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National Regulatory Precedents and Trends
Federal Communications Commission (FCC)
| In General: The (Federal Communications) Commission and each State commission with regulatory jurisdiction over telecommunications services shall encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans (including, in particular, elementary and secondary schools and classrooms) by utilizing, in a manner consistent with the public interest, convenience, and necessity, price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment. | |
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-- The Telecommunications Act of 1996 - Excerpt from the text of Section 706 |
The Federal Communications Commission (FCC), bound by the Telecom Act to encourage both competition and broadband investment, has as a matter of policy continued to ease conditions for CLECs to enter local exchange markets with the deployment of advanced networks. They have many complex and often interdependent issues to manage including: local and long distance phone competition, wireless auctions and the rapid evolution of offerings, mergers and acquisitions of vast telecom concerns, access charges and carrier interconnect, cross-subsidies, the Internet's popular use, IP carriage of varied media, cable systems becoming data and voice providers, satellite systems broadcasting video and providing ubiquitous two-way communication, national infrastructure reliability, universal service funding mechanisms and applications, the E-Rate, the Digital Divide between information "have" and "have nots," contention over jurisdiction and rulings, digital wiretapping, cryptography, civil liberties, the public interest, and consumer protection. Whew!
The FCC's Common Carrier Bureau (CCB - http://www.fcc.gov/ccb/) is responsible for administering policies concerning telephone companies that provide long distance and local service to consumers. These companies, called "common carriers" provide services such as voice, data, and other telecommunication transmission services to consumers. The Common Carrier Bureau is charged with ensuring that all consumers have rapid, efficient, nationwide and worldwide access to these services at reasonable rates. As competition grows and new technologies are introduced into the marketplace, the CCB seeks to eliminate unnecessary regulatory burdens on carriers while protecting the interests of consumers.
FCC Rulings Supporting High-Bandwidth Deployment:
The FCC is an active policy maker as well as manager, "vigilantly monitoring the rollout of broadband access and encouraging competition in this market." They recently formed a Federal-State Joint Conference on Advanced Services (http://www.fcc.gov/jointconference/), appointing Federal and State members. In the meantime, the FCC has been busy with rule making procedures and actions intended to drive further progress in creating a broad, competitive telecommunications services marketplace. Their Advanced Services Collocation Order of March 1999 puts forth clear guidelines for collocation of CLECs' and Data Local Exchange Carriers' (DLECs) switching equipment, provides alternatives to traditional "caged" collocation, and allows for interim collocation prior to receiving certification or an interconnection agreement.
The FCC's Unbundled Network Element (UNE) Remand Order of November 1999 has key provisions regarding Digital Subscriber Line (DSL), how the local loop lines are conditioned, and provides for sub-loop unbundling as well as a review of UNEs. More recently the FCC ruled to require line sharing by which ILECs must give CLECs access to the high-frequency portions of local loops at favorable rates, turning the sub-loop into a new Unbundled Network Element (UNE). The ability to provide voice telephony from the ILEC, while leasing the high-frequency bandwidth to enable CLECs to line-share, will unquestionably drive further deployment and utilization of Digital Subscriber Line (xDSL) and other advanced competitive applications and services. The first rate case has occurred in Minnesota setting US WEST's high-frequency line sharing lease rate at some $6.00 per month.
In February 2000, the Commission adopted a Fourth Report and Order and Memorandum Opinion and Order (FCC 00-26) establishing criteria by which the Bell Operating Companies (BOCs) may request modifications to Local Access Transport Areas (LATAs) to deploy broadband services. A two-part test must determine that granting a LATA boundary modification is necessary to encourage deployment of advanced services on a reasonable and timely basis and would not materially affect the BOC's incentive to open its local markets to competition so as to obtain long distance authority.
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America's stunning success in promoting the Internet revolution owes a major debt to determined regulatory action that encouraged all aspects of network openness and interconnection. All these innovations were possible because the FCC decided in the 1960s that the emerging world of data networking should not be treated like telecom services. Therefore, it exempted all forms of computer networking from much of telecom's regulatory baggage, including fees to fund various cross-subsidies for telephone services.
