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    You may remember that in March 2006, when the FCC had only four commissioners, a Verizon petition to have all common-carriage-type requirements lifted from its relationships with businesses was “deemed granted” by the Commission’s silence — split 2-2, the Commission said nothing by the deadline for action on that petition. This non-action was part of a steady, incremental removal of rules from highspeed access in the U.S. that is still going on.

    There were a couple of news items recently that relate to this subject. First, the D.C. Circuit today heard argument on a challenge to the notion that “deemed granted” could be the end of the story. According to Blair Levin and his team (sorry, no link), the panel seemed skeptical that silence meant denial of the petition. But the judges also weren’t sure how to review a record of silence, and may send the thing back to the Commission for something a little noisier.

    Also, AT&T’s petition for “forbearance” from common carriage obligations for many of its business relationships (excusing AT&T from having to state what its fees will be for internet access services provided to businesses, and avoiding rate of return regulation generally for these relationships), was largely granted by the Commission last week. This forbearance applies to most of the services AT&T offers to businesses, including its very-high-capacity “OCn” (optical carrier lines, involving thousands of voice grade equivalents) fiber-optic interoffice transport connections, packetized broadband, Frame Relay services, ATM services, LAN services, Ethernet-based services, video transmission services, and wave-based services, but not traditional DS1 and DS3 special-access circuits.

    AT&T argued that the market for these connections is highly competitive. Would-be ISPs (who would like to pay standardized fees for these services) argued that AT&T hadn’t provided the Commission with enough evidence supporting their claims, particularly in connection with the definition of “the market” (is it a collection of regional markets, or a national market?). The Commission didn’t seem to mind the lack of evidence. Here’s a good indication of how things are going over there at the FCC:

    We recognize that the record in this proceeding does not include detailed market share information for particular enterprise broadband services. However, we note that other available data suggest that there are a number of competing providers for these types of services nationwide and the marketplace generally appears highly competitive.

    The AT&T decision isn’t great for competitive local phone companies, which won’t get this interface of predictable tariffed services. AT&T can now offer all of these services on a private basis, free of government requirements (save the obligation to contribute to universal service funds).

    The Commission takes the view that it MUST forbear in this context. It says the Commission is required to forbear from any regulation if it determines that (1) enforcement of the provision or regulation is not necessary to ensure the telecommunications carrier’s charges, practices, classifications, or regulations are just, reasonable, and not unjustly or unreasonably discriminatory; (2) enforcement of the provision or regulation is not necessary to protect consumers; and (3) forbearance is consistent with the public interest. Here, the Commission felt that requiring standard fee-interfaces for businesses of AT&T would “directly limit the ability of customers to secure the most flexible service arrangements” and was therefore “unnecessary to prevent unjust, unreasonable, or unjustly or unreasonably discriminatory rates, terms, and conditions for these services.”

    The story isn’t over, although the next part is a little murky. There is a “special access” proceeding going on that some people believe will be decided in ways the Bells won’t like. It overlaps in some ways with these forbearance requests by Verizon and AT&T. Here’s the FCC again:

    [T]o the extent that commenters argue for changes in the existing regulation of special access services other than those for which we grant relief, as in prior proceedings, we find that such concerns are more appropriately addressed on an industry-wide basis in pending rulemaking proceedings.

    Translation (I think): “We’re not finished with the enterprise marketplace and we may ensure that real regulation applies there.”

    In Europe things are so much simpler – when Deutsche Telekom refuses to open its fiber to competitors, and the German government goes along, the European Commission simply sues Germany. The argument here is that our marketplace is wildly more competitive. At any rate, we’re slimming the number of ISPs….

    This article has been cross-posted from the Susan Crawford Blog.