The Federal Communications Commission approved new rules affecting competition between telecommunications firms. Today's plan does not require established local phone companies to share new broadband networks at regulated prices. But the Commission left room for individual states to determine which network elements the local companies will have to provide to new competitors in providing traditional local voice services.

“At least, The FCC got the rules for broadband right. The weight of the evidence before the Commission was that its forced sharing of telecom networks had gone too far, and was slowing down both new entrants' and incumbents' build-out of new network elements. It's unfortunate that the agency did not also deregulate things like switching,” said CEI (a non-profit, non-partisan public policy group dedicated to the principles of free enterprise and limited government) senior policy analyst Solveig Singleton.

“That the states were left leeway to tailor the unbundling rules to their own state is, I think, is a case of federalism choosing a most unfortunate occasion for a revival. Telephone markets and telephone investors need a consistent and reasonably uniform approach to deregulation nationwide,” Singleton concluded.

“FCC’s regulation decision will further harm telecom industry,” states Adam D. Thierer, the Cato Institute’s director of telecommunications studies, in reaction to the decision of the Federal Communications Commission to shift more control of telecommunication industry deregulation to state utility commissions. (The Cato Institute is a nonpartisan public policy research foundation dedicated to broadening policy debate consistent with the traditional American principles of individual liberty, limited government, free markets and peace.)

“The FCC’s decision constitutes one step forward, but two steps back on the path toward genuine free market deregulation of the United States’ telecommunications industry,” he commented in a prepared statement.

“This complicated proceeding – which examined the unbundled network- element platform that the ‘Baby Bells’ must provide to competitors at regulated rates – provided the FCC with the chance to significantly revise infrastructure-sharing rules put in place by federal and state regulators in previous years. Such rules are the FCC’s preferred short-term method of encouraging entry by offering competitors generous discounts to network elements owned by the Baby Bells.”

“These rules rested upon the mistaken notion that competition would not have developed in local telecom markets in the short-term. On the contrary, credible threats already exist to the traditional dominance of the Baby Bells from cable and especially wireless providers. In the future, such facilities- based alternatives will continue to develop, but the Commission’s unbundling and infrastructure-sharing rules may be slowing their arrival since it has encouraged competitors to share existing networks and technologies before deploying new facilities of their own.”

“With today’s ruling, the FCC risks forcing yet another round of costly litigation because it merely tweaks the previous rules that the courts have already struck down before. In all likelihood, the courts will once again strike down the Commission’s rules and require another revision of them. In the meantime, genuine deregulation and facilities-based competition has once again been placed on hold by an FCC that clearly has little faith in the free market.”

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