from: Rocky Mountain news [1]

Telcos await FCC action on broadband
Competition will suffer if Qwest wins, rival says

By Jeff Smith, Rocky Mountain News
September 8, 2007
Qwest Communications, AT&T and two other carriers are hoping to get federal relief next week from a requirement to sell high-speed services to competitors at certain rates.

Douglas County-based Time Warner Telecom is one of many smaller companies opposing the petitions, saying its ability to provide competitive broadband services to corporate customers would be affected.

"It will have a negative impact on competition" overall, said Bob Meldrum, Time Warner Telecom's vice president of corporate communications.

The Federal Communications Commission has a Tuesday deadline to act on Qwest's "forbearance" petition and has placed the issue on that day's meeting agenda.

Qwest didn't return several calls and e-mails for comment.

Local phone company incumbents like Qwest, AT&T(SBC) and Verizon control the lines leading to and into most of the country's business buildings. Companies like Time Warner Telecom need access to offer competitive services, except in cases where they have facilities of their own.

If broadband services are deregulated, Qwest no longer will have an incentive to resell broadband services at a reasonable rate, said Kelsi Reeves, Time Warner Telecom's vice president of federal government relations.

If the FCC grants relief, it would gut part of the 1996 Telecommunications Act. Qwest and the other incumbents have maintained that wholesale rate caps are no longer necessary because there's enough competition.

Communications Daily reported that Qwest also maintained to the FCC in an ex parte letter this week that the FCC is legally obligated to give it relief because Verizon got similar relief last year.

Separately, Qwest has gotten local wholesale price relief in Omaha and is seeking such relief in Denver, Minneapolis, Phoenix and Seattle. Those petitions, which would affect the residential and small-business markets, are expected to be heard by the FCC next spring.

The Colorado Public Utilities Commission, in comments to the FCC, said the Denver area still "lacks competition in an overall sense," with "intense competitive activity" concentrated in only a portion of the area.

"For the residential market, Comcast is the only true threat of entry, and only a few (competitive local phone companies) can survive independent on Qwest's (network services)," the PUC said. "Thus, the likely outcome of forbearance is duopoly. In most instances, a duopoly is virtually indistinguishable from a monopoly."

smithje@RockyMountainNews.com or 303-954-5155