Modernizing Unbundling and Resale Requirements in an Era of Next-Generation Networks and Services
| Published date | 06 January 2020 |
| Citation | 85 FR 472 |
| Record Number | 2019-27607 |
| Section | Proposed rules |
| Court | Federal Communications Commission |
Federal Register, Volume 85 Issue 3 (Monday, January 6, 2020)
[Federal Register Volume 85, Number 3 (Monday, January 6, 2020)]
[Proposed Rules]
[Pages 472-487]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27607]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 51
[WC Docket No. 19-308; FCC 19-119; FRS 16321]
Modernizing Unbundling and Resale Requirements in an Era of Next-
Generation Networks and Services
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document, the Federal Communications Commission seeks
comment on a number of proposals to modernize unbundling and resale
obligations applicable to incumbent local exchange carriers (incumbent
LECs) for local loops, dark fiber transport, and other types of network
elements. The Commission also seeks comment on costs associated with
specific unbundled network elements and resold services and on a
transition period for all unbundling and resale relief that may be
provided.
DATES: Comments are due on or February 5, 2020, and reply comments are
due on or before March 6, 2020.
ADDRESSES: You may submit comments, identified by WC Docket No. 19-308,
by any of the following methods:
Federal Communications Commission's website: https://www.fcc.gov/ecfs/. Follow the instructions for submitting comments.
Mail: Parties who choose to file by paper must file an
original and one copy of each filing. If more than one docket or
rulemaking number appears in the caption of this proceeding, filers
must submit two additional copies for each additional docket or
rulemaking number. Filings can be sent by hand or messenger delivery,
by commercial overnight courier, or by first-class or overnight U.S.
Postal Service mail. All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.
All hand-delivered or messenger-delivered paper filings for the
Commission's Secretary must be delivered to FCC Headquarters at 445
12th St. SW, Room TW-A325, Washington, DC 20554. The filing hours are
8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with
rubber bands or fasteners. Any envelopes and boxes must be disposed of
before entering the building. Commercial overnight mail (other than
U.S. Postal Service Express Mail and Priority Mail) must be sent to
9050 Junction Drive, Annapolis Junction, MD 20701. U.S. Postal Service
first-class, Express, and Priority mail must be addressed to 445 12th
Street SW, Washington, DC 20554.
People with Disabilities: To request materials in
accessible formats for people with disabilities (braille, large print,
electronic files, audio format), send an email to [email protected] or
call the Consumer & Governmental Affairs Bureau at 202-418-0530
(voice), 202-418-0432 (tty).
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Michele Levy Berlove, Competition
Policy Division, Wireline Competition Bureau, at (202) 418-1477,
[email protected].
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking (NPRM) in WC Docket No. 19-308, adopted on
November 22, 2019 and released on November 25, 2019. The full text of
the document is available at https://docs.fcc.gov/public/attachments/FCC-19-119A1.pdf. The full text is also available for public inspection
during regular business hours in the FCC Reference Information Center,
Portals II, 445 12th Street SW, Room CY-A257, Washington, DC 20554. To
request materials in accessible formats for people with disabilities
(e.g., braille, large print, electronic files, audio format, etc.) or
to request reasonable accommodations (e.g., accessible format
documents, sign language interpreters, CART, etc.), send an email to
[email protected] or call the Consumer & Governmental Affairs Bureau at
(202) 418-0530 (voice) or (202) 418-0432 (TTY).
Synopsis
I. Notice of Proposed Rulemaking
1. In this Notice of Proposed Rulemaking (NPRM), we propose to
modernize our unbundling rules for local loops, dark fiber transport,
and other types of network elements to reflect the vastly changed
communications environment since the Commission last examined
unbundling obligations through the impairment lens. These legacy
obligations appear to no longer make any sense in many geographic areas
due to vigorous competition for business data services, mass market
broadband services, and numerous intermodal voice capabilities and
services. In practice, these obligations appear to both discourage the
deployment of next-generation
[[Page 473]]
networks and unnecessarily burden incumbent LECs.
A. Modernizing Unbundling Obligations for Today's Communications
Marketplace
2. Recognizing that the ``purpose of the Act is not to provide the
widest possible unbundling,'' but ``to stimulate competition--
preferably genuine, facilities-based competition,'' we seek comment on
how best to modernize incumbent LECs' remaining unbundling obligations.
While UNEs in some circumstances have provided a path for competitors
to enter markets they might not otherwise be able to have economically
justified entering, the Commission has long recognized that ``excessive
network unbundling requirements tend to undermine the incentives of
both incumbent LECs and new entrants to invest in new facilities and
deploy new technology.'' Therefore, the Commission has never viewed the
UNE obligations as being of infinite, or even indefinite, duration,
particularly in light of Congress's inclusion in the 1996 Act of the
means for the Commission to analyze the continued necessity of those
requirements. Indeed, Congress specifically contemplated a future time
when the continued need for section 251(c) unbundling obligations may
be reevaluated. Today's marketplace is characterized by robust
intermodal competition for voice and broadband services that may render
many remaining unbundling obligations unnecessary or even actively
harmful by impeding the deployment of and transition to more
technologically advanced networks and services. Our proposals in this
NPRM are informed by recent evidence demonstrating the availability of
intermodal competition, as well as specific Commission findings based
on comprehensive industry data that certain last mile loop and
transport unbundling obligations are no longer necessary. We
acknowledge, however, that there remains a digital divide between urban
areas, which boast increasing numbers of intermodal broadband
providers, and rural areas. Because UNEs may have continued benefits in
providing broadband access to Americans in rural areas--where achieving
scale is harder and thus competitive entry is harder--we propose to
maintain existing unbundling of mass market broadband-capable loops in
rural areas.
1. UNE Loops
3. Loops generally provide ``the last mile of a carrier's network
that enables the end-user to originate and receive communications.''
Incumbent LECs are required to provide unbundled access to three
general types of loop facilities: (1) DS1 and DS3 loops, (2) DS0 loops,
and (3) the TDM-capabilities, features, and functionalities of hybrid
copper/fiber loops. Incumbent LECs are also required to provide
unbundled access to 64 kbps voice-grade channels over fiber loops to
existing customers. Incumbent LECs must also provide unbundled access
to UNE Analog Loops in non-price cap incumbent LEC service areas. In
adopting loop unbundling requirements, the Commission clarified that
all loop types may be used ``across a range of customer categories''
and that the UNE requirements apply equally to all classes served. At
the same time, the Commission observed that the different types of loop
facilities ``as a practical matter, typically serve distinct classes of
customers, resulting in different economic considerations for
competitive carriers seeking to self-deploy.'' We factor these
observations and considerations, along with the ``reasonably efficient
competitor'' aspect of the impairment standard, into our proposals
below.
a. UNE DS1 and DS3 Loops
4. The Commission's rules require incumbent LECs to unbundle DS1
and DS3 loops, which are last-mile transmission facilities operating at
a total digital signal speed of 1.544 Mbps and 44.736 Mbps,
respectively. These loops, which are used primarily to serve enterprise
customers, are not available as UNEs in all locations. Rather, the
Commission limited the availability of UNE DS1 and DS3 Loops based on
``both a minimum number of business lines served by a wire center and
the presence of a minimum number of fiber-based collocators,'' noting
that ``[a] high concentration of business lines generally indicates a
likely concentration of large, multi-story commercial buildings,''
which a reasonably efficient competitor could serve by building its own
fiber-based facilities. Under our rules, the relevant thresholds for
unbundling differ as to DS1 loops and DS3 loops. UNE DS1 Loops are only
available ``to any building not served by a wire center with at least
60,000 business lines and at least four fiber-based collocators.'' UNE
DS3 Loops are only available ``to any building not served by a wire
center with at least 38,000 business lines and at least four fiber-
based collocators.'' The Commission also capped the availability of
unbundled DS1 and DS3 loops in a single building, recognizing that at
certain thresholds of total bandwidth demanded at a particular
location, it was feasible for competitive providers to self-provision
and thus no impairment existed.
5. We propose to find no impairment with respect to UNE DS1 and DS3
Loops in (1) counties served by price cap incumbent LECs found to be
competitive pursuant to the BDS Order; and (2) the study areas deemed
competitive as a result of our decision to allow certain rate-of-return
incumbent LECs to elect incentive regulation for their business data
services, subject to a narrow residential carve-out described below. We
do not include the ``Counties Deemed Grandfathered'' within our
category of BDS competitive counties. We refer collectively herein to
the BDS competitive counties and the competitive rate-of-return carrier
study areas as the BDS Competitive Counties and Study Areas. We seek
comment on this proposal.
6. Our proposal is based on the competitive findings in the BDS
Order and the RoR BDS Order. In the BDS Order, based on the most
extensive data collection that the Commission has ever undertaken, the
Commission concluded that ``[t]o a large extent in the business data
services market, the competition envisioned in the [1996 Act] has been
realized.'' It explained that incumbent LECs ``once dominated'' the
market by selling TDM-based DS1s and DS3s, but those services were
being eclipsed by packet-based services sold by incumbent LECs,
competitive LECs, cable providers, and other intermodal competitors.
The Commission developed a competitive market test for price cap
incumbent LECs' DS1 and DS3 services ``with the goal of promoting
innovation and investment and recognizing recent trends and
developments in the BDS marketplace'' and ``to determine which local
markets are sufficiently competitive to warrant deregulation.'' The
competitive market test deemed a price cap county competitive if either
(1) 50% of the buildings in the county with BDS demand were within a
half mile of a location served by competitive fiber, a distance at
which the Commission found competitive providers actively competed for
customers; or (2) 75% of census blocks within the county were served by
cable with a minimum offering of 10/1 Mbps, suggesting that the cable
provider had deployed sufficient capacity in its network to provide
business data services. The Commission found that 91.1% of locations
with business data services demand in price cap areas were deemed to be
sufficiently competitive to eliminate ex ante pricing regulation for
those services. It thus deemed 60% of
[[Page 474]]
price cap counties competitive for purposes of DS1 and DS3 channel
terminations and found the remaining 40% (largely in more rural areas)
non-competitive. The Commission subsequently adopted a similar
competitive market test for rate-of-return incumbent LECs that have
elected incentive regulation based on rate-of-return incumbent LEC
study areas. This test, based on the second prong of the BDS Order's
competitive market test, eliminated ex ante pricing regulation for DS1
and DS3 services in 16 rate-of-return study areas where cable providers
offered 10/1 Mbps or higher speeds to at least 75% of census blocks.
The Eighth Circuit affirmed the Commission's use of the competitive
market test in the BDS Order, including the test's reliance on the
competitive fiber facilities within a half mile and finding that cable
services are ``increasingly functioning as substitutes for BDS.''
7. We believe the BDS Order's findings eliminating ex ante pricing
regulation of DS1 and DS3 business data services are applicable to the
unbundling context. If we eliminate these specific UNEs in the BDS
Competitive Counties and Study Areas, DS1 and DS3 services will remain
available for purchase on a commercial basis as business data services.
