Verizon Asks FCC to Undo Unbundling

Verizon Communications Inc. (NYSE: VZ) late Wednesday asked the Federal Communications Commission (FCC) to excuse it from sharing its DS1 and DS3 loop and transport facilities with competing voice providers, especially cable companies.

Verizon wants relief from its "dominant carrier" responsibilities in six major metro areas. These include Boston, New York, Philadelphia, Virginia Beach, and Providence, R.I.

Verizon says it’s facing "facilities-based" competition from cable, wireless, "over-the-top VOIP," and wholesale voice providers. It also cites losses in its own land-line customer count, although specific loss numbers had been redacted from copies of the petitions received Thursday. (See FCC Helps Verizon's Enterprise Game.)

The carrier says its cable, wireless, and wholesale competitors are unfairly relying on these facilities to compete for enterprise customers -- at a disadvantage to Verizon. "Competitors in the New York MSA are competing extensively using special access obtained from Verizon," one of the six petitions reads.

The forbearance, if granted, would relieve Verizon of the pricing caps imposed on the "dominant carrier" in a given market when selling wholesale access to its exchange facilities. So Verizon could charge competitors much more for access to its DS1 and DS3 loops.

Verizon cites a 2005 FCC decision to relieve Qwest Communications International Inc. (NYSE: Q) of similar unbundling responsibilities in the Omaha, Neb., market. In the Omaha Forbearance Order, the Commission found that Cox Communications Inc. facilities were “capable of delivering both mass market and enterprise telecommunications services.”

The main thrust of Verizon's argument is that competition has increased dramatically since the dominant carrier rules were written.

Verizon says its cable competitors now offer competitive voice services to 65 percent to 80 percent of households in the Pittsburgh metro area, for example. At the high end of the scale is the Virginia Beach metro area, wherein Verizon claims cable voice service is available to 90 percent of households.

"Throughout this MSA, Verizon faces competition from a wide range of technologies and an even broader array of providers," one of the petitions states. "These competitive alternatives are available to mass-market and enterprise customers alike."

The FCC now has 12 months to hold a majority vote on the issue. If it does not, forbearance is granted automatically.

— Mark Sullivan, Reporter, Light Reading

dad1944 12/5/2012 | 3:41:42 AM
re: Verizon Asks FCC to Undo Unbundling I can't believe that we all have such short memories. Remember when we were charged an arm and a leg becuase these preditors claimed that "Universal Service" was their mandate? Now, after the copper and fiber that WE (the public) paid for is in the ground, they want to block our use of these facilities unless we pay them AGAIN! The FCC should allow all providers to use both the ILEC's facilities and the Cable company's facilities. After all, WE PAID FOR IT!
ThomasR 12/5/2012 | 3:41:30 AM
re: Verizon Asks FCC to Undo Unbundling dad1944:

How did you come to the conclusion that the cable company should open its network to other providers because you paid for it? Would this be the same thinking as because you are buying goods from Walmart that other competitors should be allowed to use the market's store at a reduced lease rate (because you paid for it)?

paolo.franzoi 12/5/2012 | 3:41:29 AM
re: Verizon Asks FCC to Undo Unbundling
If USF is the issue, remember that in vast majority goes to the non-RBOC ILECs (aka the Independent Operating Companies). The point of USF is that urban people are taxed to pay for phone companies to offer phone service to rural people at similar prices.

There are other taxes that take money from rural people and give it to urban people.

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