FCC exempts Verizon from broadband regulations

Computerworld - The Federal Communications Commission announced this week that it has exempted Verizon Communications Inc. from regulations affecting high-speed data services for businesses, including a requirement that it file proposed prices with the government.

The decision, which took effect without a formal vote on March 19, outraged large corporations that buy data and voice services from Verizon, as well as smaller phone companies. A group of 27 large corporate telecommunications customers had argued in a 14-page brief that Verizon should not be exempted from FCC rules because business broadband markets are not yet competitive and services are costly.

“Verizon was already price-gouging customers while it was regulated, and this action significantly raises the risk for prices to increase on the broadband building blocks for enterprise customers,” said Colleen Boothby, a Washington attorney for the companies, known as the AdHoc Telecommunications Users Committee. “This kind of decision -- to give Verizon what it wants regardless of whether that hurts customers -- is what gives Washington a bad name.”

She predicted that the decision will be appealed.

“Anybody who buys these services for a living knows that the market for business broadband just isn’t competitive,” Boothby said. “That may be a politically inconvenient fact, but it’s still a fact.”

With one seat unfilled on the five-member FCC, commissioners were split along Democratic and Republican party lines over the Verizon petition for exemptions. Although the matter never came to a vote, Verizon’s petition was approved under a rarely used statute that allows a company’s request to be approved unless the FCC denies it within a certain period of time. That period expired on Sunday, and the decision was announced the next day.

FCC Chairman Kevin Martin and Commissioner Deborah Taylor Tate, both Republicans, said in a statement that the FCC decision will help Verizon roll out broadband by eliminating regulations that deter investment in new services. They noted that Verizon said it will continue to make DS1 and DS3 service available in a nondiscriminatory manner.

“This relief will enable Verizon to have the flexibility to further deploy its broadband services and fiber facilities without overly burdensome regulations,” Martin and Tate said in the statement.

But the Democrats on the FCC, Michael Copps and Jonathan Adelstein, said in separate statements that they oppose the Verizon exemptions. “I am deeply disappointed,” Copps said in his statement. “This is not the way to make environment-altering policy changes.”

Copps said he worried that the Verizon ruling “erases decades of communications policy in a single stroke,” and said the result could be that Verizon is freed from obligations such as having to cooperate with federal wiretapping statutes or having to pay into the Universal Service Fund, which is used to subsidize voice and data services mainly in rural areas.