We understand that there are no material operational or performance
distinctions between UNE DS1 and DS3 Loops and DS1 and DS3 business
data services. The Commission has previously found that these two types
of services are ``particularly close substitutes'' and thus are a part
of the same competitive environment. Do commenters agree? Is there any
meaningful difference between UNE DS1 and DS3 Loops and BDS DS1 and DS3
end user channel terminations or their terms of service, other than
pricing? Even if there is such a difference, does unbundled access to
UNE DS1 and DS3 Loops remain necessary in BDS Competitive Counties or
Study Areas in the current communications marketplace with its
extensive and increasing intermodal competition? In light of the
increasing demand for higher-bandwidth and packet-based data services
and the corresponding declining demand for DS1 and DS3 services, do DS1
and DS3 loops constitute reasonably efficient technology such that a
reasonably efficient competitor would rely on them to compete for BDS
customers?
8. Our proposal to find no impairment for DS1 and DS3 loops in BDS
Competitive Counties and Study Areas is also based on our findings
about the availability of competitive fiber in the BDS Remand Order. In
that Order, we calculated that within BDS Competitive Counties, more
than 94% of locations with BDS demand were served by incumbent LEC wire
centers within a half mile of competitive fiber, and more than 97% of
locations with BDS demand were either themselves within a half mile of
competitive fiber or served by an incumbent LEC wire center within a
half mile of competitive fiber. We reasoned that the data used in
making those findings likely understated competition given that ``cable
companies and other competitors frequently bypass ILEC networks
entirely.'' Moreover, the data underlying our analysis was collected in
2013, and ``competitive fiber providers have continued to build new
fiber routes in part to compete with incumbent LECs' BDS offerings.''
We thus propose to infer that the small fraction of enterprise
locations not within a half mile of competitive fiber or served by an
incumbent LEC wire center within a half mile of competitive fiber,
i.e., less than 3% of all enterprise locations in price cap incumbent
LEC counties, would face the same non-impairment conditions for
competitive providers. We seek comment on this reasoning.
9. In the BDS Order, the Commission found that the most appropriate
geographic measure at which to determine the competitiveness of DS1 and
DS3 end-user channel terminations was the county level, and we propose
to use that same approach here. Do commenters agree? Is there any
reason to base our analysis on a more granular geographic unit, e.g.,
based on wire centers served by competitive fiber, or some other
geographic area, rather than on counties? For example, should we find
that UNE DS1 and DS3 Loops should remain available in portions of BDS
Competitive Counties served by incumbent LEC wire centers more than a
half mile from competitive fiber? Are there different considerations
for UNE DS1 and DS3 Loops compared to business data services that would
warrant some type of exemption?
10. Proposed Exemption for Residential Broadband in Rural Areas. We
propose to narrowly exempt the availability of UNE DS1 Loops from any
unbundling relief such that UNE DS1 Loops will remain available for
residential broadband service along with telecommunications service in
rural census blocks. Although UNE DS1 and DS3 Loops are used largely to
serve enterprise customers, there is evidence in the record that some
competitive LECs use UNE DS1 Loops to provision broadband to
residential customers for whom no other broadband service is available
and the distance is too great to provision such service using DS0s. The
findings regarding DS1s and DS3s for the enterprise market may not
translate cleanly to the rural, residential market. We seek comment on
this view.
11. We believe this exemption would have benefits in maintaining
access to mass market broadband in rural areas that outweigh any
disincentives to next-generation network deployments by either
incumbent or competitive LECs and seek comment on that view. We seek
comment on the administrability of this proposed exemption. We believe
that incumbent LECs should be able to readily accommodate this proposed
exemption to our proposed finding of no impairment for enterprise use
in BDS Competitive Counties and Study Areas. Do commenters agree?
12. If we do carve out an exemption related to residential use,
should that exemption be limited to UNE DS1 Loops? We understand that
DS3 loops are not generally used for residential consumers. Are there
ever instances where UNE DS3 Loops are used to provide residential
broadband services? If so, should a similar exemption be provided to
serve mass market residential customers in rural census blocks within
BDS Competitive Counties and Study Areas where UNE DS3 loops are no
longer available for enterprise use?
13. Alternatives. As an alternative to our proposal to find non-
impairment for DS1 and DS3 loops in BDS Competitive Counties and Study
Areas, should we instead provide relief from unbundling requirements
for DS1 and DS3 loops based on a forbearance analysis? Specifically,
should we forbear from the unbundling requirements for DS1 and DS3
loops in the BDS Competitive Counties and Study Areas? We seek comment
on this alternative proposal and whether the three prongs of the
forbearance test would be satisfied. We believe the forbearance
criteria are met for the same service areas where we propose to find
non-impairment based on the same competitive findings and public
interest determinations made in the BDS Order and the RoR BDS Order. Do
commenters agree?
14. Or should we instead find that the market for UNE DS1 and DS3
Loops in the BDS Competitive Counties and Study Areas is ``sufficiently
competitive without the use of unbundling?'' The Commission in the
Triennial Review Remand Order made such a finding as to the long
distance and mobile wireless markets and thus declined to require that
UNEs be made available for the exclusive provision of these services.
Do the competitive findings in the BDS
[[Page 475]]
Order and the RoR BDS Order with respect to BDS services rise to the
same level as the Commission's findings in the Triennial Review Remand
Order as to the long distance and mobile wireless service markets? If
so, are they sufficient to conclude that incumbent LECs should no
longer be required to make DS1 and DS3 loops available on an unbundled
basis in BDS Competitive Counties and Study Areas?
b. UNE DS0 Loops
15. The Commission's rules require incumbent LECs to make UNE DS0
Loops available nationwide. These broadband-capable loops are used
primarily to serve mass market residential customers, in contrast to
UNE DS1 and DS3 Loops. UNE DS0 Loops are typically used to provide both
voice and broadband internet access service using various xDSL
technologies. We also note that some competitive LECs use DS0s to
provide Ethernet-over-copper and other higher-speed DSL service using
bonded DS0s to certain business customers. Where UNE DS0 Loops remain
available, competitive LECs may continue to use these loops for that
purpose.
16. We propose to find that competitive LECs are no longer impaired
without access to UNE DS0 Loops in urban census blocks. We base our
proposal on the relatively low and falling barriers to entry that
competitive providers face in providing broadband in urban areas,
particularly using alternative technologies. We may rely on the
availability of broadband in any forbearance or impairment analysis,
consistent with Congress's mandate in section 706 that we ``encourage
the deployment on a reasonable and timely basis of advanced
telecommunications capability to all Americans.'' While our rules
require competitive LECs to use UNEs to provision telecommunications
services, once they do so, they may use those same UNEs to provision
information services, i.e., broadband. By the same token, because
facilities-based broadband can be used to provide the same residential
services that can be provided with UNEs today, we rely on entry into,
and current competition within, the broadband marketplace in
considering whether impairment persists as to UNE DS0 Loops. Because
facilities-based broadband service provides residential consumers
similar (and typically more advanced) voice and internet access
capabilities to those that can be provided with UNE DS0 Loops, we rely
on evidence of entry into, and current competition within, the
broadband marketplace in considering whether impairment persists as to
UNE DS0 Loops in urban census blocks. Do commenters agree with this
approach? We recognize that rural areas present different deployment
considerations than urban areas and thus do not propose to include
rural census blocks in our proposed non-impairment finding.
17. Our proposal to find that competitive LECs are no longer
impaired in urban census blocks without access to UNE DS0 Loops relies
on the presence of nearly ubiquitous cable deployment in urban areas.
Cable providers make available facilities-based 25/3 Mbps internet
access service, which meets the Commission's definition of advanced
telecommunications capability, without the use of UNEs to 97% of
households in urban census blocks. Furthermore, 74% of households in
urban census blocks have at least two 25/3 Mbps providers, and 87% of
households in urban census blocks have at least two 10/1 Mbps
providers, generally the cable provider and the incumbent LEC, all
without the use of UNEs. These figures exclude satellite providers and
competitive LECs providing copper-based services. We assume any non-
incumbent LEC provider offering copper-based services uses UNEs. We
infer from this data that as cable continues to vigorously compete with
other wireline ISPs, cable providers will build out to the remaining
urban census blocks in the near future and similarly, competing
facilities-based wireline providers will upgrade their networks to
better compete with cable. We seek comment on this analysis.
18. Our proposal also relies on recent evidence demonstrating that
increasing numbers of competitors using wireless technologies are
entering the residential market for broadband services in urban areas
without the use of UNEs. For example, Verizon has announced plans to
deploy 5G-based fixed wireless service in 30 geographic markets, mostly
outside its incumbent LEC territory, Starry is deploying fixed wireless
service in major urban centers, and other WISPs are specifically
targeting urban customers as well. AT&T's CEO recently told investors
that over the next three to five years, ``unequivocally 5G will serve
as a . . . fixed broadband replacement product.'' These developments
are consistent with the observations in the 2018 Communications
Marketplace Report, where the Commission noted that advancements in
fixed wireless service technology will produce speeds that will
ultimately rival what can be offered by fiber. Indeed, even certain
parties opposing USTelecom's recent request for forbearance noted that
5G ``is ideally suited for urban areas with high building density.''
Relatedly, the Commission has long recognized that the costs for new
deployment are significantly lower in urban areas. Indeed, one of the
key assumptions of the Commission's Connect America Fund model, which
determines how scarce universal service funds are allocated for high-
cost areas, is that broadband deployment costs less in urban areas than
in rural areas. The Commission has also acted to lower barriers to
entry and thereby spur further intermodal competition by opening
additional spectrum for licensed and unlicensed uses, streamlining the
process of small cell siting, and modernizing pole attachment rules to
reduce the cost and time it takes to string fiber on poles. We propose
to find on the basis of these factors taken together that entry
barriers have been reduced and, in many areas, eliminated so
significantly that a reasonably efficient competitor is no longer
impaired without access to UNE DS0 Loops in urban census blocks and
that unbundling of DS0 loops in such areas is no longer warranted. We
seek comment on this proposal. Do commenters agree that the increasing
wireless broadband deployment and entry in urban areas constitute
evidence that a reasonably efficient competitor using reasonably
efficient technologies is not impaired without access to these UNEs?
19. In these urban areas where advanced services are available to
consumers from providers that do not rely on UNE DS0 Loops, we believe
a continued DS0 unbundling requirement will artificially and
unnecessarily slow the consumer transition away from services provided
over legacy copper loops to more advanced networks and services. We
therefore believe that eliminating DS0 unbundling in urban areas would
better advance the 1996 Act's goal of broadband deployment.
Furthermore, new entrants using fixed wireless and other technologies
may specifically target the relatively few urban areas with only one
25/3 Mbps provider as offering the most economically-feasible case for
entry, because of the density and relative lack of competition in these
areas, particularly if UNE DS0 Loops are no longer available. We seek
comment on these views.
20. We believe basing a finding of non-impairment at the urban
census block level would be administratively workable to implement as
both incumbent and competitive LECs are familiar with census block
metrics as a
[[Page 476]]
result of the Commission's Form 477 broadband deployment reporting
obligations, and urban versus rural census blocks are identifiable
based on the Census Bureau's publicly available designations. Do
commenters agree? If basing a non-impairment finding on census blocks
would raise administrative difficulties, how might we ease or address
them? Urban census blocks may be located either in urbanized areas or
urban clusters.
