August 15, 2006 3:33 PM PDT

Judges back FCC rules on network sharing

A panel of federal judges on Tuesday dealt a blow to EarthLink, upholding federal rules that exempt regional telephone companies from sharing portions of their broadband networks with competitors.

The U.S. Circuit Court of Appeals for the D.C. Circuit denied the Atlanta-based Internet service provider's request for review of a 2003 Federal Communications Commission order. Those rules left Verizon Communications, BellSouth, Qwest Communications International and the pre-merger SBC Communications free, with respect to fiber-based networks, from requirements in a 1996 federal telecommunications law that generally forced such companies to "unbundle" network elements for access by potential competitors.

"The FCC reasonably concluded that the benefits of unbundling were 'modest,'" Circuit Judge Janice Rogers Brown wrote in a 25-page opinion (click for PDF) for the three-judge panel.

The Bells are generally required by law to lease access to their traditional copper lines. The idea behind scaling back the rules for fiber-based networks was to encourage telephone companies to deploy more advanced broadband services--and to boost their competitiveness against dominant cable broadband companies. The regulators had argued that mandatory unbundling would discourage investment in new, pricier ventures like fiber to the home.

During oral arguments in May, a lawyer for EarthLink argued that the FCC had behaved illegally in enacting the exemptions because it hadn't adequately assessed the state of competition in the broadband industry.

The judges dismissed those arguments, saying federal law "imposes no particular mode of market analysis or level of geographic rigor."

The same appeals court ruled two years ago that federal regulators had been justified in saying that the big phone companies would not have to share or unbundle their new "advanced broadband networks," which use technology such as fiber optics, with potential competitors. Consumer groups at the time objected to that ruling.

Chris Putala, EarthLink's executive vice president for public policy, downplayed the impact of the court's decision. He said in an e-mail message that the company would "continue negotiating our commercial agreements with the RBOCs (regional Bell operating companies) to include fiber to the home when we have products and services to deliver."

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Judges don't seem to have enough information to make these tech decisions
France, Germany, Korea, Japan, and other countries have better and more competitive deployment of broadband because of regulation, specifically regulation regarding Local Loop Unbundling. The US is way behind in broadband deployment precisely because of decisions and laws that do not require Local Loop Unbundling. A French friend of mine has told me he has a choice of a dozen or so broadband providers and has 8mbps bidirectional broadband. He's able to run his own server from home for the roughly same amount I'm paying monthly in the US for lesser ADSL access, while I pay additional money for hosting.

I find it ironic that the regulatory ****** aka the Telecomms, who have benefitted to the tune of billions of tax dollars because of regulation, are now arguing against regulation when it doesn't suit them.

Historically, it's also been shown that when tax dollars and tax incentives are gifted to the Telecomms, they have not spent the money on improving the network, but instead have put it onto their bottom line and into the pockets of lobbyists and into campaign coffers of politicians who can get them more government largesse. The Telecommunications Act of 1996 gifted them with billions of dollars based on their promises to put fiber in every home, a promise that wasn't kept.

It is also a mistake to leave the oversight in the hands of the FCC, since their track record in this regard has been pretty awful.

This ruling, though possibly technically correct in interpreting the law the way it was written, does nothing whatsoever to help the consumer or offer the consumer better choices, and will hurt everyone but the telecomms.
Posted by bjnovack (14 comments )
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The Common Man
As usual, the common man is left behind when it comes to court or regulation decisions. Big business with their deep pockets always seem to turn out to be the winners. I would also think that most judges are not computer savvy, and not really qualified to make decisions in this category. Yup! The common man gets to be the loser. With the latest court decision, one won't see the access prices come down too soon. If anything, we will be priced gouged, since the big boys won't have any competition.
Posted by ONEderer (15 comments )
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