Industry Indicators

Now that most of the RBOCs have met the Section 271 requirements of the Telecom Act of 1996 and are entering long distance markets, it’s time to set rules outlining how they should behave. To that end, the FCC is asking for comment on a regulatory framework for the ILECs now acting as IXCs.

For instance, the Further Notice of Proposed Rulemaking (FNPRM) wants to hear from industry players now that the RBOC/IXCs are subject to statutory separate affiliate requirements designed to address potential discrimination and cost misallocation.

When an ILEC provides in-region, long distance services on an integrated basis (i.e., without a separate affiliate), it is subject to dominant carrier regulation, which is a regulatory framework that the FCC adopted in the 1980s to distinguish AT&T’s pre-divestiture market power from new entrants. Under dominant carrier regulation, carriers are required to file tariffs with supporting documentation for the service in question. The FCC is asking for opinions on whether there is a continued need for dominant carrier regulation of RBOC in-region long distance service once the RBOCs meet Section 271 requirements. The FCC also wants to know whether or not smaller LECs should be classified as non-dominant or dominant providers of in-region long distance service and whether there are alternative regulatory approaches—besides dominant carrier regulation—to address any potential anti-competitive behavior.