On August 7, 2015, the FCC released the long-awaited Order in its “Technology Transitions” proceeding which addressed CLEC concerns about the availability of ILEC wholesale services during the industry transition from the Time Division Multiplexed (TDM) network to a network using Internet Protocol (IP).  The Order also provided protection for consumers and businesses as ILECs retire copper and retail services utilizing that copper are discontinued.  

The Order does appear, however, to have an unintended consequence, one that could cause CLECs to abandon retail customers even while ILECs conscientiously follow the FCC’s section 214 service discontinuance rules. 

In a Petition for Clarification filed with the FCC on November 18, 2015, U.S. TelePacific Corp. (TelePacific) requests the Commission to explain in the Technology Transitions Order how the interplay between the Section 251(b) copper retirement process and the Section 214(a) service discontinuance process should work in the event that an ILEC’s copper loop retirement leads to a CLEC having to discontinue provision of service to a community or part of a community.

TelePacific notes that in the Technology Transitions Order, the Commission took two important actions. First, it required ILECs to provide interconnected and retail customers with 180 days notice when they retired copper.  Second, the Commission required ILECs that discontinue TDM services to a community (or part of a community) to seek Commission approval for such discontinuance and as a condition of approval to provide competitors using TDM wholesale services such as DS1 or DS3 with reasonably comparable rates, terms and conditions for an IP-based wholesale replacement service.

TelePacific claims that these two measures do not appear to address circumstances where the ILEC retires copper but does not discontinue TDM services in the relevant community. For example, where a CLEC provides broadband service via Ethernet over Copper (EoC) and the ILEC announces the retirement of those copper loops or feeder, it is possible that even while the CLEC is working to complete its Section 214 service discontinuance and transition customers to alternative service providers, the CLEC could be forced to discontinue retail broadband service before Commission approval if the ILEC retires its copper. 

TelePacific states:

Although all carriers must “consider carefully” whether copper retirement “will be accompanied by or be the cause of” service discontinuance, there is no explicit requirement that an ILEC file a Section 214 discontinuance application when its copper retirement results in a CLEC discontinuance of service. Under such a scenario a CLEC using copper loops to provide EoC would be deprived of the ability to use UNE [unbundled network element] copper loops to continue providing the retail broadband service after the date of retirement. TelePacific recognizes that theoretically there are other transmission technologies that support the provision of broadband to small and medium sized business customers. But it is unlikely that such replacement technologies would be available or if available would be affordable. For example, purchasing TDM-based UNE DS1s, DS1 special access circuits, or wholesale Ethernet from the ILEC (if available) likely would not be a practical replacement for the retired copper loops (TelePacific Petition for Clarification, Docket 13-5, filed November 18, 2015 at p. 5).

In exiting the market, the ILEC would be obligated to file a Section 214 application. But that Section 214 application occurs independently of the ILEC’s retirement of the copper loops or feeder. The CLEC would have no influence over the ILEC’s retirement process and the Commission, in its Section 214 process, would not appear to have the ability to require the ILEC to delay the retirement until the CLEC’s customers have made arrangements for alternative service providers. Thus it is possible that even while the CLEC is working to complete its discontinuance consistent with the Commission’s rules, and transition customers to alternative service providers, the CLEC could be forced to discontinue retail broadband service before Commission approval if the ILEC cuts off access to its copper (Id. at pp. 7-8).

Thus, TelePacific claims that in the Order there is no clear way for the Commission to stop the copper retirement until the service discontinuance process has been completed:

The Commission should clarify its rules to avoid such a “situation where a [C]LEC may irrevocably lose business as a result of the technology transitions and loss of wholesale inputs.” Specifically, the Commission should clarify that where the loss of access to retired copper leads to a discontinuance of retail service, the two processes must be harmonized. The Commission could harmonize the processes by automatically granting a Section 214 application based on copper retirement on the date of retirement, so long as the Section 214 applicant filed no less than 60 days prior to the planned retirement date.  Alternatively, the Commission could consider in the Section 214 process whether it should require a delay in the copper retirement until the CLEC’s discontinuance no longer creates “an unreasonable degree of customer hardship (Id. at p. 9)."

With the Technology Transitions Order recently becoming effective, it is too early to see its practical effects on interconnecting CLECs and their customers. However, as the pace of copper retirements and service discontinuances increases going into 2016 and beyond, look for many ILEC-CLEC arguments over the “reasonably comparable “ replacement IP-based wholesale services.  Moreover, as seen by this Petition, there clearly will be unintended consequences of the FCC’s copper retirement and service discontinuance processes. CLECs and enterprise customers are hereby warned they had better keep a close eye on all potential interruptions to any service, wholesale, or retail, they purchase from ILECs or CLECs.  

By Andy Regitsky, CCMI