Verizon High-Speed Services Deregulated

[David Farber <dave () farber net>]

Begin forwarded message:

From: Brett Glass <brett () lariat org>
Date: March 21, 2006 12:42:57 PM EST
To: dave () farber net, Ip ip <ip () v2 listbox com>
Subject: Verizon deregulated; cable/ILEC duopoly likely to follow

Dave:

This is a truly momentous event -- one that will likely be  
devastating to competition, consumer choice, and network neutrality.  
A few years ago I mentioned, in a conversation with then-Governor Jim  
Geringer of Wyoming, that I feared the dawning of a "new Gilded Age."  
I believe that with this decision (or, rather, a non-decision by  
default), that age is upon us. Among other things, the FCC's inaction  
will allow Verizon to refuse to interconnect with other carriers. So  
much for CLECs in Verizon territory -- and you can be sure that SBC/ 
AT&T/Wal-Mart (What.... You mean they haven't merged with
Wal-Mart yet? Only a matter of time) and Qworst will follow suit.  
We're about to see a big push toward an ILEC/cable duopoly and the  
end of network neutrality. I've included an excerpt from a Washington  
Post article, followed by the complete comments of FCC Commissioner  
Michael Copps (which, as a public statement by a government official,  
can be reproduced in full on your list without any protests about  
copyright issues). Mandatory reading, IMHO, for anyone concerned with  
the future of telecommunications and/or the Internet.

--Brett Glass

---------------

Verizon High-Speed Services Deregulated
FCC Democrats Decry Lack of Vote

By Arshad Mohammed
Washington Post Staff Writer
Tuesday, March 21, 2006; D05

The Federal Communications Commission yesterday deregulated a host of  
high-speed data services that Verizon Communications Inc. offers to  
business customers, a move critics said could sweep away decades of  
rules governing the company's pricing and practices.

The agency exempted Verizon from having to file proposed prices with  
the government and lifted the requirement that it provide competitors  
access to its high-speed business lines. FCC Chairman Kevin J. Martin  
said freeing Verizon of many "common carrier" obligations on those  
lines will give the company "the flexibility to further deploy its  
broadband services and fiber facilities without overly burdensome  
regulations."

Critics, however, said the FCC went too far. Among other things,  
telecom lawyers said the decision will allow Verizon to charge  
businesses what it wants for such lines. While large companies are  
likely to bargain effectively, smaller companies may see their costs  
rise.

The outcome reflected deep divisions on the commission, with  
Republicans Martin and Deborah Taylor Tate saying they favored giving  
Verizon what it wanted to accelerate the deployment of high-speed  
broadband services and Democrats Michael J. Copps and Jonathan S.  
Adelstein vehemently opposing it.

The FCC, which is split evenly between the two Republicans and two  
Democrats, did not vote to ease the rules on Verizon but rather  
exempted it under a statute that allows a company's request to be  
approved unless the agency denies it within a set period. That period  
expired Sunday, allowing the request to go through automatically -- a  
rare event at the FCC.

More at

http://www.washingtonpost.com/wp-dyn/content/article/2006/03/20/ 
AR2006032001527_pf.html

----------------

STATEMENT OF
COMMISSIONER MICHAEL J. COPPS
IN RESPONSE TO COMMISSION INACTION ON
VERIZON'S FORBEARANCE PETITION

Re:       Petition of Verizon Telephone Companies for Forbearance  
under 47 U.S.C.
§ 160(c) from Title II and Computer Inquiry Rules with Respect to their
Broadband Service, WC Docket No. 04-440 (March 20, 2006)

I am deeply disappointed at the outcome of this proceeding.  This is  
not the way to make environment-altering policy changes.

We all understand that technology has changed in ways that required  
this Commission to think anew and act anew in recent years.  I have  
tried to participate constructively in our proceedings, dialogues and  
votes, even when the outcomes went beyond where I thought it wise for  
us to go.  In those proceedings, generally, we started rulemaking  
proceedings, compiled a record, sifted through data and then crafted  
rules in an orderly fashion.  It would have been far better to deny  
this petition and begin such a proceeding here.  The Commission fails  
to take that course.  Instead, this sweeping outcome is unaccompanied  
by any regulatory footsteps.  Here we permit a forbearance petition  
go into effect that erases decades of communications policy in a  
single stroke.  In effect, we provide industry the pen and give it  
the go-ahead to rewrite the law.  Congress instructed this agency to  
implement the law; it did not tell us to delegate far-reaching policy  
changes to the companies that fall under our jurisdiction.  It is end  
users, particularly small business consumers, who will suffer the  
consequences.