21. In proposing relief for UNE DS0 Loops, we do not propose to
distinguish between residential and enterprise services. We note that
within price cap counties that have been deemed competitive by the BDS
Order for business data services, including DS1 services, 95% of census
blocks with business demand had at least one competitive provider.
Based on the present record, we do not foresee a need that would
justify different treatment for UNE DS0 Loops based on their use. We
seek comment on this view.
22. Competitive LECs stated that they use broadband-capable UNE DS0
Loops to create new services not provided by incumbent LECs by bonding
multiple loops and/or placing their own electronics on them to provide
high-speed broadband and voice service to their customers. Competitive
LECs also commented that they use these loops as bridges to deployment
of next-generation networks, and asserted that no meaningful
alternatives for consumers exist for these loops. Incumbent LECs
asserted that they are developing or have already developed broadband
alternatives that may not have existed when the competitive LEC first
entered those areas. We seek comment on these competing assertions. Are
there urban census blocks where incumbent LECs currently only provide
legacy, or no, DSL service and where a competitive LEC supplies high-
speed broadband over UNE DS0 Loops? If so, where? And would granting
relief promote or deter additional investment in high-speed facilities
in such areas?
23. Some competitive LECs have contended that customer preference
for TDM-based and line-powered services supports maintaining unbundling
requirements, while incumbent LECs have argued that such preferences
are irrelevant to an analysis of whether to forbear from the UNE
regime. We concluded for purposes of our forbearance analysis in the
UNE Analog Loop and Avoided-Cost Resale Forbearance Order that ``we [ ]
are not persuaded that the Commission must `protect' every preference
some customers might have, especially in the face of alternative
options for obtaining voice services.'' Do different considerations
apply here? Should an impairment analysis consider the extent to which
our unbundling requirements may artificially protect users of legacy
technologies from market forces that would otherwise provide price
signals encouraging the transition to next-generation technologies?
24. Does evidence that incumbent LECs offered UNE-platform (UNE-P)
replacement products when the UNE-P obligation was eliminated support
incumbent LEC suggestions that they intend to offer UNE DS0 Loop
replacement products on a commercially negotiated basis? How, if at
all, should such a possibility factor into an impairment or forbearance
analysis?
25. Our current copper retirement rules permit incumbent LECs to
obtain relief from the unbundling requirements for DS0 loops by
deploying fiber or other next-generation networks and then retiring
their copper facilities pursuant to our network change disclosure
rules. Incumbent LECs may retire their copper facilities without the
need to seek our authorization. We seek comment on whether the
availability of this option has any bearing on the need for unbundling
relief. What impact, if any, does an incumbent LEC's ability to achieve
relief equivalent to forbearance have on competitive LEC incentives to
deploy their own facilities as expeditiously as possible? If an
incumbent LEC continues to maintain its copper facilities even after it
has deployed last-mile fiber, should those copper facilities remain
available to competitors via unbundling for the types of services
customers nevertheless continue to demand?
26. In forbearing from the UNE Analog Loop obligation, we noted
``the disincentive that continued unbundling mandates create for
competitors to invest in their own facilities-based networks and
transition their customers to next-generation services.'' Is there any
reason to believe that different considerations apply with respect to
UNE DS0 Loops? Does the economic cost of maintaining a DS0 unbundling
requirement outweigh any benefit of allowing customers to continue
relying on legacy services?
27. Alternatives. As an alternative to finding no impairment for
DS0 loops in urban census blocks, should we forbear from DS0 loop
unbundling requirements in urban census blocks with a minimum of 25/3
Mbps fixed service provided by at least two facilities-based,
terrestrial providers without the use of UNEs? We seek comment on this
alternative and the three prongs of the forbearance test. Is the
Commission's conclusion in the Restoring Internet Freedom Order that
the presence of two wireline internet service providers ``can be
expected to produce more efficient outcomes than any regulated
alternative'' relevant to our consideration in this context? If we were
to use this alternative test, would a census block-by-census block
forbearance decision be administrable from the standpoint of the
Commission and affected LECs? Or should we aggregate up our analysis to
a larger unit of measurement, such as counties?
28. For purposes of such a test, we would expect to include fixed
wireless providers, but note that fixed wireless penetration rates are
low in our most recent publicly available Form 477 data. Nonetheless,
recent developments in fixed wireless services have lowered the
barriers to entry by fixed wireless providers, and provided them with
the means of bringing effective competition to urban areas. We seek
comment on this analysis. Does the presence of fixed wireless providers
in a census block mean that barriers to entry are low (suggesting no
impairment of entry) or that competition is thriving (suggesting
forbearance is appropriate)?
29. In the UNE Analog Loop and Avoided-Cost Resale Forbearance
Order, we concluded that ``price cap LEC UNE Analog Loop obligations
are unnecessary to ensure that the charges for voice services are just
and reasonable.'' Do different considerations apply for UNE DS0 Loops
given their use for provisioning broadband service in addition to voice
service?
c. UNE Narrowband Voice-Grade Loops
30. Under our rules, incumbent LECs must provide three specific
types of unbundled narrowband voice-grade loops: UNE Analog Loops, 64
kbps voice-grade channels over last-mile fiber loops when an incumbent
LEC retires copper, and the TDM capabilities of hybrid loops. The
Commission forbore from new 64 kbps unbundling obligations in 2015 but
grandfathered existing users. Voice-grade loops are used almost
exclusively for the provision of voice-grade service, which we have
found customers are migrating away from in favor of IP- and wireless-
based voice services provided by multiple intermodal providers. These
include facilities-based fixed voice providers such as cable companies
providing VoIP, mobile wireless facilities-based providers and
resellers, and VoIP providers offering over-the-top services via
broadband.
31. We propose to eliminate these unbundling obligations nationwide
as competitors do not face significant
[[Page 477]]
barriers to entering the voice-service marketplace. Indeed, incumbent
LECs provided only about 12% of voice subscriptions in 2017. As we have
previously found, rather than a foothold for new entrants into the
marketplace, these legacy regulatory obligations have become a vice,
``trapping incumbent LECs into preserving outdated technologies and
services at the cost of a slower transition to next-generation networks
and services that benefit American consumers and businesses.'' We seek
comment on our specific proposals for each of the three types of
narrowband voice-grade copper loops described below.
32. In the alternative, should we instead find simply that the
marketplace for voice-grade loops is ``sufficiently competitive without
the use of unbundling'' as the Commission previously did for long-
distance and mobile services? The Commission declined to require that
UNEs be made available for the exclusive provision of long distance and
mobile wireless services based upon a finding that the marketplace for
those services was competitive without reliance on UNEs. Does the
degree of intermodal competition in today's voice marketplace support
finding that incumbent LECs should no longer be required to make UNEs
available for the exclusive provision of voice services?
33. UNE Analog Loops. We propose to extend the forbearance for UNE
Analog Loops to all remaining service areas where this unbundling
obligation still applies. In the recent USTelecom forbearance
proceeding, we granted relief from unbundling requirements for UNE
Analog Loops to price cap incumbent LECs in their service areas. We
propose extending this forbearance relief nationwide for the same
reasons we stated in the UNE Analog Loop and Avoided-Cost Resale
Forbearance Order, including the extensive intermodal competition
present in the voice marketplace, the harmful marketplace distortions
generated by outdated regulations, and the reduced incentives for both
incumbent and competitive LECs to invest in their own facilities and to
transition to next-generation networks. We seek comment on this
proposal.
34. Do the considerations in non-price cap areas differ from those
in price cap areas with respect to these UNEs that can only be used to
provision voice-grade service? Are any competitors purchasing these
UNEs to provide voice services in non-price cap areas where other voice
alternatives do not exist? Commenters should provide specific detail
whether: (1) Continued UNE Analog Loop requirements in non-price cap
areas remain necessary to ensure that the charges, practices,
classifications, or regulations are just and reasonable and are not
unjustly or unreasonably discriminatory; (2) continued UNE Analog Loop
requirements are necessary for the protection of consumers; and (3)
forbearance from UNE Analog Loop requirements is consistent with the
public interest.
35. Alternatively, should we find that competitors nationwide are
no longer impaired without access to UNE Analog Loops in the face of
the breadth of voice alternatives we described in the UNE Analog Loop
and Avoided-Cost Resale Forbearance Order? Our conclusions in that
Order were based on Form 477 data, which is collected on a nationwide
basis. Nevertheless, should we limit a non-impairment finding only to
price cap areas where we have previously forborne? If so, what is the
basis for such a limitation? We also seek comment on whether
competitors in non-price cap areas remain impaired without access to
these voice-grade only UNEs. Are there special or different
circumstances we should consider for evaluating impairment in non-price
cap incumbent LEC areas?
36. Grandfathered 64 kbps Fiber Loops. We propose to eliminate the
requirement that competitive LECs continue to receive unbundled access
to the previously grandfathered 64 kbps voice channels over fiber
loops. We propose to reach this outcome whether evaluated under the
impairment standard of section 251, the forbearance criteria of section
10, the general standards governing Commission action under provisions
such as sections 4, 201(b), and 303(r), or any combination thereof. We
seek comment on this proposal. The Commission forbore from this
requirement on a nationwide basis for all incumbent LECs in 2015,
finding this unbundling burden on fiber deployment to be
disproportionate to the ``very limited'' and decreasingly relevant
purpose the requirement serves--to protect narrowband voice competition
as networks transition from copper to fiber. At the same time, the
Commission grandfathered the obligation as to existing UNE 64 kbps
voice channels over fiber loops.
37. We propose to eliminate this grandfathered UNE 64 kbps voice
channel obligation for two reasons. First, we believe it potentially
delays the TDM-to-IP transition by locking incumbent LECs subject to
the grandfathering provision into continuing to provide TDM service
where they have upgraded their networks to fiber and advanced services
are available. Second, we believe the continued cost to incumbent LECs
of maintaining the legacy equipment and systems necessary to continue
to support this obligation solely to protect narrowband legacy voice is
no longer necessary in light of our prior findings about the state of
the voice services marketplace. We seek comment on these views.
Specifically, we seek comment on the effect the grandfathering
requirement continues to have on incumbent and competitive LEC
incentives to deploy next-generation networks and to transition
customers to next-generation services that are available over such
networks. In light of intermodal voice alternatives, would a reasonably
efficient competitor deploy a narrowband network to provide voice
service today?
38. To the extent competitors still rely on the grandfathered 64
kbps voice channel over fiber loops, we seek comment on whether such
competitors remain impaired without access to this grandfathered
requirement, and whether the three-part forbearance standard would be
met for the same reasons they are met with respect to our UNE Analog
Loop forbearance in price cap incumbent LEC service areas. We believe
that the respective costs already incurred by both incumbent and
competitive LECs with respect to this grandfathered requirement is
outweighed by the costs of continuing to obligate incumbent LECs to
maintain and support this legacy equipment and service, and the
societal costs that retaining this grandfathered unbundling obligation
has on the transition to IP-based networks and services. We seek
comment on this belief, including what role it should play in our
analysis. What benefits would be gained by eliminating this obligation?
Would competitive LECs or consumers be harmed by eliminating their
access to the grandfathered 64 kbps voice channel? Do any competitive
LECs still use the grandfathered 64 kbps voice channel?
