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Regulatory News – National UNEs List Still Critical, TRA Says

Posted: 07/1999

Regulatory News

National UNEs List Still Critical, TRA Says
By Kim Sunderland

A minimum list of unbundled network elements (UNEs) that incumbent local exchange
carriers (ILECs) must offer to competitors should be maintained, according to the
Telecommunications Resellers Association (TRA), Washington.

In comments filed this week with the Federal Communications Commission (FCC), TRA says
that without nationwide access to at least the FCC’s original list of seven UNEs, it will
be very difficult for new competitors, especially smaller ones, to win market share from
the ILECs.

"The FCC was right … when it first identified the seven network elements that an
incumbent LEC must unbundle and offer new rivals if true local phone competition is to
become a reality," TRA President Ernest B. Kelly III says. "Using [our]
information, and data from other members of the competitive community, the commission
should have no trouble justifying the continued inclusion of these elements on the list
and perhaps even one or two additional elements."

TRA’s comments are in response to FCC requests on creating a new UNEs list that ILECs
must make available to competitors (Common Carrier Docket No. 96-98). The U.S. Supreme
Court’s January ruling in AT&T Corp. et al v. Iowa Utilities Board et al,
charged the FCC with redoing its list of UNEs. At issue here is Rule 319, the FCC’s
primary unbundling rule that sets forth a minimum number of network elements that ILECs
must make available to requesting carriers. The Supreme Court vacated and remanded Rule
319, calling it inconsistent with the Telecommunications Act of 1996 because the FCC
didn’t fully consider all factors "when it gave requesting carriers blanket access to
network elements." The High Court said the FCC didn’t sufficiently justify these
elements, and that the commission now must demonstrate that a lack of access to such UNEs
would weaken the ability of the ILECs to compete. An order on this issue is expected this
summer.

According to TRA’s comments, which included a report by the Competitive Communications
Group (CCG) of College Park, Md., serious problems could occur if one of the original UNEs
is removed from the list. With respect to switching, for example, the CCG report found
that:

* A competitive local exchange carrier (CLEC) must have at least 10,000 subscribers to
justify purchasing, rather than leasing, switching facilities. In many markets,
particularly smaller markets, Kelly says it would be a tremendous challenge for a
competitor to build a customer base of that size.

* The existence of multiple competitors in a particular market doesn’t indicate that a
certain element is available from a source other than the ILEC. The report surveyed 20
CLECs in lower Manhattan and found that none planned to offer switching services to other
CLECs in the future.

* Securing an element such as switching from a source other than the ILEC raises cost
issues, since the element must be interchangeable with an ILEC’s network. Kelly says this
issue becomes even more costly for CLECs operating in multiple markets.

In other comments filed, several states urged the FCC to add such elements as dark
fiber and subloops to the list. And the Public Utilities Commission of Ohio (PUCO) said it
"endorses the approach that the FCC should establish a flexible set of UNEs, allowing
states to add or subtract a particular UNE in a particular market given certain
conditions.

Likewise, the Illinois Commerce Commission (ICC) said in its comments that the FCC
should identify a minimum set of UNEs that must be unbundled on a nationwide basis, but
the states should have the flexibility to add elements to that minimum list. And there
should not be a sunset date, the ICC says.

California suggested that switching be specified as a UNE, as should operations support
systems (OSSs), extended link capability and directory listing.

"We hope the commission acts swiftly to settle the UNE issue," Kelly says,
"in a manner consistent with its earlier decision so our member companies can move
forward with their business plans and consumers can begin to see real choice in the local
phone market."


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