NEW YORK -- The FCC is about to propose new laws that, according to many sources, will harm small telecom businesses, including Internet Service Providers (ISPs) and Competitive Local Exchange Companies (CLECs).

Teletruth today has filed a Complaint against the FCC, requesting that with FCC redo its Triennial review, which looks at the prices of service to competitors, (known as "UNE") because it has violated numerous laws, from the Telecommunications Act of 1996, to the Regulatory Flexibility Act (as amended), as well as President Bush's Executive Order 13272.

Teletruth has previously filled comments in 6 broadband proceedings that outline how the FCC's entire process of data collection and conducting its proceedings are in violation of the Regulatory Flexibility Act, which is designed to make sure that small business interests are fully incorporated into any new law.

To read these filings and more info about the Regulatory Flexibility Act: http://www.teletruth.org/FCCbroadband.html

"The FCC has essentially ignored its legal obligation to give small telecom businesses the rights they are entitled to under the various laws. In fact, the current proceeding has taken what was designed to eliminate market barriers to competitors and is being used to put these small companies out of business" stated Bruce Kushnick, Chairman of Teletruth.

Violations of the Telecom Act

Section 257 of the Telecom Act, which mandates the Triennial Review, clearly states that the FCC is supposed to be "identifying and eliminating... market entry barriers for entrepreneurs and other small businesses in the provision and ownership of telecommunications services and information services, or in the provision of parts or services to providers of telecommunications services and information services."

According to many sources, including the a recent New York Times article (2/3/03) "the new rules will favor the regional Bell operating companies and will hurt the small start-up local carriers "

It should also be noted that Section 257 also states that the FCC is to favor "diversity of media voices, vigorous economic competition, technological advancement, and promotion of the public interest, convenience, and necessity.".

According to the New York Times "By spring, Mr. Powell also intends to repeal or relax the ownership rules that have kept the biggest media conglomerates from growing larger."

"In short, the FCC is ignoring the law as Congress wrote it, and making it be used to put the companies it was supposed to protect out of business while increasing the monopolies' control. This means less choice, worse service, a slowdown on innovation and higher prices" states Kushnick.

Violations of the Regulatory Flexibility Act

The FCC, under this act, is required to do an impact study on how its laws will harm small businesses. However, the FCC has not done anything of the sort for this proceeding and in its analysis it is using bad data, has ignored numerous groups of small business competitors, including Internet providers, has failed to properly notify those who would be impacted for comments, and has failed to come up with any alternatives. In short, Teletruth believes that there are multiple violation of the law.

In the case of bad data, the FCC is quoting materials from 1992, "The U.S. Bureau of the Census ("Census Bureau") reports that, at the end of 1992, there were 3,497 firms engaged in providing telephone services, as defined therein, for at least one year". In another place, the FCC states that "We do not have data specifying the number of these carriers that are not independently owned and operated, or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of CAPs that would qualify as small business concerns under the SBA's definition." Notice that the abbreviation "CAPS" for Competitive Access Providers, has not been in use for over 5 years.

The Triennial Review documents also leaves out the 5000+ United States Internet Service providers in its analysis.

"How can the FCC make any kind of rational analysis when they can't even figure out how many companies are represented?" asks Kushnick. "Teletruth's own "Small Telecom Business Impact Study" showed that thousands of companies may be put out of business if these laws go through, affecting millions of Internet customers, not to mention a new drain on the economy". To read this study, see: http://www.newnetworks.com/smallbusinessimpactstudy.html

The Small Business Administration's Office of Advocacy has found that the FCC's broadband proceedings could also harm small businesses. To read their analysis see: http://www.sba.gov/advo/laws/comments/fcc02_0827.html

Executive Order 13272.

According to the Small Business Administration's Office of Advocacy, "On August 14, 2002, President George W. Bush signed Executive Order 13272 that requires federal agencies to implement policies protecting small businesses when writing new rules and regulations."

In conclusion: "Why write laws if they are just going to be ignored by those who have to implement them?" adds Kushnick. "The current policies of the FCC may lead to another telecom crash because the agency is taking a position that they don't have to listen to small businesses. It's time Congress steps in an controls an agency that has decided to not follow the laws of the land".

To learn more about Teletruth, please visit: http://www.teletruth.org