United States: Rural Telephone Alliance Challenges FCC to Deregulate Rural ILECs
Last Updated: June 25 2004

Washington, D.C., May 27, 2004. America’s Rural Consortium (ARC), a group of forward-looking rural, independent telephone companies, today challenged the FCC to deregulate their members and other rural incumbent telephone companies. ARC urged this deregulation in the context of the current blitz of competition from a host of new competitors using the Internet to provide voice telephony and other competitive services.

The FCC, in March 2004, started a proceeding to establish rules for a new breed of companies using Internet Protocol (IP) to provide voice, data, video and other services. Presumptively, the FCC stated that these new entrants should be subject to "light-handed" or no regulation at all. To avoid disparate treatment from state regulators, the FCC sought to keep the new entrants subject to federal jurisdiction, and to ensure that they pay for any use they make of the public telephone network to originate or complete calls.

In its comments filed today in the IP-enabled services proceeding, ARC told the FCC that the advent of IP-enabled services is a watershed event equal in magnitude (or greater) to the shift from telegraphy to telephony or from analog wireless to digital PCS. IP allows cable companies, electric companies, wireless service providers, as well as telephone companies, to provide voice services that are virtually indistinguishable from traditional telephone services. In addition, IP enables all these competitors to provide television, high-speed data, security, monitoring and a host of other services. ARC’s lawyer, David A. Irwin, called IP-based technologies "the great information-age equalizer" in the provision of "TeleInfoServices."

Accordingly, ARC concluded that the FCC should—as a matter of public policy—treat all competing service providers alike, either through deregulation or, at most, light-handed regulation. At present, only local incumbent telephone companies are subject to a complex set of state and federal rules and regulations based on the monopoly era of yesteryear. These burdensome rules and regulations are no longer in the public interest because they constrain rural telephone companies as they try to survive in a competitive marketplace, where technological convergence has drastically lowered any remaining barriers to entry in the local services market.

ARC members and other rural telephone companies have borne a disproportionate regulatory cost burden since passage of the Telecommunications Act of 1996, which supposedly was intended to lessen regulation and promote competition. ARC challenged the Commission to "break with the past" by freeing the rural telephone industry from monopoly-era regulation; to preempt inconsistent state regulations; and to regulate voice services under a unitary framework, if at all.

For further information, contact Greg Haledjian at (202) 728-0400 or ghaledjian@ictpc.com 

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