior vice president and deputy general counsel, dismissed that notion summarily, saying, "That’s not right." In fact, Tauke said Verizon has encouraged state commissions to halt their triennial review proceedings until it is clear the results of the labor-intensive effort will not be discarded.