It has been more than a year since the FCC began a proceeding (15-1) to evaluate a Windstream Petition requesting a declaratory ruling stating that an ILEC’s obligation to provide DS1 and DS3 unbundled loops as required by section 251(c)(3) of the 1996 Telecommunications Act is not changed or eliminated by the replacement of copper with fiber facilities or by the conversion from the Time Division Multiplexed (TDM) network to one using Internet protocol (IP). 

Industry comments and reply comments have long been filed. However, the Commission has so far chosen to do nothing.  It is high time for the agency to act. The uncertainty of unbundled DS1 and DS3loop availability continues to be a significant problem for CLECs.  As the Washington Utilities and Transportation Commission (WUTC) recently noted in a letter to the FCC:

Competitive local exchange carriers (CLECs) in Washington State compete directly with ILECs, and the business, non-profit, and government customers CLECs serve are direct beneficiaries of that competition.  According to the latest data available from the Commission, nearly one-half (i.e., 47 percent) of all business class customers in Washington state were served by a non-ILEC provider. To serve these customers, mostly small and medium sized businesses, the [W]UTC understands that CLECs routinely use DSl capacity (1.544 Mbps) and DS3 capacity (45 Mbps) unbundled loops, which the CLECs may use to offer both TDM-based and Ethernet services.  The continued availability of unbundled DS 1 and DS3 capacity loops to competitors is a matter of public interest in Washington, as customers should be able to choose among multiple providers, lower-priced rate plans and service bundles. If an ILEC attempts to discontinue these unbundled loop offerings when it uses fiber or transitions from TDM-based to IP-based services, customers may be thwarted from selecting lower priced alternatives.  In addition, disputes that result from unilateral ILEC conduct disavowing these unbundling obligations will needlessly frustrate customers with higher rates, harm competition, and burden the carriers and state regulators who must address the disputes (WUTC letter to FCC, filed February 11, 2016, at. p. 2).

ILECs, have a different opinion.  They claim their unbundling requirements are for copper TDM-based services only.  As Windstream originally detailed in its Petition:

In its recent notices of intent to retire its copper facilities in certain wire centers, Verizon states that after the retirement it will “no longer be required to offer UNEs or other services over copper facilities,” and confirms only that it “will offer to requesting carriers a 64 kbps voice-grade channel over fiber loops,” with no mention of its continuing obligations to provide access to DS1 and DS3 capacity unbundled loops pursuant to [section] 251(c)(3)... AT&T expressly disclaims any obligation to continue to provide unbundled DS1 and DS3 capacity loops after the IP transition, stating that “any obligation…to provide unbundled access to DS1s and DS3s is limited to those situations where TDM remains in place (Windstream Petition for Declaratory Ruling, filed December 29, 2014, at pp. 10-11)."

Despite these ILEC disavowals of their IP unbundling obligation s, a recent case in Georgia makes clear that AT&T realizes that this technology defense against unbundling DS1 and DS3 loops is nonsense.  In a wholesale rate dispute, AT&T used the definition of a DS1 loop from the 2005 Triennial Review Order in which the FCC originally mandated specific ILEC unbundling requirements to explain that:

[A] DS1 circuit is defined by its speed and capacity, and not by any particular type of equipment…DS1 loops can be provisioned over a variety of transmission technologies, but "[a]t the end of the day ... the particular transport technology does not matter as long as the customer receives a loop with DS1 speed (1.544 Mbps) and capacity for 24 channels (Cbeyond Communications, LLC, v. BellSouth Telecommunications, LLC, d/b/a AT&T Georgia, Georgia Public Service Commission  Docket  No. 24173, Post-Hearing Brief of AT&T Georgia, filed Nov. 4, 2015, at pp. 4-5, 20-21).

AT&T is correct.  As the Commission noted in its Technology Transitions Notice of Proposed Rulemaking in Docket 14-174, “the mere fact that a carrier obtains discontinuance authorization under section 214(a) for [copper] services has no legal bearing on its obligation to provide UNEs [unbundled network elements] (para. 109)."

The WUTC has it exactly right and urges the FCC to act: 

Extensive comments have been filed in this matter, and the issues posed in the Windstream petition are squarely before the Commission and ripe for decision. The [W]UTC is concerned that continued ambiguity over CLEC access to unbundled network elements, potentially exacerbated by technology transitions, may lead to higher prices and less choice for Washington consumers.  Accordingly, the [W]UTC urges the Commission to act promptly on Windstream's petition in order to ensure consumers in our state do not experience less competition and higher rates due to technology transitions (WTUC letter, at. p. 3).

By Andy Regitsky, CCMI