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Garbage In, Garbage Out: Whats Wrong with the FCC Forbearance Review

 

 

 

By Peter Radizeski, President of RAD-INFO

The Government Accounting Office (GAO) did a study on competition in Dedicated Access Competition. Unfortunately the data they used was from 2005. Don’t they have computers over there with more current data? Apparently not. This is the same data that the FCC used to grant pricing flexibility in some MSAs.

What is pricing flexibility? It means that the ILEC doesn’t have to stick to a tariffed rate. Formerly, any special pricing had to be an addendum to the tariff  and available to all  or at least those that could find it and can parse a tariff document  to read. Now the ILECs can have promotions and special pricing to compete against CLECs.

This is great for agents of the ILECs, but it isn’t very healthy for the competitive carriers (you know, the COMPTEL crowd). And agents need a healthy competitive market. Without it, many of us will be cut from programs and lose our livelihood.

The GAO surprisingly recommended the “FCC better define effective competition, and consider additional data to measure and monitor competition. FCC disagreed that they need to better define competition and collect additional data. GAO maintains that additional data collection is necessary for FCC to better fulfill its regulatory responsibilities.”

It’s this type of data collection that leads to forbearance being granted. While Dave Rusin, CEO of AFS, may think that forbearance is needed to bring about more fiber deployment, I argue that it would destroy not only the industry but the economy.

When Qwest received forbearance in Omaha, access rates increased 72 percent. Imagine that in YOUR market? CLECs only have about a 5 percent share of lit buildings in any market. TW Telecom and some others are starting to wean off Type II circuits (local loop is from the ILEC) because when the client stops paying, the CLEC is still on the hook for the ILEC portion for the contract term. Type I is all on-net and is the highest margin for the CLEC. (Just ask Dave Rusin at AFS).

No doubt we need more buildings lit with fiber, especially non-duopoly fiber.

How do we go about that? One way would be to change sales tactics and get dense. (This is the strategy of CLECs I consult for).

Until the COMPTEL crowd wakes up to the dense reality (a lesson they should have learned from UNE-P), we have to hope that the GAO can make the FCC use more reliable data  and that the FCC follows its actions in the last round of forbearance petitions and denies them.

Peter Radizeski is president of RAD-INFO. He is a member of the PHONE+/Channel Partners Conference & Expo Advisory Board.


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