July 13, 2001, 1:30 PM — The U.S. Federal Communications Commission (FCC) yesterday adopted new rules for phone companies, permitting competitive local exchange carriers, or CLECs, to install telephone switching and routing equipment capable of multiple functions in incumbent carrier facilities. The devices must mainly function to connect CLEC equipment with the incumbent's local lines.
The FCC ruled in 1999 that competitors must be allowed to collocate any kind of phone equipment in incumbents' central offices, whether the equipment is related to local-line access or not. The U.S. Court of Appeals for the District of Columbia Circuit invalidated that rule, handing it back to the FCC for reconsideration. Thursday's ruling is the result of that reconsideration.
The FCC addressed multifunction equipment -- for example, a voice switch that can also serve as a DSL (digital subscriber line) access multiplexer. Collocating equipment is necessary if CLECs cannot otherwise connect to unbundled networks without having equipment at incumbent facilities, the FCC ruled.
Multifunction equipment meets the standard for "necessary" collocation only if its primary purpose and function provides the CLEC with "equal in quality" interconnection or "nondiscriminatory access" to one or more unbundled network elements, such as individual phone lines.
Initial reaction to the FCC announcement was tentatively negative from the incumbent carriers. The incumbent carrier trade group, the United States Telecom Association (USTA), expressed disappointment.
The ruling seems to "unnecessarily expand" obligations borne by incumbent local exchange carriers past what is required by the Telecommunications Act of 1996, said Lawrence Sargeant, USTA vice president for regulatory affairs and general counsel, in a statement. The USTA will review the order to see how the FCC justifies its ruling in light of what the Court of Appeals said, according to the statement.
An incumbent spokesman expressed pessimism over the ruling.
"The question that has been raised is whether we have to become the CLEC hotel for any business they want to be in," said Bill McCloskey, director of media relations for BellSouth Corp. While it makes business sense for CLECs to provide services like Internet access, DSL or video-on-demand, the question is why the incumbents should have to bear any financial burden for CLEC plans.
"You understand why they want to do it ... it's just whether we have to subsidize it," he said.
Conversely, the Competitive Telecommunications Association (CompTel), a trade group for CLECs, heralded the FCC move as a victory for competitors. CLECs need such rules so that they can reach more customers, the association said in a statement.