39. TDM Capabilities of Hybrid Loops. Hybrid loops are local loops
``composed of both fiber optic cable, usually in the feeder plant, and
copper wire or cable, usually in the distribution plant.'' In the
Triennial Review Order, the Commission declined to order unbundling of
the packet-based capabilities of hybrid loops. Our rules currently
require that incumbent LECs unbundle either (1) a TDM voice-grade
capable 64 kbps channel or (2) a spare copper loop if the requesting
carrier seeks to provide narrowband services, and only the TDM
features, functions, and capabilities of hybrid loops if the
[[Page 478]]
requesting carrier seeks to provision broadband services.
40. For the same reasons we forbore from the UNE Analog Loop
requirement in price cap incumbent LEC areas, we do not believe that
UNE Hybrid Loops continue to be necessary for the provision of
narrowband voice service. We thus propose granting nationwide
forbearance from UNE Hybrid Loop requirements. We seek comment on this
proposal. Are there circumstances specific to these hybrid loops that
differ from UNE Analog Loops such that these unbundling requirements
remain necessary for provisioning voice service? Commenters should
provide specific detail why: (1) Continued UNE Hybrid Loop requirements
are necessary to ensure that the charges, practices, classifications,
or regulations are just and reasonable and are not unjustly or
unreasonably discriminatory; (2) continued UNE Hybrid Loop requirements
are necessary for the protection of consumers; and (3) forbearance from
UNE Hybrid Loop requirements is consistent with the public interest. Do
any competitive LECs today use the unbundled TDM capabilities of hybrid
loops to provision any broadband services?
41. We note that no commenter has claimed to use the TDM
capabilities of hybrid loops to provide broadband service. Is that
correct? To the extent that any hybrid loops are currently being used
to provide TDM-based broadband services, would nationwide relief for
hybrid loop unbundling requirements better promote the transition to
next-generation networks, including the replacement of the remaining
copper in hybrid loops with fiber? Do incumbent LECs have hybrid loops
in rural census blocks such that nationwide elimination of these UNEs
would eliminate consumer access to broadband in those areas? If so,
should we consider providing more limited geographic relief, such as
only in urban census blocks, consistent with our proposals for UNE DS0
Loops above?
42. Alternatively, we seek comment on whether we should find that
competitors are no longer impaired without unbundled access to the TDM-
capabilities, features, and functionalities of hybrid loops. In the
2003 Triennial Review Order, the Commission concluded that competitors
were impaired on a nationwide basis without access to these UNEs for
serving mass market customers. The Commission went on to note, however,
that this impairment would diminish over time as more and more fiber is
deployed. Has sufficient fiber been deployed in the sixteen years since
the Triennial Review Order such that competitors are no longer impaired
without access to UNE Hybrid Loops for the purpose of serving mass
market residential customers? In today's marketplace, would a
reasonably efficient competitor using reasonably efficient technology
seek to provide voice service using the TDM capabilities of hybrid
loops? Would a reasonably efficient competitor using reasonably
efficient technology seek to provide broadband service using the TDM
capabilities of hybrid loops? Recognizing that hybrid loops are an
important step in the deployment of fiber to the home, does any
continued unbundling obligation with respect to these loops, either for
broadband or narrowband services, threaten to frustrate deployment of
and transition to next-generation networks and services? Commenters
should specify whether any impairment or non-impairment faced by
competitors occurs on a nationwide basis or only in certain geographic
areas. Commenters should also provide data to support their
contentions.
d. Subloops
43. Subloops are portions of a loop or ``smaller included
segment[s] of an incumbent LEC's local loop plant.'' Subloops are
generally ordered with the intention of taking ``the competitor all the
way to the customer.'' Our rules impose UNE obligations for two types
of subloops--copper and multiunit premises subloops. Subloop unbundling
obligations only apply to incumbent LECs' distribution loop plant. The
Copper UNE Subloop is a portion of a copper loop, or hybrid loop,
comprised entirely of copper wire or copper cable that acts as a
transmission facility between any point of technically feasible access
in an incumbent LEC's outside plant and the end-user customer premises.
The Copper UNE Subloop includes inside wire owned or controlled by the
incumbent LEC and the features, functions, and capabilities of the
copper loop. Incumbent LECs must provide competitive LECs unbundled
access to Copper UNE Subloops for the provision of narrowband and
broadband services.
44. The Commission's rules separately address Multiunit Premises
UNE Subloops due to previously-found specific ``impairments associated
with facilities-based entry in multiunit buildings or campus
environments.'' Incumbent LECs must offer unbundled access to these
subloops necessary to access wiring at or near a multiunit customer
premises, i.e., all incumbent LEC loop plant between the minimum point
of entry at a multiunit premises and the point of demarcation. Unlike
Copper UNE Subloops, the Multiunit Premises UNE Subloop includes the
entirety of the loop plant regardless of the capacity level or type of
loop the requesting carrier will provision to its customer, that is,
including fiber or hybrid loops. Some competitive LECs state that they
use Multiunit Premises UNE Subloops to ``access loops otherwise
unavailable because of fiber feeder.'' The Multiunit Premises UNE
Subloop also includes any inside wiring owned and controlled by the
incumbent LEC.
45. We propose to forbear or find no impairment with respect to UNE
Subloops in the particular instances or geographic areas where we
propose to eliminate the underlying loop to the customer's premises,
either by forbearance or finding no impairment. We seek comment on this
proposal. We base our proposal on the same factors and reasoning upon
which we propose relief applicable to each of the underlying Copper UNE
Loops discussed above. We do not believe the public interest would be
served by maintaining Copper UNE Subloops in areas where the end-to-end
UNE Loop obligations have been eliminated. We seek comment on this
view.
46. We believe competitive LECs' ability to serve their current
customer base with their own facilities-based network will be
unaffected if we eliminate Copper UNE Subloop obligations, noting that
incumbent LECs indicate that they sell a negligible number of Copper
UNE Subloops. Do commenters agree? If not, commenters should specify
which types of services, customers, and geographic areas they believe
our Copper UNE Subloop unbundling proposal would impact. If these
unbundled subloops are eliminated, will incumbent LECs still provide
competitive LECs access to subloops on a commercial basis to the extent
such access is sought? Are there alternatives for competitive LECs to
reach their end-user customers if we eliminate Copper UNE Subloop
obligations? We also believe that eliminating Copper UNE Subloops in
the same instances where we propose to eliminate the underlying UNE
Loop obligation will be administratively feasible. Do commenters agree?
If not, how might we ease any administrative difficulties?
47. We seek more specific comment on the Multiunit Premises UNE
Subloop. We note that these particular unbundling obligations largely
came about to address issues related to facilities-based competitors
accessing the customer's location where access to
[[Page 479]]
the premises was controlled or managed by someone other than the
customer. Should we treat the Multiunit Premises UNE Subloop
differently from the Copper UNE Subloop? Competitive LECs assert that
special barriers still exist to accessing multiunit premises. Are they
correct, and if so, do such barriers justify retaining unbundled access
to subloops for multiunit premises wiring? Are these barriers
independent of accessing the Multiunit Premises UNE Subloop, such that
retaining this unbundled element would still not enable competitive
LECs to access customers in such premises? Are there alternatives to
Multiunit Premises UNE Subloops to access multiunit premises? Do the
Commission's rules prohibiting LECs from entering into exclusive access
contracts with the owners of residential and commercial multi-tenant
environments make unbundled access to these subloops unnecessary? We
seek comment on any issues we should consider in evaluating the extent
to which Multiunit Premises UNE Subloops should remain available on an
unbundled basis to best further the objectives of the Act.
2. UNE Dark Fiber Transport
48. Dark fiber transport is deployed fiber optic cable between
incumbent LEC wire centers that has not been ``lit'' through the
addition of optronic equipment that would make it capable of carrying
telecommunications. This dark fiber facility is typically referred to
as ``interoffice dark fiber.'' The Commission's transport unbundling
rules define when an incumbent LEC is required to unbundle its
interoffice dark fiber and make it available to a requesting carrier.
Where so obligated, the incumbent LEC must lease its unlit fiber,
subject to availability, enabling the competitive LEC to use such dark
fiber as if it were part of its own fiber network. Thus, after
deploying its own electronics to light the dark fiber, the competitive
LEC is able to provision service to end users served from the wire
center to which the unbundled dark fiber transport terminates.
49. In the Triennial Review Remand Order, the Commission applied
the impairment standard to limit the extent to which incumbent LECs are
required to provide UNE Dark Fiber Transport. The Commission concluded
that competitive LECs are not impaired without access to UNE Dark Fiber
Transport when both wire centers are classified as either Tier 1 or
Tier 2, reasoning that on such routes, ``a reasonably efficient
competitor has, or could, duplicate the facilities of the incumbent
LEC.'' For purposes of UNE Dark Fiber Transport, a Tier 1 wire center
has at least four fiber-based collocators or at least 38,000 business
lines, or both. A Tier 2 wire center is one that does not qualify as
Tier 1 but has at least three fiber-based collocators or at least
24,000 business lines, or both. All other wire centers are Tier 3. As a
result, all UNE Dark Fiber Transport that is leased today involves at
least one Tier 3 wire center end point. Tier 3 wire centers are all
wire centers that are not classified as Tier 1 or Tier 2 wire centers.
The Commission has described Tier 3 wire centers as those that ``show a
generally low likelihood of supporting actual or potential competitive
transport deployment.'' We refer to these Tier 3 wire centers as ``UNE
triggering'' wire centers.
50. In the recent UNE Transport Forbearance Order, we unanimously
forbore from UNE DS1/DS3 Transport obligations for price cap incumbent
LECs at wire centers within a half mile of competitive fiber. We
concluded that the presence of nearby competitive fiber creates a
sufficiently dynamic marketplace as to protect competition and
consumers as well as further the public interest, and forbearance was
therefore warranted.
51. Consistent with the analysis in the UNE Transport Forbearance
Order, we propose finding that competitive LECs are not impaired
without access to unbundled dark fiber transport to wire centers that
are within a half mile of alternative fiber. The wire centers that we
propose would no longer be subject to UNE Dark Fiber Transport
obligations are those for which the Commission granted forbearance from
UNE DS1/DS3 Transport obligations in the UNE Transport Forbearance
Order. We seek comment on this proposal. Our proposal is based on
concluding that a reasonably efficient competitor within a half mile of
alternative fiber would not be impaired without access to UNE Dark
Fiber Transport because it should be able to obtain such transport, if
available, on a commercial basis at competitive rates, or by building
its own transport network. In the BDS Order, the Commission assumed
that the presence of a second wireline provider, in addition to the
incumbent LEC, is sufficient to discipline prices for transport in
areas with high fixed costs. We affirmed this finding in the BDS Remand
Order. We infer that this same assumption would apply with respect to
dark fiber assuming both the incumbent LEC and the second provider
having the nearby competitive fiber network each have dark fiber
available for lease. Is this assumption reasonable? Our proposal is
also informed by the Commission's observation in the Triennial Review
Remand Order that ``competing carriers that use UNE Dark Fiber
transport actively seek out wholesale alternatives to the incumbent
LEC's fiber facilities.'' Does this observation still hold?
