Competitive carriers (CLECs) got some positive news yesterday when the Federal Communications Commission (FCC) asked the U.S. Court of Appeals for the District of Columbia to reconsider its decision in the U.S. Telecom Association v. FCC case. The original decision was declared a victory for regional Bell operating companies (RBOCs) at the time. But that victory could now be reversed.

Back in May of this year, the D.C. Appeals Court struck down a rule that required RBOCs to share lines with competitors for high-speed Internet service (see RBOCs Ring Up Court Victory).

In that decision, it also ordered the FCC to reconsider its standards for which network elements must be shared with competitors. Specifically, the Court said that the way the FCC went about determining which elements RBOCs should open to rivals and which should not was unfair. The Court went as far as proposing some of its own standards by which it feels the agency should determine whether or not an element should be unbundled.

The court's main criticism of the FCC was that the Commission failed to consider competition from other providers such as cable operators when requiring local telephone companies to share a line. The judges also said the agency failed to identify local market conditions and associated wide-ranging costs when making elements of their networks available to rivals.

Although much of the rhetoric coming from the Commission has tended to favor the RBOCs in the past, the fact that the agency is appealing a decision that heavily favors RBOCs is a good sign for competitive carriers. And competitive carriers are in full support of the Commission’s appeal (see Covad Seeks Line Sharing Review)

While the line sharing issue is an important one, there is an even larger issue at stake in these proceedings -- the Commission’s ability to use its discretion in interpreting the 1996 Telecommunications Act. Some in the industry fear that this ruling could hinder the Commission’s ability to interpret not only the 1996 Act but all telecommunications statutes. This threatens to slow down reforms because the authority of FCC might be challenged in the courts on every ruling it puts out.

So what happens next? The Appeals Court has three options. It can reconsider the decision and issue a new one, rehear the case and render a new opinion, or deny the request and stand by its original ruling. If the request is denied, the FCC can then appeal to the U.S. Supreme Court. Based on other recent cases, it appears that the High Court rules more favorably for the FCC when it comes to discretionary issues (see Supremes Rule for Competitive Carriers).

While the case is being reviewed, the Appeals Court decision will not be implemented, and the current unbundling rules still apply. The FCC is already reviewing its current rules in its Triennial Review process.

— Marguerite Reardon, Senior Editor, Light Reading
http://www.lightreading.com