The Fall and Possible Rise of Broadband UNE

You have to applaud Google–a software company– for taking it upon themselves to build an experimental, fiber-to-the-home (FTTH) network. With its deep pockets and access to financing, Google is the perfect DIY candidate. For other competing carriers, life is a little more difficult. Yes, I’m encouraged that the FCC may consider unbundling fiber, forcing incumbents to sell access to broadband bandwidth at wholesale rates. Recent history, though, shows that even when “the club” was forced to unbundle, they weren’t happy about sharing their toys.

The logical place to begin to understand unbundled network elements (UNE)  is the Telecommunications Act of 1996 (TA96).  Designed to stimulate competition through regulation, the legislation set in motion the subsequent fighting between competitive carriers (CLECs) and the incumbents (ILECs).

In section 251 of TA96, Congress said that incumbent local exchange carriers must provide:

nondiscriminatory access to network elements on an unbundled basis at any technically feasible point on rates, terms, and conditions that are just, reasonable, and nondiscriminatory.

Translation: the carrier gang had to share access to their infrastructure but could charge for it.

And then our legislators added language in section 251 defining the conditions under which the incumbents’ plumbing (the copper, fiber, and switching that make up the network elements) would be made available: the competitive carrier would be impaired if access were denied, and that access was a necessary part of using the network.

Given that TA96 was the law of the land, you’d think we’d now be flooded with competitive local voice and broadband carriers at this point.  This was not to be: most of the 300 or so CLECs that cropped up during the boom years are now out of business.

The ILECs, naturally, fought tooth-and-nail over every word,  with a case reaching the Supreme Court that upheld key portions of section 251. Incumbents continued fighting in the courts, and subsequently the FCC, starting in 2003 and under new management 😉 , delivered the final blow to unbundling.

In its Triennial Review Order, the FCC retreated on Section 251,  eliminating or loosening most of the unbundling provisions, and canceling the requirement that established carriers unbundle the high-frequency portions of the copper wires—read broadband DSL. The unbundling of fiber-to-the-home in greenfield environments (new residential developments) was specifically eliminated since the FCC found that competitive carriers would not be, er, impaired

This is not the place to go into the anti-competitive world view of the ILECs  (Editor: this post is already on the long side. Interesting, but long) so I’ll save that for another time.

Even during that golden age of competition (1996-2003), the ILECs played hard ball, especially in the areas of unbundled wholesale rates and access to the wires.

You can get a taste of the squabbling and trench fighting from this comment initiated by CLEC Cavalier Telephone (still in business) that was aimed at Verizon’s application for long distance service—i.e., it’s 271 request.

This particular matter involved Cavalier’s claim that Verizon delayed processing of UNE request for T1 access.

I’ve excerpted the more revealing parts:

At this time, Cavalier has eighty (80) T1 orders pending, five (5) of which are pending in Pennsylvania. Beginning on or about May 2001, Verizon has refused to process seventeen (17) of these orders by claiming that there are “no facilities.”  … This treatment is discriminatory because Verizon will provide the necessary facilities to its own retail customers. Further, Verizon has stated that it would provide these facilities under its FCC Special Access Tariff, but not under UNE provisioning, which proves that Verizon easily can provision T-1s for use by CLECs, as long as the CLEC pays the substantially higher Special Access Tariff rates.

There are zillions of more of these types of disputes that can be found by trawling the FCC’s comment files. (Editor: just what our readers want to do.)

Yes, by all means, unbundled fiber, but if past history is any guide, Verizon, ATT, et al.  are by no means going to make it easy, and there’s daylight between competitors’ view of the appropriate wholesale price for  fiber access and the incumbents’ take on it.

Which is all to say, Go Google Fiber! 🙂