As a result it prevented telephone companies from dictating the architecture of data networks. Thanks to the enduring FCC policy of openness and competition, specialized networks and their users could unleash the Internet revolution. Open network policy assured the widest possible user choice and the greatest opportunities for users to interact with the myriad of emerging new entrants in all segments of the network. This steady policy set in motion, and sustained, a virtuous cycle of cumulative innovation, new services, infrastructure development, increasing network usage with evident economic benefits for the U.S. economy. Open infrastructure policy fostered user-driven innovation. This meant that the principal sources of new ideas driving economic growth emerged from a long-term process of experimentation and learning, as business and consumer users interactively adopted and shaped application of information technology and E-commerce. Such user-centered innovation processes flourish when users are granted access to a wide range of choices of facilities, services, and network elements. |
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-- Excerpted from Defending the Internet Revolution in the Broadband Era: When Doing Nothing is Doing Harm, Berkeley Roundtable on the International Economy (BRIE), August 1999 (http://e-conomy.berkeley.edu/pubs/wp/ewp12.html) |
FCC Rulings on Over-the-Air Reception Devices:
The Federal Communications Commission, as directed by Section 207 of the Telecommunications Act of 1996, adopted the Over-the-Air Reception Devices Rule (47 C.F.R. Section 1.4000) concerning governmental and non-governmental restrictions on viewers' ability to receive video programming signals from direct broadcast satellites (DBS), multichannel multipoint distribution (wireless cable) providers (MMDS), and television broadcast stations. It prohibits restrictions that impair the installation, maintenance or use of antennas used to receive video programming including video antennas such as direct-to-home satellite dishes that are less than one meter (39.37") in diameter (or of any size in Alaska), TV antennas, and wireless cable antennas.
Local governments, community associations, and landlords may not, other than for safety or historic preservation reasons, unreasonably delay or prevent installation, maintenance or use; unreasonably increase the cost of installation, maintenance or use; or preclude reception of an acceptable quality signal for viewers who place video antennas on property that they own, or that they rent and is within their exclusive use or control. This includes rental property, condominium owners, and cooperative owners who have an area where they have exclusive use, such as a balcony or patio, in which to install the antenna. Under some circumstances, the availability of a central or common antenna can be used by a community association or landlord to restrict the installation of individual antennas.
E-Rate Impact on Telecommunications in Education:
Traditionally, Universal Service Fund (USF) subsidies have been used to reduce rural telephone costs and provide discounted telephone rates to disadvantaged individuals. Congress greatly expanded this scope in the Telecommunications Act of 1996, providing for the extension of the Universal Service Fund (USF) to K-12 schools and libraries to promote the use of telecommunications with a new program, the Education Rate (E-Rate), providing discounts of from 10 to 90% on educational telecommunications service and equipment costs. Federal Communications Commission rulings defined the new USF program including its funding mechanism, qualifying institutions, applicable discounts, and the specifics of applying for and accessing these new subsidies. Interim authority for administering the fund nationally was assigned to the National Exchange Carrier Association (NECA - http://www.neca.org/), which in turn established the Universal Service Administrative Company (USAC - http://www.universalservice.org/) with its Schools and Libraries Division (SLD - http://www.sl.universalservice.org/) to directly oversee the program. The Arizona Corporation Commission (ACC) approved the federal Universal Service Fund provisions and discount matrix allowing Arizona to move forward and take advantage of these benefits. The State acts to approve technology plans and vendor arrangements while local districts, schools and libraries will assess their current status, plan their own technology investments and manage the acquisition and integration of technology into their learning environment. The USAC recently informed the FCC that the demand for E-rate discounts in Year Three is estimated to be some $4.72 billion, more than the previous two funding years combined. Contention over who should contribute, how the funds should be administered, and how much should be collected and spent will continue and drive the plans evolution over time.
| Fostering Competition in a Converging World: | |
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Multiple networks freely interconnecting is no distant dream. The forces of convergence are beginning to pry open markets that have been closed for decades. After years of monopolies, high prices, and stifled innovation, we are beginning to see the benefits of competition in many areas. We have an opportunity, not unlike the opportunity policymakers had at the turn of the century, to make these markets competitive. And I am determined not to miss it. I can promise you we are not going back to the large concentrations of old. We will not let anybody establish a monopoly in exchange for speculative promises of broadband and other perceived advantages. And make no mistake, robust competition is within reach.
Long distance providers, cable companies, wireless operators, incumbent and competitive local exchange providers: all are beginning to compete with one another. And we must make sure they continue competing. We must nurture these seeds of competition using all the tools at our disposal to give firms enough flexibility to compete in new markets while guarding competition where it already exists. Prying open markets, protecting markets that are already open, letting convergence take hold in the marketplace: this is our challenge. This is our opportunity. Let us seize it. |
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-- William E. Kennard, Chairman, Federal Communications Commission before the Federal Communications Bar Association, December 9, 1999 |
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