FCC Puts Smack Down on Forbearance Gamesmanship

It’s a new day at the FCC. Julius Genachowski has taken his place as chairman, Michael Copps has returned to his commissioner’s seat and Jonathan Adelstein has departed to head the Rural Utilities Service.

Genachowski received full Senate confirmation last week and, on Monday, announced his new staff. That same day, then-Acting Chairman Michael Copps made good on one lingering promise: He issued an order that revises – and, for incumbents, essentially upends – the controversial forbearance process.

CLECs and other competitors were, of course, ecstatic about the order. Take, for example, this statement from Kelsi Reeves, vice president of federal government relations at tw telecom inc. (TWTC): “This is truly a sign that we have a new regulatory environment in Washington that is becoming more and more focused on the consumer and less tolerant of big companies looking out for their bottom lines.”

So what does the order change, exactly? Several things. First, no more submitting a forbearance petition and then revising it over the course of 12 months.

That’s a biggie. Large telcos have made a point to request some relief and then alter their petitions to include more waiver requests, often at the last minute, so competitors don’t have time to comment. Such moves also upset FCC staff, who spend months analyzing the data. Now, all petitions must be “complete as filed,” the FCC said.

In addition, a company no longer may withdraw its request “at the end of the process if it doesn’t look like it is going to get its way,” Copps said in a prepared statement. Qwest Communications International Inc. (Q) and Verizon Communications Inc. (VZ) both have done just that – Verizon most recently in May.

Still, there’s one omission in the order. Competitors might have hoped to see the FCC strike the much-despised “deemed granted” clause – the one that in March 2006 gave Verizon widespread regulatory relief, relief about which no one except Verizon knows the details because an order was never issued. But the problem is one only Congress can tackle. The “deemed granted” provision was included in the 1996 Telecom Act, so any reform is a matter of “I brought you into this world and I can take you out of it.”

On the whole, Copps said he doesn’t expect the forbearance process to disappear. However, he noted, the new rules should “inject some rationality into the process and greatly reduce the procedural gamesmanship that we’ve too often seen in the forbearance proceedings of the past.”

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