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FCC attempts telco compromise

Negotiated settlement to wholesale impasse

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FFC chairman Michael Powell's reaction to having his new telco wholesale rules rejected by a US court has been to kick the entire thing back to the leading telcos and call them to the negotiating table.

One such telco - Bellsouth - has already publicly agreed. To date, the FCC under Powell's guidance has tried three times to create a set of acceptable rules to force companies to share networks in a reasonable fashion and under a reasonable charging regime; each time the telcos have gone to court and had the rules declared illegal.

The FCC is trying to come up with a set of rules to replace the existing legislation which addresses how charges are set when one telco carries another's traffic and vice versa.

The 1996 Telecommunications Act made room for such a replacement set of rules. It did, however, also lay down a framework under which they would be legal and the FCC cannot convince either the courts or the telcos to agree on any legislation it has introduced. Hence the call for a negotiated settlement before the older wholesale interconnections rules expire.

A statement from Bellsouth this week said: "Given competition from the alternate technologies like cable telephony, wireless service and voice over the Internet, BellSouth has every incentive to ensure the continued viability of its wholesale business with CLECs [competitive local exchange carriers] by negotiating wholesale prices that keep CLEC traffic on BellSouth's network.

"BellSouth applauds and supports Chairman Powell's statements today encouraging the telecommunications industry to take a stand in ending the uncertainty it has been plagued with since 1996." And as such BellSouth has invited the CLECs that use its network, into negotiations.

"Since passage of the 1996 Telecommunications Act, the industry has been living with government-mandated competition, which has dictated an uneconomic rate structure, impeded investment incentives, and resulted in the elimination of hundreds of thousands of jobs in the sector. It is time for that regime to end."

© Copyright 2004 Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of events that have happened each week in the world of digital media. Faultline is where media meets technology. Subscription details here.

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