FCC Rejects Controversial Verizon Forbearance Petition

The FCC late Tuesday afternoon voted 5-0 to reject Verizon Communications Inc.s forbearance petition for deregulation in six of its northeast markets. If the request had been granted, Verizon would have been able to charge competitors higher prices to access its networks.

Congressman Ed Markey, D-Mass., announced the rejection. Markey heads the House telecommunications subcommittee and one industry insider, speaking on background, said its likely the FCC tipped off Markey to the vote so he could get the press. Markey has been very vocal about his opposition to Verizons request and has been holding the commissions feet to the fire, said the source.

By nearly 7 p.m. Eastern time, FCC commissioners had yet to release their comments explaining their votes.

Verizon last year filed for regulatory relief in the Boston, New York, Philadelphia, Pittsburgh, Providence, R.I., and Virginia Beach, Va., metropolitan statistical areas (MSAs). The request was based on relief Qwest Communications International Inc. won in Omaha, Neb., two years ago. Verizon followed Qwests lead in claiming that it faced intense competition from cable, VoIP, CLEC and other providers, enough competition to merit forbearance from certain rules. The carrier stuck to that view in its prepared statement on Tuesday.

Any reasonable assessment of these market areas would conclude that they are fully competitive, said Tom Tauke, Verizons executive vice president for public affairs, policy and communications. If the FCC had approved these petitions, it would have permitted Verizon to provide network facilities at commercial rates. Instead, the commission missed an opportunity to promote and encourage facilities-based competition by continuing to require one of the network providers in these markets to sell unbundled facilities at government-mandated, subsidized prices.

XO Communications and Sprint Nextel were among the first competitors to praise the FCCs vote.

This action helps ensure that competition will continue to thrive, and that markets where Verizon sought forbearance will not fall under the unchallenged rule of the single provider, said Heather Gold, senior vice president of external affairs of XO.

In this proceeding, Verizon sought a regulatory escape hatch to avoid laws which were designed to promote competition in the marketplace, said Sprint spokesman John Taylor. By rejecting Verizons request, the FCC stood up for consumers and for competition.

Qwest Communications International Inc.
Verizon Communications Inc.


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