FCC Modernizes Unbundling and Resale Requirements

The Federal Communications Commission eliminated legacy unbundling and resale rules where they stifle technology transitions and broadband deployment. The rules date back to the Telecommunications Act of 1996, which required monopoly local telephone companies to make portions of their networks and services available to competitors at regulated rates. The Order eliminates rules requiring unbundling of the following network elements, subject to certain conditions and multiyear transition periods:

• DS1 and DS3 Loops—These legacy last-mile lines are used primarily by business customers and are being replaced by higher-speed, packet-based services sold by incumbent local exchange carriers (LECs), competitive LECs, cable providers, and other intermodal competitors. The Order ends these unbundling requirements in areas with sufficient evidence of competition but keeps them in place in areas that lack sufficient competition.
• DS0 Loops—These network elements are typically used to provide both voice and broadband service using various Digital Subscriber Line technologies. The Order eliminates unbundling requirements for these loops in densely populated areas, which tend to have more competitive options, but preserves unbundling requirements for DS0 loops in less densely populated areas.
• Legacy Narrowband Voice-Grade Loops—These network elements are used to provide legacy voice service and have no broadband service capability. Given the shift away from legacy voice services to IP-and wireless-based voice services offered by multiple providers, the Order removes unbundling obligations for narrowband voice-grade loops nationwide.
• Dark Fiber Transport—These services provide a connection between phone companies’ local wire centers. The Order eliminates unbundling requirements for dark  fiber transport originating or terminating from a wire center within a half-mile of competitive fiber networks.

The Order also discontinues, subject to a three-year transition period, a requirement that incumbent LECs make available for resale their retail legacy telecommunications services at cost-based rates. These services are predominantly used by competitive LECs to provide legacy voice services to business and government customers.

Many elements of the Report and Order are consistent with a compromise proposal for determining the appropriate scope of the FCC’s unbundling rules in today’s marketplace that was reached by major industry buyers and sellers of unbundled network elements.