Sonic Seeks Return of Unbundled Network Elements

September 9, 2022 | by Andrew Regitsky

Sonic Seeks Return of Unbundled Network Elements

On October 28, 2020, the FCC concluded Docket 19-308 by releasing a Report and Order (Order) that phased out cost-based ILEC unbundling requirements everywhere except in the most rural areas of the country. The Order also ended cost-based resale requirements for rate-of-return ILECs. The Commission decision was based on a rare industry agreement between the ILEC association - USTelecom and the competitive carrier association - Incompas. Specifically, the Order was designed to:

Eliminate cost-based unbundling requirements, subject to reasonable transition periods, for: enterprise DS1 and DS3 loops in areas with sufficient evidence of competition; broadband-capable DS0 loops and subloops in the most densely populated areas; voice-grade narrowband loops nationwide; multiunit premises subloops and network interface devices nationwide; and operations support systems nationwide except for the purposes of managing other unbundled network elements, number portability, and interconnection.

Preserve the unbundling requirements for DS0 loops in less densely populated areas and DS1 and DS3 loops in areas without sufficient evidence of competition.

Eliminate unbundling requirements for dark fiber transport provisioned from wire centers within a half-mile of competitive fiber networks but provide an eight-year transition period for existing circuits to avoid stranding investment and last-mile deployment by competitive LECs that may harm consumers.

The FCC defended its actions by noting that the telecommunications market has evolved to the point where ILECs are facing fierce competition from CLECs, cable providers and wireless carriers. In such an environment, it has a duty to end unbundling and resale requirements where they stifle technology transitions and broadband deployment.

On February 8, 2021, Sonic Telecom (Sonic) filed a Petition for Reconsideration of the Order seeking the availability of unbundled DS0 looks and dark fiber to enable it to offer fiber-to-the-home (FTTH) to more customers.

The Commission should reverse actions taken by the previous administration that hinder, rather than promote, the most aggressive fiber to the home (“FTTH”) builders—those using unbundled network elements (“UNEs”) as a stepping-stone for fiber buildout. The remote learning during the pandemic has dispelled the myth that the Commission need only promote broadband, and fiber build out to rural and less densely populated areas. Commission policies need to spur deployment to underserved and unserved communities in urbanized areas, too. The record overwhelmingly demonstrates two UNEs – unbundled DS0 Loops and unbundled dark fiber – are key to FTTH buildout by those using them (competitors) and those responding to the competition with their own buildout (incumbent local exchange carriers (“ILECs”)). Cutting off access to these elements, even at a future date, disrupts today’s plans for future fiber buildout, as well as investment in new, innovative technology delivered over these network elements. (Sonic Petition, at p. 1).

Sonic was extremely critical of the FCC:

Multiple declarations and economic studies in the record, as well as the findings of a fellow federal governmental agency, contradict the Commission’s finding and instead demonstrate that unbundling spurs deployment of new networks and promotes “the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans.” The record overwhelmingly demonstrates (1) significant investment in fiber network deployment by UNE-based competitors in both urban and rural areas; (2) competition ILECs face from UNE-based competitors stimulates ILEC network investment; and (3) competitors use of UNE copper loops and UNE dark fiber fosters innovation and the transition to more advanced technologies. As the U.S. Small Business Office of Advocacy (“SBA”) concluded, the “record shows that small CLECs are investing significantly into building their own networks and deploying next generation facilities under the existing regulatory scheme, which has also encouraged incumbents to move their own networks forward.” (Id., at pp. 5-6).

After ignoring the Petition for 17 months despite Sonic’s continued lobbying, on September 2, 2022, the FCC issued a Public Notice beginning a Pleading Cycle for the Petition.  15 days after the Notice is published in the Federal Register, industry comments will be due.  25 days after the Federal Register publication, reply comments will be due. With the agency still stuck with four commissioners, it is hard to envision it once again restoring unbundled network elements to ILEC competitors.

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