FCC Chairman Michael Powell is drafting a plan that would gradually eliminate requirements that incumbent carriers provide their competitors with wholesale access to their local networks, according to a front-page story from The Wall Street Journal. The new rules would be “the most drastic changes since the Telecommunications Act of 1996” and would be a major victory for the four regional Bell companies. The biggest losers would be AT&T and WorldCom. According to the article, Powell’s current draft plan calls for a two-year transition period before competitors would lose their discounted access to the ILEC switches. The incumbents would also be able to petition state regulators to remove other requirements for access to their networks. The FCC could vote on the plan as early as next month.
http://www.wsj.com
- In November 2002, SBC Communications proposed a policy framework to the FCC to transition the industry “to a sustainable wholesale model�? for local telephone service. Highlights of SBC’s proposal included:
- Establishing a two-year transitional wholesale offering for serving residential customers that is functionally equivalent to the unbundled network element platform (UNE-P) at a nationwide rate of $26 per month, which does not include profit and certain other relevant costs;
- Offering competitors 12 months in which to transition existing residential UNE-P customers to the new rate; and
- Eliminating the UNE-P requirements for business customers, effective upon the FCC’s Triennial Review order date. In addition, SBC proposed a two-year transitional period for competitors to invest in their own facilities. SBC said that based on AT&T’s revenue data it estimates that this proposed plan would deliver solid margins for competitors while enabling local phone companies to recover costs associated with operating and maintaining the telephone networks.
- In its Q3 financial report, SBC said competitors had already obtained more than 4.2 million UNE-P lines from SBC, with more than one-third of those lines being added in Q2 and Q3. Nearly 90% of Q3 UNE-P Line Changes were for consumers. More than 75% of SBC’s UNE-P lines added in Q3 were for the two large IXCs. UNE-P lines provided to WorldCom and AT&T have more than tripled between Q1 and Q3, while UNE-Ps added for others have actually declined.
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UNE-P (Unbundled Network Element – Platform) refers to a combination of unbundled loops, switches and transport elements that are leased by a competitor from an incumbent at a regulated price.