52. Our forbearance analysis in the UNE Transport Forbearance Order
relied on the proximity of a price cap incumbent LEC wire center to
competitive lit fiber. Commenters in that proceeding claimed that lit
fiber is no commercial substitute for dark fiber. However, we do not
propose to consider the substitutability of lit and dark fiber to be
relevant in an impairment analysis. While the Commission has previously
differentiated lit from dark fiber, that has no bearing on the fact
that the existence of a nearby fiber network suggests the ability of a
reasonably efficient competitor to self-provision its own fiber network
in competition with the incumbent LEC, regardless of whether that
network owner offers lit fiber services or dark fiber facilities. We
seek comment on whether our conclusion that the existence of a nearby
competitive fiber network within a half mile necessarily implies an
ability of at least one reasonably efficient competitor having the
ability to deploy its own fiber such that we can reasonably infer no
impairment for other competitors.
53. We also seek comment on whether we should supplement the list
of incumbent LEC wire centers for which we propose to find non-
impairment for UNE Dark Fiber Transport by adding any Tier 3 wire
centers that are within a half mile--or potentially some longer
distance--of Tier 1 or Tier 2 wire centers. Could we infer no
impairment as to these wire centers, due to the proximity of either
fiber-based competitors or business line density at the nearby Tier 1
and Tier 2 wire centers? We note that in the BDS Order, the Commission
observed that competitive providers sometimes build ``more circuitous
route[s] in anticipation of additional demand'' than the existing
incumbent LEC's route between wire centers. Moreover, we are cognizant
of the USTA II court's discussion of how we must consider ``facilities
deployment along similar routes when assessing impairment.'' Should we
consider this as a separate stand-alone proposal for unbundling relief
from UNE Dark Fiber Transport obligations? We observe that some wire
centers that are classified as Tier 3 facilities are apparently located
in urban areas, which would suggest similar business line density and
the likely presence of nearby Tier 1 or Tier 2 wire centers. If we were
to undertake
[[Page 480]]
a one-time analysis to supplement the list based on existing Tier 3
wire centers, we do not believe this would be administratively
difficult. Do commenters agree? Could we rely on the wire center
locations as set forth in the Local Exchange Routing Guide to determine
the necessary geocoordinates to conduct such an analysis? Are there
other publicly available sources that would provide better wire center
location information? We ask commenters to generally comment on any
administrative burdens associated with wire centers for the purposes of
this supplemental proposal.
54. Are there other alternative criteria upon which we should base
an impairment analysis? For example, should we find that competitive
LECs are not impaired without access to UNE Dark Fiber Transport at
Tier 3 wire centers where some threshold percentage of end users served
by the wire center has access to at least two facilities-based
providers at 25/3 Mbps without the use of UNEs? If so, should we
exclude satellite and mobile service providers from counting as a
facilities-based provider for this test? We would consider fixed
wireless to the extent we do in our other residential competitive
tests, as discussed above. Should we conclude that a reasonably
efficient competitor that serves such end users could secure its own
transport services without the benefit of UNE Dark Fiber Transport
because at least one other non-incumbent LEC facilities-based provider
has been able to serve end users without access to UNE Dark Fiber
Transport? Are there advantages and disadvantages to using this test?
Is it reasonable to infer that a confirmed 25/3 Mbps end user in a
service area indicates the existence of transport alternatives to
support a finding of non-impairment? What would be the appropriate
number of, or percentage of, subscribers served by an individual wire
center for us to make this determination? Should we aggregate
subscribers at multiple wire centers in a geographic area? Is it
necessary for the Commission to identify all Tier 3 wire centers ex
ante, before concluding whether a finding of non-impairment is
appropriate, and, if so, through what public sources would the
Commission be able to create a comprehensive list of such wire centers?
55. Or, should we extend forbearance to UNE Dark Fiber Transport
obligations for the same wire centers subject to our UNE DS1/DS3
Transport forbearance? What factors would differ in considering
forbearance for unbundled dark fiber transport from forbearance for lit
unbundled transport? In its 2018 forbearance petition, USTelecom
initially sought nationwide forbearance relief from all transport
unbundling obligations, including UNE Dark Fiber Transport. Before
USTelecom withdrew its request for forbearance from UNE Dark Fiber
Transport obligations, commenters provided sharply contrasting views as
to whether the forbearance standard could be met for granting such
relief.
56. Incumbent LECs generally disputed the relevance of UNE Dark
Fiber Transport in today's marketplace, pointing to how few such UNEs
are leased from the largest incumbent providers. Verizon, for example,
claimed that it both buys a de minimis amount of UNE Dark Fiber
Transport and sells very small volumes. USTelecom described competitive
LECs' use of UNE Dark Fiber Transport as playing a ``negligible role in
the marketplace.'' Moreover, USTelecom observed that the four largest
incumbent LECs leased only 20,000 to 60,000 combined UNE Dark Fiber
Transport miles to competitive LECs, compared to nearly 12 million dark
fiber transport miles that were made available via commercial leasing.
Incumbent LECs also dispute that UNE Dark Fiber Transport is primarily
used by competitive LECs to reach end users in rural areas. For those
competitive LECs that rely on UNE Dark Fiber Transport to provision
service to a substantial number of end users, CenturyLink reasoned that
such demand would justify deployment of its own facilities.
57. Competitive LECs, on the other hand, argued that access to UNE
Dark Fiber Transport was essential to the provision of new service,
often in rural markets. For example, one competitive LEC described its
network buildout strategy, which first requires collocation in the
incumbent LEC's central office followed by connection to its existing
facilities-based network using UNE Dark Fiber Transport. This
competitive LEC emphasized that its use of UNE Dark Fiber Transport
required investment in collocation and optronics to operationalize the
leased UNE Dark Fiber Transport. Other commenters contended that
competitive LECs use UNE Dark Fiber Transport as ``the critical middle-
mile fiber to connect to their own last-mile facilities.'' We seek
comment generally on all of these assertions and the potential
application of section 10 forbearance criteria to UNE Dark Fiber
Transport.
3. Other UNEs
a. Network Interface Devices
58. The network interface device, or NID, which is always located
at the customer's premises, is defined as any means of interconnecting
the incumbent LEC's distribution plant to wiring at a customer premises
location. Apart from its obligation to provide the NID functionality as
part of an unbundled loop or subloop, an incumbent LEC must also offer
nondiscriminatory access to the NID on an unbundled, stand-alone basis
to requesting carriers for the purpose of connecting the competitor's
own loop facilities. Forbearance from this obligation would necessarily
coincide with and follow our forbearance proposals related to loops and
subloops and previous forbearance grants related to loops. An incumbent
LEC must permit a requesting carrier to connect its own loop facilities
to on-premises wiring through the incumbent LEC's NID. The NID is a
terminal endpoint for loops. The need for unbundled access to an
incumbent LEC's NID arose to address scenarios, typically in multiunit
locations, where access to the inside wire on the premises was
controlled by a premises owner that did not want additional NIDs
installed on their premises, or a customer had no need for a duplicate
NID.
59. Based on the record developed in the USTelecom forbearance
proceeding, we propose to forbear from the UNE NID obligation because
it appears that stand-alone NIDs are not necessary for competitive LECs
to access potential customers. Competitive and incumbent LECs have
described substantially changed circumstances in the last two-plus
decades such that this network element may no longer serve any
meaningful purpose. Competitive carriers are on record stating that
``[a]s a practical matter, [they] do not purchase network interface
device elements separate from unbundled loops.'' AT&T is also on record
stating it sells no UNE NIDs. We seek comment on our view that the lack
of stand-alone UNE NIDs indicates that the obligation is not necessary
to ensure just and reasonable rates and to protect consumers, thus
justifying forbearance.
60. How often do competitive carriers use this UNE obligation to
have access to stand-alone NIDs? How many stand-alone NIDs are
currently purchased from incumbent LECs? Are there still cases where
customer premises wire is not part of the incumbent LEC's network,
i.e., not an inside wire subloop, and the NID is the sole means of
accessing this customer premise's
[[Page 481]]
wire? If we eliminate UNE loop and subloop obligations, would
competitive providers need to acquire access to NIDs on a stand-alone
basis, and if so, are there competitive alternatives to this network
element? In the absence of an unbundling obligation, would incumbent
LECs still provide access to NIDs? As an alternative to forbearing from
this requirement, should we instead find that competitive LECs are not
impaired without access to NIDs? If so, on what basis could we make a
finding of no impairment?
b. Operations Support Systems
61. Incumbent LECs must offer nondiscriminatory access to their
operations support systems, or OSS, for qualifying services on an
unbundled basis. OSS consists of pre-ordering, ordering, provisioning,
maintenance and repair, and billing functions supported by an incumbent
LEC's databases and information. The Commission previously found that
the UNE OSS ``requirement includes an ongoing obligation on the
incumbent LECs to make modifications to existing OSS as necessary to
offer competitive carriers nondiscriminatory access and to ensure that
the incumbent LEC complies with all of its network element, resale and
interconnection obligations in a nondiscriminatory manner.'' OSS is
used for the provision of other UNEs, and it is also a separate stand-
alone UNE that is used for interconnection and other purposes,
including number porting. The Commission required incumbent LECs to
provide OSS on an unbundled basis in the Triennial Review Order because
it found that ``these functions are essential for carriers to serve
mass market and enterprise customers'' and competitive LECs providing
these services are ``impaired on a national basis without access to
OSS.''
62. We propose to forbear from the standalone OSS unbundling
obligation--i.e., when used for purposes other than managing other
UNEs--because we believe its very limited use in today's marketplace is
evidence that this standalone UNE is not necessary to ensure either
just and reasonable rates or consumer protection and forbearance would
be consistent with the public interest. We seek comment on this
proposal. CenturyLink asserts that ``OSS are naturally coupled to the
availability of the UNEs they support.'' Does access to this UNE remain
necessary to facilitate deployment of competitive carrier networks? How
does this UNE obligation differ from other UNE obligations, and should
it be treated differently than UNE loop and transport obligations,
which may require more intrusive sharing of incumbent LEC networks?
63. If we were to eliminate the UNE OSS obligation, are there any
alternative OSS providers on which competitive LECs could rely, to the
extent they need to do so? We seek comment on the assertions by TPx and
Socket that they rely on UNE OSS to serve their non-UNE based
customers. We also seek comment on whether OSS as a UNE is necessary
for competitive LECs and other providers subject to number porting
obligations. Is there a more efficient way to provide nondiscriminatory
access to OSS? Alternatively, regardless of whether the statutory
elements for forbearance are met, are competitive LECs impaired without
OSS, and should we make a finding of no impairment?
4. Other Considerations
64. For each network element or requirement discussed above, we
seek comment on whether requesting carriers are no longer impaired
without access to the element or requirement under section 251(d)(2),
or whether the forbearance criteria are met under section 10. We also
seek comment on whether additional considerations beyond impairment or
forbearance would justify our proposals, or any alternatives, for each
network element or requirement discussed above.
65. In particular, the D.C. Circuit has held that the Commission
must ``take into account not only the benefits but also the costs of
unbundling (such as discouragement of investment in innovation),''
which the Commission has done ``with the costs of unbundling brought
into the analysis under Sec. 251(d)(2)'s `at a minimum' language.''
