FCC backs CLECs in collocation ruling

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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.

As for Thursday's FCC ruling, the commission further said that most switching and routing equipment meets the standard for "necessary" collocation. However, collocation of traditional circuit switches do not because they are "very large pieces of equipment compared to newer, more advanced switching and routing equipment," the FCC ruling said.

Furthermore, if some function of the equipment goes beyond simply gaining open access to the phone lines to provide service equivalent to the incumbents', the function must not cause the device to be so large or obtrusive that it significantly increases the burden on the incumbent's property, the FCC ruled.

Incumbents may now tell CLECs where to put their equipment, replacing a rule giving CLECs the option of picking their physical collocation space from among the unused space in an incumbent carrier's premises. However, incumbents are now required to provide cross-connects -- connections between one CLEC and another within the central office -- on request, rather than allowing the CLECs to build it themselves.

In the arcane world of telephone services, a war of sorts has been fought between upstart telephone companies hoping to offer expanded voice services or high-speed Internet access and the big regional phone companies that own most of the lines to homes and businesses. While users feel the effects of the struggle as CLECs fumble for months before switching on service in some cases, or die off and leave people stranded without service, the key battlefield is the central office, which goes largely unseen.

Phone lines for a neighborhood converge on a central office, a facility that connects the lines to the larger telecommunications grid. The regional Bell operating companies like Verizon Corp. or SBC Communications Inc. almost always own a monopoly on these local phone lines.

The Telecommunications Act of 1996 requires incumbent local exchange carriers, or ILECs, to open access to competition with the central office as the access point. CLECs hook into the incumbent's local lines with switching gear and pay them a fee for the right of way.

Incumbents and competitors fight over the hows and the whens and the wheres of the open access regulations. CLECs claim that ILECs' rules about what kind of equipment a CLEC can install in a central office gives incumbents an unfair advantage. ILECs counter that the CLEC's biggest wounds are self-inflicted, that incumbents are following the letter of the law, and that an incumbent should be able to exercise its property rights in its own facility.

"Collocation costs us a certain amount of money, and it takes up the available space," said Eric Rabe, a Verizon spokesman. "With the demand of competitors filling up space ... where are you going to put them?"

Other incumbents agree that central offices are getting crowded.

"In the suburban, high-growth areas, ours our full," said BellSouth's McCloskey.

Incumbents and competitors charge each other with endangering equipment or interfering with services as competitors jockey for physical position among the riot of wires and switches in central offices. Some offices use wire cages to fence one competitor off from another, others use a simple line on the floor. ILECs might require CLEC technicians be supervised while getting at equipment in the central office, leading to claims of service bottlenecks as a competitor waits for an ILEC supervisor to become available.

The fights often spill over into the courts -- Verizon brought suit against Covad Communications Co. in June, claiming the DSL provider lied to customers and regulators when telling them that Verizon had been obstructing Covad's efforts to install service. Covad called Verizon's suit a harassment.

Information on the FCC can be accessed at http://www.fcc.gov/.

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