Ch 17 Unbundling Interconnection And Line Of Business

• ATT v Iowa Utilities Board
o Telecom Act of 1996 altered local telephone markets by ending LEC monopolies and subjected LECs to duties meant to encourage market entry.
o LECs must share networks
o ATT challenged Act’s constitutionality
o Does the Federal Communication Commission have authority to implement the competition-inducing guidelines set out in the 1996 Telecommunications Act?
o Yes – FCC has rulemaking authority for the provision of the Act
o LECs must share portions of their network with competition
o Majority opinion holds that FCC erred in interpreting the 1996 Act’s provisions on unbundled network elements

• After Iowa Utilities Board
o FCC offers more definition of “necessary” and “impair” standards
o Rapid introduction of competition in all markets
o Promotion of facilities based competition, investment, and innovation
o Reduced regulation

• United States Telecom Association v FCC
o See case brief
o Court turned away arguments made by competitors that limitations on high capacity circuits and unbundled switching were too stringent
o FCC is refining analysis to take better account of the costs of unbundling

• Verizon Communication v FCC
o See case brief
o FCC requires local regulators to determine the cost of supplying a particular incumbent network element to a new entrant – by looking at what it will cost incumbent to supply element in the future

• Notice of Proposed Rulemaking
o Proposes general principles for creating rates for unbundled services
o Main proposal is to get rid of hypothetical approach to modeling network costs
o Want to move to a model based more on the features of real networks
o Interconnection mandated by 1996 Act
o Set general guidelines for mutual exchange of traffic
o Identified problems with current access charges and compensation

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