For example, when evaluating unbundling previously, the Commission has
weighed the effects of unbundling on Congress's exhortation in section
706 of the 1996 Act that it ``encourage the deployment on a reasonable
and timely basis of advanced telecommunications capability to all
Americans'' by removing barriers to infrastructure investment. The
Commission more recently also has cited other potential costs or harms
of unbundling when addressing requests for relief from a number of
legacy wireline mandates imposed on incumbent LECs stemming from the
1996 Act. Such requirements can force incumbent LECs to maintain
outdated TDM equipment even when they no longer desire to offer those
services to their customers, undercutting the benefits of technology
transitions. They can also distort the marketplace by imposing
unnecessary costs on one class of competitors alone. The Commission has
also reiterated Justice Breyer's observation that ``mandatory
unbundling comes at a cost, including disincentives to research and
development by both incumbent LECs, competitive LECs and the tangled
management inherent in shared use of a common resource.'' In addition,
these requirements can create disincentives for competitors to invest
in their own facilities-based networks and transition their customers
to next-generation services. We seek comment on the full range of those
and any other relevant considerations and how they should affect our
analysis regarding each network element or requirement discussed above.
66. Additionally, to the extent that the Commission has cited a
given network element or requirement discussed above as a continuing
obligation that would remain when granting past regulatory forbearance,
we seek comment on how that should affect our analysis here. Given that
forbearance petitions are addressed based on the record compiled in the
relevant proceeding, we do not believe such past citations should alter
our actions in this proceeding or require the continued imposition of
particular requirements if the record here persuades us that relief is
warranted. We seek comment on that view.
67. Conversely, we seek comment on how other aspects of our
regulatory framework--such as the continued applicability of rate
regulations for DS1s and DS3s in certain areas, the imposition of a
reasonable comparability benchmark for voice services in areas
supported by our high-cost Universal Service Fund, or the continuing
obligation of all local exchange carriers ``not to prohibit, and not to
impose unreasonable or discriminatory conditions or limitations on, the
resale of its telecommunications services''--should weigh in our
analysis. We also seek comment more generally on the impact of
Commission policy changes, including the recently concluded USTelecom
forbearance proceeding, on the voice and broadband marketplace.
68. In addition to a number of specific proposals discussed above,
we also seek comment on alternative approaches for relief with respect
to each network element or requirement discussed above, either through
the impairment standard under section 251(d)(2) or forbearance under
section 10. For example, is relief justified in a broader or narrower
range of geographic areas? Are there different competitive conditions
than those identified above that should inform our grant of relief,
[[Page 482]]
and if so, how should that relief be tailored to those competitive
conditions? We note that some commenters request that we defer further
unbundling relief until we complete the process of revising our
broadband mapping data collection. In addition, are there
considerations flowing from the network deployment by incumbent LECs
and/or competitive LECs in a given area--such as the extent of the
providers' progress in implementing technology transitions--that should
inform the scope of, and triggers for, relief? Further, how should
administrability concerns inform the scope and mechanics of any relief
we grant? We also seek comment on whether special considerations apply
to small businesses with respect to each of our proposals above.
B. Avoided-Cost Resale
69. Except where we have forborne from such obligations, incumbent
LECs must make available at regulated wholesale rates
telecommunications services that they make available to their own non-
carrier retail customers. In the UNE Analog Loop and Avoided-Cost
Resale Forbearance Order, we granted price cap incumbent LECs relief
from the Avoided-Cost Resale requirement. Some parties effectively seek
reconsideration of our decision to forbear from the Avoided-Cost Resale
obligations granted in the UNE Analog Loop and Avoided-Cost Resale
Forbearance Order, rehashing arguments made in the record of that
proceeding. In this NPRM, we do not revisit the decisions made in the
UNE Analog Loop and Avoided-Cost Resale Forbearance Order, but we will
consider those commenters' arguments filed in the record here to the
extent that they bear on the issues raised in this proceeding.
70. We propose to extend to non-price cap incumbent LEC service
areas the forbearance previously granted with respect to Avoided-Cost
Resale in price cap incumbent LEC service areas. We seek comment on
this proposal. We base our proposal on the same reasons we stated for
granting such forbearance to price cap LECs--i.e., ``the breadth of the
voice service marketplace and the number of wholesale input
alternatives to competitive LECs seeking to continue serving customers
currently served by Avoided-Cost Resale.''
71. Are there reasons why non-price-cap areas may differ from price
cap areas with respect to the Avoided-Cost Resale requirement that is
only used to provision voice-grade service? What have been the effects
of the forbearance granted for Avoided-Cost Resale in the UNE Analog
Loop and Avoided-Cost Resale Forbearance Order? Commenters should
provide specific detail as to why continued Avoided-Cost Resale
requirements in non-price cap areas are or are not necessary (1) to
ensure that charges, practices, classifications, or regulations are
just and reasonable and are not unjustly or unreasonably
discriminatory; (2) to ensure the protection of consumers; and (3) to
serve the public interest. We also seek comment on the respective costs
and benefits of this proposal versus retaining the status quo, as well
as whether special considerations apply to small businesses.
C. Cost-Benefit Analysis
72. For the purpose of conducting a cost-benefit analysis of the
various proposals and alternatives for which we seek comment in this
NPRM, as to each network element or requirement addressed herein, we
seek comment on how many UNEs or Avoided-Cost resold services are
currently being purchased, and at what prices. In the absence of
unbundling and resale obligations, we seek comment on what proportion
of these arrangements would likely shift to alternative commercial
services offered by incumbent LECs or other competitors, or would be
self-provisioned, and at what prices or costs. If commenters expect
that prices for commercial alternatives for UNEs or resold services
will be higher or lower than the current rates, we seek comment on why
that would be so. If competitive LECs were to self-provision UNE
replacements, how should we estimate their market prices?
73. What are the expected impacts to investment of each network
element or requirement discussed above? If incumbent LECs or
competitive LECs increase their investment in fiber or next-generation
services as result of any relief, how should we account for such
increased investment in any cost-benefit analysis? To the extent that
the elimination of certain UNEs and resold services would have economic
effects on end users, we seek comment as to the magnitude of these
effects and how we should quantify them. For example, how can we
quantify the benefits of migrating users to next-generation services or
higher speed networks? Should we confine our analysis to consumers that
currently rely on UNEs or resold services (presumably indirectly) or
take into account the network effects that migrations to new networks
could have on all consumers?
74. We also seek comment on the benefits of lower compliance costs
for incumbent LECs and other parties, and any other benefits and costs
of our proposed actions. More generally, for each network element or
requirement discussed above, we seek comment on the respective costs
and benefits of particular alternative rules or approaches as compared
to retaining the current unbundling requirement.
D. Transition Plan
75. We propose, for all UNE and Avoided-Cost Resale relief that we
provide, a three-year transition period for existing customers. We seek
comment on whether we should include a six-month transition period for
new orders, and if so, for what elements of relief. We seek comment on
this proposal.
76. Our proposal is consistent with the UNE Transport Forbearance
Order and the UNE Analog Loop and Avoided-Cost Resale Order, both of
which provide three-year transition periods. In those orders, we
reasoned that three years was sufficient ``to fully ensure that current
and potential competition plays its expected role'' to ensure just and
reasonable rates, and for competitive LECs ``to replace their embedded
base of legacy TDM customer premises equipment and other increasingly
obsolete TDM-based peripheral devices with new IP-capable equipment.''
Similarly, the BDS Order provided a uniform transition period of three
years to allow existing customers to facilitate their transition to
alternative facilities or arrangements. Here, consistent with those
orders, we also propose a three-year transition for any eliminated UNE
and Avoided-Cost Resale obligations, whether we grant such relief
through a finding of non-impairment or through forbearance. We believe
that this transition period supplies the necessary incentives for both
incumbent and competitive LECs alike to deploy their own next-
generation networks as expeditiously as possible, while ensuring that
end users do not experience undue service disruption.
77. What conditions, if any, should apply to a transition period?
Are there special circumstances that require longer or shorter
transition periods for any particular UNEs? Should we provide different
transition periods for UNEs that we grant relief for based on a non-
impairment finding vs. those based on forbearance? What about for
Avoided Cost Resale? Should we provide a longer grandfathering period
for Puerto Rico, for reasons similar to the unique Puerto Rico
transition periods adopted in our recent forbearance orders?
78. We recognize that the transition mechanism is simply a default
process
[[Page 483]]
and carriers remain free to negotiate alternative arrangements
superseding this transition period. Any transition mechanism would not
replace or supersede any commercial arrangements carriers have reached
for the continued provision of facilities or services.
79. Alternatively, we seek comment on a transition period that is
shorter than three years for existing customers. In the BDS Order, the
Commission found that the presence of a nearby potential BDS competitor
would be expected to provide reasonably competitive outcomes for DS1
and DS3 services over three to five years. In the UNE Transport
Forbearance Order, we concluded that ``connecting nearby fiber . . . is
unlikely to take a full three years for any individual alternative
transport link,'' but also noted that two years had elapsed since the
BDS Order and a three-year transition would coincide with the outer
bound of the Commission's three to five year expectation in the BDS
Order; in the UNE Analog Loop and Avoided-Cost Resale Order, we noted
that a three-year period was consistent with prior Commission action
and ``should provide more than enough time for competitive LECs and
their customers to transition.'' Should we set a transition deadline of
August 2, 2022, which would align the transition period with those of
the UNE Transport Forbearance Order and the UNE Analog Loop and
Avoided-Cost Resale Order? If so, should we tie this shorter transition
period to only some relief or all relief granted? What are the
administrative benefits of syncing the transitions? Are such benefits
outweighed by what would be a shorter transition for those UNE and
Avoided-Cost Resale obligations that we seek comment on today?
80. We note that in the Triennial Review Remand Order, after
finding non-impairment, the Commission provided a transition period of
twelve months for high-capacity loops and DS1 and DS3 transport for
existing customers and eighteen months for UNE Dark Fiber Transport for
existing customers. What, if any, weight should we place on this prior
transition timeframe with respect to current UNE obligations that are
eliminated through a finding of non-impairment? Commenters should
provide any other input or considerations that should factor into our
transition timeframe determinations.
II. Initial Regulatory Flexibility Analysis
81. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), the Commission has prepared this Initial Regulatory
Flexibility Analysis (IRFA) of the possible significant economic impact
on small entities by the policies and rules proposed in this Notice of
Proposed Rulemaking (NPRM). The Commission requests written public
comments on this IRFA. Comments must be identified as responses to the
IRFA and must be filed by the deadlines for comments provided on the
first page of the NPRM. The Commission will send a copy of the NPRM,
including this IRFA, to the Chief Counsel for Advocacy of the Small
Business Administration (SBA). In addition, the NPRM and IRFA (or
summaries thereof) will be published in the Federal Register.
