FCC lifts rules for Verizon broadband

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Author: WildC@rd

The U.S. Federal Communications Commission on Monday freed Verizon Communications's lucrative business broadband data service from some regulations, in a decision critics said could hurt customers.

The No. 2 U.S. telecommunications carrier petitioned the FCC seeking relief from requirements that included making connections to competing networks and negotiating just and reasonable terms for its services.

FCC Chairman Kevin Martin announced the decision to a conference sponsored by Comptel, which represents Verizon's competitors in providing high-speed data services like Ethernet and Internet-based virtual private networks.

The lack of any FCC action to modify Verizon's request allowed it to take effect.

Martin, a Republican, said he had favored granting most of the petition to help promote the deployment of broadband.

The commission's two Democrats objected to broad deregulation, saying it threatened higher prices and less choice.

The decision could pave the way for other dominant local telephone companies, such as AT&T and BellSouth, to seek similar relief. It could also hurt carriers such as Time Warner Telecom and XO Communications, which often buy services from Verizon on a wholesale basis to serve business customers.

The agency decision will likely face court challenges by Verizon's competitors.

In its filings with the FCC, Verizon cited an analyst report that put the value of the whole business telecommunications market at roughly $150 billion. It is unclear how much Verizon will benefit from the relief.

"I had proposed as a result of the Verizon forbearance petition that the commission go ahead and act on the petition providing a lot of the relief they had asked for," Martin told the Comptel conference.

The regulations lifted on Verizon also include those that safeguard customer privacy, ensure access to those with disabilities and provide recourse when allegations of discrimination are made.

"The impact of this petition...is that outdated regulation on broadband services is lifted allowing greater flexibility in offering sophisticated high-capacity services in the highly competitive enterprise market," said Susanne Guyer, Verizon senior vice president for federal regulatory affairs.

The granting of the Verizon petition angered some.

"I thought the job of the regulator was to regulate, not to sit on the sidelines and let the industry create its own laws," Carl Grivner, XO's chief executive officer, said.

The FCC's two Democratic commissioners expressed dismay at what they described as a major FCC policy shift that would hurt small businesses.

"In effect, we provide industry the pen and give it the go-ahead to rewrite the law," FCC Commissioner Michael Copps said.

Jonathan Adelstein, the commission's other Democrat, said the action helped one company at the expense of virtually everyone else and could jeopardize the Universal Service Fund.

"This course raises the specter of price hikes and fewer choices for businesses, banks, universities, government agencies and other high volume users of communications services, in addition to consumers in Rural America," Adelstein said.

Verizon would no longer be required to contribute a portion of its business broadband revenues to the Universal Service Fund, which subsidizes communications for rural and low-income households.

But after his speech, Martin told reporters the decision would not likely have much of an impact, because Verizon had made a commitment to continuing contributing to the fund.

Comptel had argued lifting the regulations would hobble competition and unfairly benefit one company.

"As a result, competition and consumers are now at the mercy of Verizon's financial self-interest," said Comptel CEO Earl Comstock.