Thursday, March 6, 2014

Does Sec. 706 Authority Ride Solely on the FCC Continuing to Find Indequate Broadband Competition?

            In the Verizon v. FCC, the D.C. Circuit Court of Appeals briefly addressed the issue of the Commission's assessment of broadband competition.  With some incredulity, the court nevertheless expressed its unwillingness to second guess the FCC on its decision to back off from previously finding adequate market access.  With a new and reversed finding of inadequate access—especially in rural areas—the FCC has a stronger argument for using Sec. 706 of the Communications Act to achieve promotional goals through non common carrier rules and regulations.

            The D.C. Circuit Court of Appeals frequently is not so deferential.  For example, even when the FCC had explicit authority under the Telecommunications Act of 1996 to require local loop unbundling, the D.C. Circuit (in the U.S. Telecom Assn. cases) chided the Commission for lack of granularity and market specific requirements.  Bear in mind the court second-guessed--if not micromanaged--a process involving telecommunications service providers and Title II requirements.  The court appeared quite uncomfortable with the FCC forcing competitors to cooperate on matters where interconnection terms and conditions would not match what arm's length, market driven negotiations would generate.

            The possibility exists that a change in administration, or judicial impatience with regulatory meddling will prompt an appellate court to second guess a finding of insufficient competition.  If that were to occur I suspect the FCC would claim that its Sec. 706 authority does not ride solely on the basis of its annual assessment of the broadband marketplace.  However the Commission would have yet another hard case to make that accessibility in the context of Sec. 706 is measured by factors other than marketplace competitiveness.

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