The FCC late Friday denied a controversial Qwest Communications International Inc. forbearance petition that would have removed dominant carrier and UNE pricing regulations in four major markets.
Commissioners rejected Qwest’s plea just shy of the midnight deadline, narrowly avoiding automatic approval as happened with Verizon two years ago.
Qwest wanted relief – mirroring what it received in Omaha, Neb., in 2005 – from network sharing and other obligations in Denver, Phoenix, Minneapolis/St. Paul and Seattle. But commissioners didn’t buy the argument that the RBOC faces so much competition in those regions that it needs freedom from certain government regulations. Chairman Kevin Martin said he thinks “significant competition” exists in Phoenix but that there wasn’t sufficient evidence overall to merit forbearance.
However, he added in a prepared statement, “As competition in these markets continues to develop, I am happy to reevaluate these markets based on updated market facts.”
Democratic commissioners Michael Copps and Jonathan Adelstein also voted against the petition; it was not immediately known how Republican commissioners Deborah Tate and Robert McDowell voted, although rumors circulated earlier this week that all five members were set to deny Qwest’s request.
The Qwest denial comes just months after the FCC turned down a similar petition by Verizon Communications Inc. CLECs have fought hard against each petition but ramped up opposition against this latest in a line of Bell requests for release from network sharing rules. XO Communications spearheaded much of the resistance, mobilizing about 30 of its peers to lobby for denial. Qwest’s evidence and arguments for forbearance were “premature,” said Heather Burnett Gold, senior vice president of external affairs for XO in a press release.
“[T]oday's FCC action sends a strong message to Qwest and all Baby Bells that attempt to end-run the Telecommunications Act,” she noted.
CLECs including Integra Telecom and tw telecom also praised the FCC’s decision. Reaction from Qwest was not immediately available, nor was it clear whether the carrier plans to try again for forbearance in the four markets in which it was denied.
Meanwhile, the FCC’s rejection buys competitive providers some time. Pressure from Congress and the industry prompted the FCC late last year to issue a notice of proposed rulemaking to examine the purpose and use of forbearance petitions.
Congress included forbearance in the 1996 Telecom Act as a way for companies to get out from under onerous rules if they indeed were at a competitive disadvantage. Many in the competitive industry claim that the Bells are abusing the forbearance provision, while the RBOCs say they face intense pressure from CLECs and wireless, VoIP and cable providers.
On the whole, Friday proved a busy day for FCC commissioners. They approved the long-awaited XM-Sirius merger and opted to “punish” cableco Comcast for slowing BitTorrent traffic.
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