FCC review order retains optical incentives

22 August 2003 Washington, DC Lightwave -- The Federal Communications Commission (FCC) finally issued its long-delayed Triennial Review Order yesterday. While it retains the UNE-P unbundling restrictions the former regional Bell operating companies were hoping would disappear, the 576-page document does grant them a virtual monopoly on fiber-based broadband networks, as well as the broadband aspects of hybrid fiber/copper infrastructures.

Aug 22nd, 2003

22 August 2003 Washington, DC Lightwave -- The Federal Communications Commission (FCC) finally issued its long-delayed Triennial Review Order yesterday. While it retains the UNE-P unbundling restrictions the former regional Bell operating companies were hoping would disappear, the 576-page document does grant them a virtual monopoly on fiber-based broadband networks, as well as the broadband aspects of hybrid fiber/copper infrastructures.

The ex-Bells also will not be forced to share lit OC-n fiber-based pathways in the local loop, in particular where dark fiber or other access alternatives are available. However, that dark fiber must be unbundled for use by competitive carriers.

In making its determination that the incumbents can retain exclusive use of optical infrastructure deployed for packet-based services and other broadband offerings (they must provide access to 64-kbit/sec pathway for competitive narrowband services when they replace copper loops with fiber), the FCC said it was working to stimulate construction of next-generation broadband infrastructure. On the one hand, the incumbents will be more willing to invest in fiber networks if they are assured that they won't have to share them, the commission believes. On the other, competitive carriers will be more likely to build their own optical infrastructures if their access to the incumbents' plant is limited.

The perception that both incumbents and competitors are basically starting from scratch when it comes to fiber-to-the-home (FTTH) underlies the FCC's position. Relying on information from Corning (whose executives wrote several letters to the FCC on the FTTH question), the FCC believes that only 47 communities in the United States "enjoy widespread FTTH deployment." Within these communities says Corning, competitive carriers have deployed fiber loops to 44,890 homes, compared to the incumbents' 4,000 (and only 400 of these are the work of the ex-Bells); municipalities account for loops to 18,100 homes. Thus, since the commissioners assume that installation costs and regulatory barriers are relatively equal for incumbents and competitors alike, neither camp is seen to have an advantage when it comes to FTTH. Therefore, the FCC appears to believe that there is no reason to make the incumbents share infrastructure when competitors have an equal opportunity to build it themselves or buy dark fiber wholesale.

The order states that the FCC recognized that this ruling could give the incumbents the ability to shut out competitors by replacing existing copper loops with fiber in the name of broadband networking. Therefore, when incumbents do overbuild copper infrastructure, they have the option of either granting competitors enough bandwidth over the new plant to provide narrowband services, or keeping the old copper infrastructure open for use.

Sharing of hybrid networks, including those using digital loop carriers (DLCs), follow a similar logic. Incumbents must enable competitors to offer narrowband services, but do not have to share the capabilities that support packet-based services. Specifically, the order says that incumbents do not need to unbundled any transmission path over optical plant between the central office and the customer's premises (including the fiber feeder plant) that is used to transmit packet-based services. Similarly, the incumbents also do not have to share any electronics or other equipment used to transmit such packet-based services, including xDSL-capable line cards installed in DLCs or equipment used to provide passive optical network (PON) capabilities to the mass market.

The complete order, as well as comments from each of the commissioners, is available on the FCC's Web site. Michael Copps was the only commissioner to attack the optical broadband policy as anti-competitive. However, significant dissension arose concerning the UNE-P requirements as well as the role of state public utility commissions in enforcing the order.

-- Stephen Hardy

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