|The only publication dedicated to OSS Volume 1, Issue 2 - June 2004|
By Joshua E. Barbach
The U.S. Appeals Court, D.C. decision that vacated much of the FCC's Triennial Review Order took effect June 15. In March, the Appeals Court overturned the FCC's guidelines on UNE rates, and delegated rate-making responsibility to the states. The White House, the FCC, and the U.S. Supreme Court all chose not to stand in the way as the standing structure for wholesale rates expired. Should the Supreme Court continue not to act, it will retard much of the momentum gained since 1996 toward real consumer choice in telecommunications. U.S. corporations and taxpayers are instead more likely to experience the results of a restored oligopoly in telecom.
Lobbying Catches Up with Wholesale
SBC seemed to have won a major victory when a law that would have allowed it to nearly double its wholesale rates was passed in Illinois on May 10, 2003. SBC's proposed amendment would have required the Illinois Commerce Commission (ICC) to change the way it set prices. The bill passed through the General Assembly was signed into law by Governor Rod Blagojevich in only four days. Chicago Mayor Daley, who was present on the day of the vote, denied having any influence on its outcome. Just a few days later, on May 13, 2003, the ICC granted SBC long distance approval in Illinois. SBC was enjoying its victories, but the wholesale law was short-lived. A U.S. District Court Judge, on June 9, 2003, overturned Illinois' rate decision, stating it was "an intrusion into federal law and [was] clearly inconsistent with it."
A Notorious Feast
The allegations resulting from the November dinner gained strength when it was revealed that the FCC invited the RBOCs, AT&T and WorldCom (MCI) to negotiations the final weekend of May. The stated goal was to get AT&T, WorldCom and at least one or two of the RBOCs to agree in principle on a wholesale pricing scheme for UNEs. CLECs that wished to be involved in the negotiations were specifically excluded. This brings into question the credibility and fairness of these negotiations, given that a significant percentage of the affected parties were left out of the discussion. This kind of exclusivity may suggest favoritism and may indicate that the efforts of lobbying-focused Bell leaders like Daley have been successful.
Daley: His Work Is Done Here
What is certain, given the history of the rulings for which they've lobbied, is the RBOCs' intent to protect their monopolistic strangle-hold on U.S. access networks. An old quote from a Bell Atlantic executive vice president is revealing. "Prices today do not reflect the cost of connecting to the network - they need to,'' Mr. Newport of Bell Atlantic said in December of 1984, less than a year after divestiture. AT&T's RBOC subsidiaries controlled 80 percent of the local market prior to divestiture. According to the most recent FCC release, the RBOCs control 84 percent of the local access market today.
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