A federal court blocks FCC's "TELRIC" cost rule, but some states endorse it anyway.
With the Federal Communications Commission (FCC) having lost a major court battle last fall, the state public utility commission (PUCs) have taken the lead in the deregulation of local telephone service promised a year ago when President Bill Clinton signed the Telecommunications Act of 1996 (the "Act").
Some states have opened generic investigations; others have chosen to proceed case-by-case in individual arbitration proceedings. Overall, state regulators are deciding a wide variety of issues surrounding rights and responsibilities between incumbent local exchange telephone carriers (LECs) and new entrants seeking a piece of the local calling market.
In most cases, the incumbent LEC is a former Bell system company. The new entrants, on the other hand, can be a small upstart company or an industry mainstay such as AT&T, MCI, MFS Communications, or Time-Warner. In Florida, for example, the state commission has approved negotiated interconnection agreements between Bell South and new entrants MCI Metro Transmission Services, Inc. %n1%n Time Warner AxS of Florida, L.P., %n2%n American MetroComm Corp., %n3%n and Teleport Communications Group. %n4%n
Among its many provisions, the Act directs state regulators to arbitrate disputes that may arise as new competitors seek to negotiate the terms and conditions for interconnection agreements with incumbent LECs, and the rates that new entrants will pay to LECs to purchase unbundled building blocks for local service.