Wednesday, September 8, 2010

How Granular Do FCC Orders Have to Be?

When the FCC went about the task of executing its statutory mandate to promote unbundled access to incumbent carrier facilities and services, appellate courts chided the Commission for the lack of “granularity,” geographic specificity and market-based analysis in orders requiring nationwide access. Despite an ongoing commitment to promote access and competition, the FCC has eliminated any such requirement, either out of exhaustion, or the flawed conclusion that facilities-based competition exists or soon will thrive.

While researching what few access and interconnection requirements remain, I again looked at a 2009 D.C. Circuit case where the court affirmed the FCC’s elimination of dominant carrier regulation of special access, i.e., local and middle mile interconnections. See Ad Hoc Telecommunications Users Committee v. FCC, 572 F.3d 903 (D.C. Cir. 2009) at Ad Hoc Telecommunicatins Users Committee.

In concluding the FCC did not act arbitrarily the court quoted from the case where it validated the FCC’s decision not to require unbundling of broadband access service elements: “the [Communications Act] does not compel a ‘particular mode of market analysis or level of geographic rigor.’” But when the court reviewed the FCC’s unbundling requirements, the Commission had to show market-specific and geographic-specific rigor:

“Instead, the FCC must establish unbundling criteria that take into account ‘relevant market characteristics,’ which capture ‘significant variation,’ [quoting United States Telecom Association v. FCC, 359 F.3d 554, 576 (D.C.Cir.), cert. denied sub nom., Nat’l Ass’n of Regulatory Utility Comm’rs v. United States Telecom Ass’n, 543 U.S. 925, 125 S.Ct. 313, 160 L.Ed.2d 223 (2004).” Covad Communications, Inc. v. FCC, 450 F.3d 528 (D.C. Cir. 2006)(affirming FCC’s abandonment of most unbundling requirements). The court required the FCC to sensibly define the relevant markets, connect those markets to the FCC’ determination whether a competitive local carrier would be competitive impaired if it lacked such access, and consider whether the element in question is “significantly deployed on a competitive basis. 259 F.3d at 574.

So if I get this correctly: when it comes to requiring incumbent carriers to perform common carrier interconnection duties, for compensation at rates never deemed insufficient by the FCC, the Commission had better calibrate tightly its market and geographic scope of coverage analysis. But when it comes to deregulation, the Commission can point to the possibility of competition arising somewhere and somehow.

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