A. Need for, and Objectives of, the Proposed Rules
82. In the NPRM, we propose to modernize our unbundling and related
rules for local loops and dark fiber transport, as well as other types
of network elements. Specifically, the Commission proposes to eliminate
UNE DS1 and DS3 loop obligations in counties and study areas deemed
competitive in the BDS Order and the RoR BDS Order, UNE loops in urban
census blocks, unbundled dark fiber transport to wire centers that are
within a half mile of alternative fiber, UNE subloops in the particular
instances or geographic areas where we propose to find no impairment
for UNE DS0 loops for the underlying loop to the customer's premises,
the UNE Analog Loop obligation where it still applies, the unbundling
requirement for the narrowband frequencies of hybrid loops, the stand-
alone UNE network interface device (NID) obligation, the operations
support systems (OSS) unbundling obligation, except in the case where
it is used for managing other UNEs, and avoided-cost resale obligations
in non-price cap areas.
B. Legal Basis
83. The legal basis for any action that may be taken pursuant to
the NPRM is contained in sections 1 through 4, 10, and 201, 202, and
251 of the Communications Act of 1934, as amended, 47 U.S.C. 151
through 154, 160, 201, 202, and 251.
C. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
84. The RFA directs agencies to provide a description of, and where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules and by the rule revisions on which the
NPRM seeks comment, if adopted. The RFA generally defines the term
``small entity'' as having the same meaning as the terms ``small
business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small-business concern'' under the Small Business
Act. A ``small-business concern'' is one which: (1) Is independently
owned and operated; (2) is not dominant in its field of operation; and
(3) satisfies any additional criteria established by the SBA.
1. Total Small Entities
85. Small Businesses, Small Organizations, Small Governmental
Jurisdictions. Our actions, over time, may affect small entities that
are not easily categorized at present. We therefore describe here, at
the outset, three broad groups of small entities that could be directly
affected herein. First, while there are industry specific size
standards for small businesses that are used in the regulatory
flexibility analysis, according to data from the SBA's Office of
Advocacy, in general a small business is an independent business having
fewer than 500 employees. These types of small businesses represent
99.9% of all businesses in the United States which translates to 30.2
million businesses.
86. Next, the type of small entity described as a ``small
organization'' is generally ``any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.''
Nationwide, as of August 2016, there were approximately 356,494 small
organizations based on registration and tax data filed by nonprofits
with the Internal Revenue Service (IRS).
87. Finally, the small entity described as a ``small governmental
jurisdiction'' is defined generally as ``governments of cities, towns,
townships, villages, school districts, or special districts, with a
population of less than fifty thousand.'' U.S. Census Bureau data from
the 2012 Census of Governments indicates that there were 90,056 local
governmental jurisdictions consisting of general purpose governments
and special purpose governments in the United States. Of this number
there were 37,132 general purpose governments (county, municipal and
town or township) with populations of less than 50,000 and 12,184
special purpose governments (independent school districts and special
districts) with populations of less than 50,000. The 2012 U.S. Census
Bureau data for most types of governments in the local government
category shows that the majority of these governments have populations
of less than 50,000. Based
[[Page 484]]
on these data we estimate that at least 49,316 local government
jurisdictions fall in the category of ``small governmental
jurisdictions.''
2. Broadband Internet Access Service Providers
88. Internet Service Providers (Broadband). Broadband Internet
service providers include wired (e.g., cable, DSL) and VoIP service
providers using their own operated wired telecommunications
infrastructure fall in the category of Wired Telecommunication
Carriers. Wired Telecommunications Carriers are comprised of
establishments primarily engaged in operating and/or providing access
to transmission facilities and infrastructure that they own and/or
lease for the transmission of voice, data, text, sound, and video using
wired telecommunications networks. Transmission facilities may be based
on a single technology or a combination of technologies. The SBA size
standard for this category classifies a business as small if it has
1,500 or fewer employees. U.S. Census data for 2012 show that there
were 3,117 firms that operated that year. Of this total, 3,083 operated
with fewer than 1,000 employees. Consequently, under this size
standard, the majority of firms in this industry can be considered
small.
3. Wireline Providers
89. Wired Telecommunications Carriers. The U.S. Census Bureau
defines this industry as ``establishments primarily engaged in
operating and/or providing access to transmission facilities and
infrastructure that they own and/or lease for the transmission of
voice, data, text, sound, and video using wired communications
networks. Transmission facilities may be based on a single technology
or a combination of technologies. Establishments in this industry use
the wired telecommunications network facilities that they operate to
provide a variety of services, such as wired telephony services,
including VoIP services, wired (cable) audio and video programming
distribution, and wired broadband internet services. By exception,
establishments providing satellite television distribution services
using facilities and infrastructure that they operate are included in
this industry.'' The SBA has developed a small business size standard
for Wired Telecommunications Carriers, which consists of all such
companies having 1,500 or fewer employees. Census data for 2012 show
that there were 3,117 firms that operated that year. Of this total,
3,083 operated with fewer than 1,000 employees. Thus, under this size
standard, the majority of firms in this industry can be considered
small.
90. Incumbent Local Exchange Carriers (Incumbent LECs). Neither the
Commission nor the SBA has developed a small business size standard
specifically for incumbent LEC services. The closest applicable size
standard under SBA rules is for the category Wired Telecommunications
Carriers as defined above. Under that size standard, such a business is
small if it has 1,500 or fewer employees. According to Commission data,
3,117 firms operated in that year. Of this total, 3,083 operated with
fewer than 1,000 employees. Consequently, the Commission estimates that
most providers of incumbent local exchange service are small businesses
that may be affected by the rules and policies adopted. A total of
1,307 firms reported that they were incumbent local exchange service
providers. Of this total, an estimated 1,006 have 1,500 or fewer
employees.
91. Competitive Local Exchange Carriers (Competitive LECs),
Competitive Access Providers (CAPs), Shared-Tenant Service Providers,
and Other Local Service Providers. Neither the Commission nor the SBA
has developed a small business size standard specifically for these
service providers. The appropriate NAICS Code category is Wired
Telecommunications Carriers, as defined above. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
U.S. Census data for 2012 indicate that 3,117 firms operated during
that year. Of that number, 3,083 operated with fewer than 1,000
employees. Based on this data, the Commission concludes that the
majority of Competitive LECS, CAPs, Shared-Tenant Service Providers,
and Other Local Service Providers, are small entities. According to
Commission data, 1,442 carriers reported that they were engaged in the
provision of either competitive local exchange services or competitive
access provider services. Of these 1,442 carriers, an estimated 1,256
have 1,500 or fewer employees. In addition, 17 carriers have reported
that they are Shared-Tenant Service Providers, and all 17 are estimated
to have 1,500 or fewer employees. Also, 72 carriers have reported that
they are Other Local Service Providers. Of this total, 70 have 1,500 or
fewer employees. Consequently, based on internally researched FCC data,
the Commission estimates that most providers of competitive local
exchange service, competitive access providers, Shared-Tenant Service
Providers, and Other Local Service Providers are small entities.
92. We have included small incumbent LECs in this present RFA
analysis. As noted above, a ``small business'' under the RFA is one
that, inter alia, meets the pertinent small business size standard
(e.g., a telephone communications business having 1,500 or fewer
employees), and ``is not dominant in its field of operation.'' The
SBA's Office of Advocacy contends that, for RFA purposes, small
incumbent LECs are not dominant in their field of operation because any
such dominance is not ``national'' in scope. We have therefore included
small incumbent LECs in this RFA analysis, although we emphasize that
this RFA action has no effect on Commission analyses and determinations
in other, non-RFA contexts.
93. Interexchange Carriers (IXCs). Neither the Commission nor the
SBA has developed a definition for Interexchange Carriers. The closest
NAICS Code category is Wired Telecommunications Carriers as defined
above. The applicable size standard under SBA rules is that such a
business is small if it has 1,500 or fewer employees. U.S. Census data
for 2012 indicates that 3,117 firms operated during that year. Of that
number, 3,083 operated with fewer than 1,000 employees. According to
internally developed Commission data, 359 companies reported that their
primary telecommunications service activity was the provision of
interexchange services. Of this total, an estimated 317 have 1,500 or
fewer employees. Consequently, the Commission estimates that the
majority of IXCs are small entities that may be affected by our
proposed rules.
94. Local Resellers. The SBA has developed a small business size
standard for the category of Telecommunications Resellers. The
Telecommunications Resellers industry comprises establishments engaged
in purchasing access and network capacity from owners and operators of
telecommunications networks and reselling wired and wireless
telecommunications services (except satellite) to businesses and
households. Establishments in this industry resell telecommunications;
they do not operate transmission facilities and infrastructure. Mobile
virtual network operators (MVNOs) are included in this industry. Under
that size standard, such a business is small if it has 1,500 or fewer
employees. Census data for 2012 show that 1,341 firms provided resale
services during that year. Of that number, all operated with fewer than
1,000 employees. Thus, under this category and the associated small
[[Page 485]]
business size standard, the majority of these prepaid calling card
providers can be considered small entities.
95. Other Toll Carriers. Neither the Commission nor the SBA has
developed a definition for small businesses specifically applicable to
Other Toll Carriers. This category includes toll carriers that do not
fall within the categories of interexchange carriers, operator service
providers, prepaid calling card providers, satellite service carriers,
or toll resellers. The closest applicable NAICS Code category is for
Wired Telecommunications Carriers as defined above. Under the
applicable SBA size standard, such a business is small if it has 1,500
or fewer employees. Census data for 2012 show that there were 3,117
firms that operated that year. Of this total, 3,083 operated with fewer
than 1,000 employees. Thus, under this category and the associated
small business size standard, the majority of Other Toll Carriers can
be considered small. According to internally developed Commission data,
284 companies reported that their primary telecommunications service
activity was the provision of other toll carriage. Of these, an
estimated 279 have 1,500 or fewer employees. Consequently, the
Commission estimates that most Other Toll Carriers are small entities
that may be affected by rules adopted pursuant to the Second Further
Notice.
96. Operator Service Providers (OSPs). Neither the Commission nor
the SBA has developed a small business size standard specifically for
operator service providers. The appropriate size standard under SBA
rules is for the category Wired Telecommunications Carriers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. According to Commission data, 33 carriers have reported that
they are engaged in the provision of operator services. Of these, an
estimated 31 have 1,500 or fewer employees and two have more than 1,500
employees. Consequently, the Commission estimates that the majority of
OSPs are small entities.
4. Wireless Providers--Fixed and Mobile
97. Wireless Telecommunications Carriers (except Satellite). This
industry comprises establishments engaged in operating and maintaining
switching and transmission facilities to provide communications via the
airwaves. Establishments in this industry have spectrum licenses and
provide services using that spectrum, such as cellular services, paging
services, wireless internet access, and wireless video services. The
appropriate size standard under SBA rules is that such a business is
small if it has 1,500 or fewer employees. For this industry, U.S.
Census data for 2012 show that there were 967 firms that operated for
the entire year. Of this total, 955 firms had employment of 999 or
fewer employees and 12 had employment of 1000 employees or more. Thus
under this category and the associated size standard, the Commission
estimates that the majority of wireless telecommunications carriers
(except satellite) are small entities.
98. According to internally developed Commission data, 413 carriers
reported that they were engaged in the provision of wireless telephony,
including cellular service, Personal Communications Service, and
Specialized Mobile Radio Telephony services. Of this total, an
estimated 261 have 1,500 or fewer employees, and 152 have more than
1,500 employees. Thus, using available data, we estimate that the
majority of wireless firms can be considered small.
