FCC Proposes Killing Phone Network Unbundling, Resale Regs

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The FCC voted Friday to consider elimination of unbundling mandates for phone networks meant to promote competition in underserved areas. The vote was 3-2. The Republican majority said new technologies provide plenty of competition to justify deregulation. The Democrats dissented, and suggested a slower approach.

The agency adopted these requirements to implement market-opening provisions of the Telecommunications Act of 1996. But since then, local telephone companies, known as incumbent local exchange carriers (LECs), have gone from monopolists to providing only 12 percent of all voice service subscriptions across all technologies. 

In the broadband marketplace, incumbent LECs are just one of many competitors, providing 20 percent of residential broadband subscriptions at or above 25/3 Mbps. Now, legacy copper voice services face competition from cable, voice over internet protocol, fixed wireless, and mobile wireless services. Also, the advent of 5G wireless services promises to change the way consumers access broadband. 

These facilities-based competitive alternatives provide more advanced service capabilities than legacy copper networks. Where this competition exists, there may no longer be a need to require incumbent LECs to unbundle, or share, elements of their legacy networks with competitors at regulated rates, according to the agency.

Among other things, the FCC proposes in the notice to grant non-price cap incumbent LECs relief from the requirement that they resell their retail legacy telecommunications services at statutorily prescribed rates. The agency granted large, price-cap incumbent LECs this relief earlier this year.

November 26, 2019             

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