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GN 13-5, WC 16-143, 05-25, RM-10593: USTelecom Ex Parte Response to Granite Telecommunications

07.29.2016
Ex Parte

We write in response to an ex parte letter filed July 25, 2016, by Granite Telecommunications summarizing a meeting of Granite and INCOMPAS with staff from the Wireline Competition Bureau on July 21, 2016. During that meeting, Granite explained concerns with the linking of the “reasonably comparable wholesale access requirement for wholesale voice platform services” in the Technology Transitions Order to the completion of the business data services (BDS) proceeding, arguing “that the expiration of the wholesale voice platform condition should not be tied to the completion of the business data services proceeding but instead should continue until such time as the Commission analyzes the relevant market for multi-location business voice services and determines the appropriate treatment of incumbent market power in that market.” The Commission should decline to accept this self-serving invitation to extend indefinitely the duration of a condition which we believe was improperly imposed.

As an initial matter, this request for the Commission to modify its ruling is procedurally improper because it comes well beyond the period for filing a petition for reconsideration.  Raising this issue in the context of an ex parte discussion makes it no less an untimely request for reconsideration of a Commission ruling, and for that reason alone, the Commission need not address its merits.

Additionally, USTelecom has challenged the legality of this condition in the D.C. Circuit court, as Granite and INCOMPAS are well aware because they have intervened in support of the Commission. Specifically, we asked the court to determine whether the Commission exceeded its authority under 47 U.S.C. § 214(c), and whether the reasonably comparable wholesale access requirement “is arbitrary, capricious, an abuse of discretion, or otherwise contrary to law.” We argue, in relevant part, that the condition substantively compels carriers to offer unbundled access to IP-based network equipment and platform services, although the Commission has long refused to impose such unbundling requirements, and although Congress limited the Commission’s ability to mandate unbundling to instances where the Commission shows that access is necessary and competitors would be impaired without it. The Commission has made no such showing here.  Moreover, this regulatory approach was designed to appropriately balance the goals of promoting facilities-based investment and innovation with the goal of stimulating competition, and access to incumbent unbundled network elements was never intended to be permanent or technology neutral. Thus, Granite’s back door attempt to further entrench this condition that is based on questionable legal authority is wholly inappropriate.

Granite apparently believes the Commission will at some point undertake to analyze the “multi-location business voice services” market to determine “the appropriate treatment of incumbent market power in that market.”  But the Commission has never identified nor targeted for regulation such a “market,” and it would be nonsensical to do so now given the Commission’s recent action to “modernize” regulation of incumbent LEC legacy telephone services by declaring incumbent LECs to be non-dominant in the provision of interstate switched access services.  Specifically, the Commission found that “incumbent LECs lack market power over both ‘interstate mass market and enterprise switched access services.’” Thus, the Commission has already declared that there is no ILEC market power in the voice services market.  Moreover, contrary to Granite’s suggestion that the Commission will at some point conduct an analysis of a “relevant market” consisting solely of multi-location business voice services, the Commission has never signaled an intent to do so.   

Granite’s proposal to extend the comparable wholesale access condition to some undetermined point in the future should be rejected.  Please do not hesitate to contact me should you have any questions regarding this filing.