99. Wireless Communications Services. This service can be used for
fixed, mobile, radiolocation, and digital audio broadcasting satellite
uses. The Commission defined ``small business'' for the wireless
communications services (WCS) auction as an entity with average gross
revenues of $40 million for each of the three preceding years, and a
``very small business'' as an entity with average gross revenues of $15
million for each of the three preceding years. The SBA has approved
these definitions.
100. Wireless Telephony. Wireless telephony includes cellular,
personal communications services, and specialized mobile radio
telephony carriers. The closest applicable SBA category is Wireless
Telecommunications Carriers (except Satellite). Under the SBA small
business size standard, a business is small if it has 1,500 or fewer
employees. For this industry, U.S. Census Bureau data for 2012 show
that there were 967 firms that operated for the entire year. Of this
total, 955 firms had fewer than 1,000 employees and 12 firms had 1000
employees or more. Thus under this category and the associated size
standard, the Commission estimates that a majority of these entities
can be considered small. According to Commission data, 413 carriers
reported that they were engaged in wireless telephony. Of these, an
estimated 261 have 1,500 or fewer employees and 152 have more than
1,500 employees. Therefore, more than half of these entities can be
considered small.
101. All Other Telecommunications. ``All Other Telecommunications''
is defined as follows: This U.S. industry is comprised of
establishments that are primarily engaged in providing specialized
telecommunications services, such as satellite tracking, communications
telemetry, and radar station operation. This industry also includes
establishments primarily engaged in providing satellite terminal
stations and associated facilities connected with one or more
terrestrial systems and capable of transmitting telecommunications to,
and receiving telecommunications from, satellite systems.
Establishments providing internet services or voice over internet
protocol (VoIP) services via client-supplied telecommunications
connections are also included in this industry. The SBA has developed a
small business size standard for ``All Other Telecommunications,''
which consists of all such firms with gross annual receipts of $35
million or less. For this category, census data for 2012 show that
there were 1,442 firms that operated for the entire year. Of these
firms, a total of 1,400 had gross annual receipts of less than $25
million. Consequently, we estimate that the majority of All Other
Telecommunications firms are small entities that might be affected by
our action.
D. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities
102. The NPRM propose changes to, and seeks comment on, the
Commission's unbundling and related rules for local loops and dark
fiber transport, as well as other types of network elements. The
objective of the proposed modifications is to encourage the deployment
of next-generation networks and unburden incumbent LECs where there is
substantial evidence of facilities-based competition and market entry.
Beyond the benefits that providers will enjoy from a decreased
regulatory burden on their day-to-day operations, these changes would
not affect the reporting, recordkeeping, and other compliance
requirements of carriers, some of which are small entities.
E. Steps Taken To Minimize the Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
103. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its proposed approach,
which may include the following four alternatives (among others): (1)
The establishment of differing compliance or reporting
[[Page 486]]
requirements or timetables that take into account the resources
available to small entities; (2) the clarification, consolidation, or
simplification of compliance and reporting requirements under the rules
for such small entities; (3) the use of performance rather than design
standards; and (4) an exemption from coverage of the rule, or any part
thereof, for such small entities.
104. The rule changes proposed by the NPRM would reduce the
economic impact and market distortions of the Commission's unbundling
rules on incumbent LECs and would increase the incentives for incumbent
LECs and new entrants to invest in new facilities and deploy new
technologies. We seek comment as to any additional economic burden
incurred by small entities that may result from the rule changes
proposed in the NPRM.
F. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
105. None.
III. Procedural Matters
106. Paperwork Reduction Act of 1995 Analysis. This document does
not contain proposed information collection(s) subject to the Paperwork
Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore,
it does not contain any new or modified information collection burden
for small business concerns with fewer than 25 employees, pursuant to
the Small Business Paperwork Relief Act of 2002, Public Law 107-198,
see 44 U.S.C. 3506(c)(4).
107. Initial Regulatory Flexibility Analysis. An initial regulatory
flexibility analysis (IRFA) is set forth above. Comments to the IRFA
must be identified as responses to the IRFA and filed by the deadlines
for comments on the Notice of Proposed Rulemaking. The Commission will
send a copy of the Notice of Proposed Rulemaking, including the IRFA,
to the Chief Counsel for Advocacy of the Small Business Administration.
108. Ex Parte Information. This proceeding shall be treated as a
``permit-but-disclose'' proceeding in accordance with the Commission's
ex parte rules. Persons making ex parte presentations must file a copy
of any written presentation or a memorandum summarizing any oral
presentation within two business days after the presentation (unless a
different deadline applicable to the Sunshine period applies). Persons
making oral ex parte presentations are reminded that memoranda
summarizing the presentation must list all persons attending or
otherwise participating in the meeting at which the ex parte
presentation was made, and summarize all data presented and arguments
made during the presentation. If the presentation consisted in whole or
in part of the presentation of data or arguments already reflected in
the presenter's written comments, memoranda, or other filings in the
proceeding, the presenter may provide citations to such data or
arguments in his or her prior comments, memoranda, or other filings
(specifying the relevant page and/or paragraph numbers where such data
or arguments can be found) in lieu of summarizing them in the
memorandum. Documents shown or given to Commission staff during ex
parte meetings are deemed to be written ex parte presentations and must
be filed consistent with section 1.1206(b) of the Commission's rules.
In proceedings governed by section 1.49(f) of the Commission's rules or
for which the Commission has made available a method of electronic
filing, written ex parte presentations and memoranda summarizing oral
ex parte presentations, and all attachments thereto, must be filed
through the electronic comment filing system available for that
proceeding, and must be filed in their native format (e.g., .doc, .xml,
.ppt, searchable .pdf). Participants in this proceeding should
familiarize themselves with the Commission's ex parte rules.
IV. Ordering Clauses
109. Accordingly, it is ordered that, pursuant to sections 1
through 4, 10, 201, 202, and 251 of the Communications Act of 1934, as
amended, 47 U.S.C. 151 through 154, 160, 201, 202, and 251, this Notice
of Proposed Rulemaking is adopted.
110. It is further ordered that the Commission's Consumer &
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Notice of Proposed Rulemaking, including the Initial
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of
the Small Business Administration.
List of Subjects in 47 CFR Part 51
Communications common carriers, Telecommunications.
Federal Communications Commission.
Marlene Dortch,
Secretary.
Proposed Rule
For the reasons discussed in the preamble, the Federal
Communications Commission proposes to amend 47 CFR part 51 as follows:
PART 51--INTERCONNECTION
0
1. The authority citation for part 51 continues to read as follows:
Authority: 47 U.S.C. 151 through 155, 201 through 205, 207
through 209, 218, 225 through 227, 251 through 252, 271, 332 unless
otherwise noted.
0
2. Amend Sec. 51.319 by:
0
a. Revising paragraph (a)(1);
0
b. Removing paragraph (a)(3)(iii)(C); and
0
c. Revising paragraphs (a)(4)(i), (a)(5)(i), (b), and (d)(2)(iv).
The revisions read as follows:
Sec. 51.319 Specific unbundling requirements.
(a) * * *
(1) Copper loops. An incumbent LEC shall provide a requesting
telecommunications carrier with nondiscriminatory access to the copper
loop in census blocks defined as rural by the Census Bureau on an
unbundled basis. A copper loop is a stand-alone local loop comprised
entirely of copper wire or cable. Copper loops include two-wire and
four-wire analog voice-grade copper loops, digital copper loops (e.g.,
DS0s and integrated services digital network lines) as well as two-wire
and four-wire copper loops conditioned to transmit the digital signals
needed to provide digital subscriber line services, regardless of
whether the copper loops are in service or held as spares. The copper
loop includes attached electronics using time division multiplexing
technology, but does not include packet switching capabilities as
defined in paragraph (a)(2)(i) of this section. The availability of DS1
and DS3 copper loops is subject to the requirements of paragraphs
(a)(4) and (5) of this section.
* * * * *
(4) * * * (i) Subject to the cap described in paragraph (a)(4)(ii)
of this section, an incumbent LEC shall provide a requesting
telecommunications carrier with nondiscriminatory access to a DS1 loop
on an unbundled basis to any building not served by a wire center with
at least 60,000 business lines and at least four fiber-based
collocators. Once a wire center exceeds both the business line and
fiber-based collocator thresholds, no future DS1 loop unbundling will
be required in that wire center. In addition, a DS1 loop only is
available to a building located in one or more of the following: (A)
Any county or portion of a county served by a price cap incumbent LEC
that is not included on the list of counties that have been
[[Page 487]]
deemed competitive pursuant to the competitive market test established
under 49 CFR 69.803; (B) any study area served by a rate-of-return
incumbent LEC provided that study area is not included on the list of
competitive study areas pursuant to the competitive market test
established under 47 CFR 61.50; or (C) any census block defined as
rural by the Census Bureau if being requested solely to serve
residential customers. A DS1 loop is a digital local loop having a
total digital signal speed of 1.544 megabytes per second. DS1 loops
include, but are not limited to, two-wire and four-wire copper loops
capable of providing high-bit rate digital subscriber line services,
including T1 services.
* * * * *
(5) DS3 loops. (i) Subject to the cap described in paragraph
(a)(5)(ii) of this section, an incumbent LEC shall provide a requesting
telecommunications carrier with nondiscriminatory access to a DS3 loop
on an unbundled basis to any building not served by a wire center with
at least 38,000 business lines and at least four fiber-based
collocators. Once a wire center exceeds the business line and fiber-
based collocator thresholds, no future DS3 loop unbundling will be
required in that wire center. In addition, a DS3 loop only is available
to a building located in one of the following: (A) Any county or
portion of a county served by a price cap incumbent LEC that is not
included on the list of counties that have been deemed competitive
pursuant to the competitive market test established under 49 CFR
69.803; or (B) any study area served by a rate-of-return incumbent LEC
provided that study area is not included on the list of competitive
study areas pursuant to the competitive market test established under
47 CFR 61.50. A DS3 loop is a digital local loop having a total digital
signal speed of 44.736 megabytes per second.
* * * * *
(b) Subloops. An incumbent LEC shall provide a requesting
telecommunications carrier with nondiscriminatory access to subloops on
an unbundled basis in accordance with section 251(c)(3) of the Act and
this part and as set forth in paragraph (b) of this section, provided
that the underlying loop is available as set forth in paragraph (a) of
this section.
* * * * *
(d) * * *
(2) * * *
(iv) Dark fiber transport. Dark fiber transport consists of
unactivated optical interoffice transmission facilities. Incumbent LECs
shall unbundle dark fiber transport between any pair of incumbent LEC
wire centers except where, through application of tier classifications
described in paragraph (d)(3) of this section, where both wire centers
defining the route are either Tier 1, Tier 2, or a Tier 3 wire center
identified on the list of wire centers that has been found to be within
a half mile of alternative fiber pursuant to the Report and Order on
Remand and Memorandum Opinion and Order in WC Docket No. 18-14, FCC 19-
66 (released July 12, 2019). An incumbent LEC must unbundle dark fiber
transport if a wire center on either end of a requested route is a Tier
3 wire center that is not on the published list of wire centers.
* * * * *
[FR Doc. 2019-27607 Filed 1-3-20; 8:45 am]
BILLING CODE 6712-01-P