As a legal matter this approach is suspect.  There is no appealable  
Order.  There is no document, no stitch of analysis, no trace of  
discussion, nothing that a court can use to gauge where the  
Commission is coming from.  And by failing to act through a normal  
proceeding, the Commission jeopardizes many Congressional policies  
that are at the core of its statutory duties.  I find no basis to  
support an approach that puts so much at risk:

·      Homeland Security:  By failing to act, national and local law  
enforcement agencies charged with protecting the American people  
could find that key networks are no longer subject to the  
Communications Assistance for Law Enforcement Act (CALEA).  At a time  
when all aspects of our security demand heightened attention, this is  
an area where the Commission should proceed with extreme caution.   
Anything else is a distinct disservice to those whose duty it is to  
protect us from harm.

·      Universal Service:  By failing to act, the contribution base  
for universal service could be put in jeopardy.  Rural America relies  
on the universal service fund to ensure they have telecommunications  
on a par with the rest of the country.  Without it, too many places  
would not have phone service, much less the possibility of  
broadband.  By pulling a whole swath of services out of the  
obligation to contribute, universal service could be on newly shaky  
ground.  This will only enhance the urban and rural divide in  
communications, at a time when the Commission should be doing  
everything in its power to bridge the gap.

·      Privacy:  By failing to act, customers will no longer enjoy  
the privacy that Congress sought to give them under the  
Communications Act.  That means hospitals, banks and other  
organizations that handle sensitive and life-threatening information  
are not given the assured protections of Section 222.  In a day and  
age where identity theft is common and private cell phone records are  
bought and sold over the Internet, dumping the Commission's privacy  
protections is downright dangerous.

·      Disability Access:  By failing to act, the Commission could  
undermine the access for millions of Americans with disabilities that  
Congress required in Section 255.  We have come too far in improving  
access for the disability community in this country to turn back the  
clock now.

·      Rate Increases:  By failing to act, the Commission flashes a  
green light for rate increases without any regulatory oversight.   
Services like special access are the backbone of business  
communications in this country.  But customers could see special  
access rates skyrocket and competitors who rely on this input  
squeezed out of the enterprise market.  This will raise the cost of  
doing business in this country for businesses both large and small.

·      Interconnection in Rural America:  By failing to act,  
interconnection in rural America may be needlessly endangered.  Rural  
carriers tell us that where Verizon's access services to the IP  
backbone are the only option in remote areas, rural carriers will be  
subject to unchecked market power.  This could mean higher rates for  
rural consumers whenever they want to interconnect with the rest of  
the country and the rest of the world.

·        Interconnection between Technologies:  By failing to act,  
the Commission relieves Verizon of any duty to interconnect with any  
other carrier.  Discriminatory rates, terms and conditions for  
interconnection can now become the norm.  Prices to interconnect can  
be set at rates designed to squeeze out competition from inter-modal  
providers.  This could raise costs for unaffiliated wireless and  
cable providers.  In the end, consumers will bear the burden of this  
mess with higher rates.

·        Enforcement Actions for Unlawful Behavior:  By failing to  
act, aggrieved parties lose their right to seek enforcement action  
against Verizon in front of the Commission.  Carriers, individuals,  
municipal organizations and state commissions will be stripped of  
their Section 208 right to complain to the FCC about any  
discriminatory or unlawful practices Verizon may engage in.  They  
will be told to take their grievances elsewhere, because the FCC has  
closed up shop on hearing public complaints.

There are other vitally important issues that may suffer from the  
impact of our failure to act.  Longstanding policies­from pricing  
flexibility standards to accounting rules to notice required for  
service withdrawal may all be in play now.  No doubt in the days and  
weeks ahead this Commission will be compelled to seek promises from  
the petitioner and issue follow-on Orders in a reactionary attempt to  
clean up the wreck.  Such are the costs of this abdication of our  
responsibilities.  It is unfortunate that consumers are the ones who  
will pay the price.


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