[BETA] Fortnightly

MFS Communications Co. (MFS) has petitioned the Federal Communications Commission (FCC) to order monopoly local exchange carriers (LECs) to open access to the "local loop" for competitive telephone companies at a cost-based rate. The MFS "Open Loop Initiative" seeks to speed development of local telephone competition and to provide a choice of local carriers.

The local loop is that part of the local telephone network that physically connects the customer's premises to the LEC central office. Presently, monopoly providers control access for all local and long-distance telephone calls that originate or are received within a service area.

MFS contends that because several states have authorized competition for switched local exchange service, similar interconnection and unbundling requirements should be extended to the "bottleneck" facilities that connect interexchange carriers (IXCs) to end users at the first switching point in the local exchange network. The MFS petition would enable companies authorized by state commissions (PUCs) to provide basic local dialtone services and obtain unbundled access to bottleneck facilities, eliminating duplicate loop facilities.

MFS believes the FCC should address the policy issues even though PUCs have jurisdiction over local exchange service pricing and over the intrastate portion of the local loop. Since the FCC exercises jurisdiction over the interstate portion of loop costs, MFS expects the agency to regulate those aspects of the common loop facility that cannot be divided between federal and state jurisdictions. To discourage price squeezes, MFS asked the FCC to adopt nonbinding guidelines for pricing unbundled loops and local exchange service.

"If all competitive local telephone companies are provided cost-based access to this ratepayer-financed facility, all customers ultimately will be able to select effortlessly and efficiently among long distance providers the way they do currently among local service providers," says MFS president Royce J. Holland. "Our initiative will provide the foundation to extend the benefits of local competition and universally available choice of local carriers to all Americans, not just the largest users."

MFS said it views its unbundling initiative as a logical step in the development of a competitive telecommunications market. First, the Carterfone decision unbundled equipment from both local and toll service in the mid-1960s. Second, the Execunet cases (em and the equal-access requirement of the Bell system divestiture in 1984 (em unbundled local and toll (long distance) service in the 1970s and 1980s. Now MFS is pushing the third step, the unbundling of local service components (em the trunk (transmission) function for the line, and the switching functions of the LEC network.

Although only six states currently allow local competition, MFS believes almost every state will have approved competition or moved toward it within two years. t

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