|
New Networks Institute & Teletruth
News Alert. September 8th, 2009 FULLCOMMENTS AND CASE STUDY: http://www.teletruth.org/docs/TeletruthRFA.pdf
Related Documents and Links: http://www.newnetworks.com/RegflexResources.htm
CASE STUDY: How Regulations Designed
to Help Small Business Competitors Failed to Work and Harmed Broadband,
Competition, Customers, Innovation, and the Economy.
Teletruth Requests New Proposed Rulemaking Actions the FCC Should Take to Fix
Future Problems. *
How did AT&T and Verizon become 'very small businesses' to
bid
on 'small business' wireless spectrum? *
Is using data from 1992
or 1997 about current market competition
acceptable? *
Did the FCC know they
would be harming competition when they wrote:
"the majority of these firms are small entities
that may be affected
by our action". The FCC is currently seeking comments
regarding --- "Possible Revision or Elimination of Rules
under the Regulatory Flexibility Act". The Federal Regulatory Flexibility Act
of 1980 (as amended) requires all federal
agencies, including the FCC, to ensure that the regulations
they enact do not
directly harm small businesses. The agencies are also
required to create
essentially an impact study, known as the Regulatory
Flexibility Analysis, to
determine if their new rules will harm small competitors. We argue that the previous FCC
Administrations' failure to take the Regulatory Flexibility Act (RFA)
obligations seriously since 1998, combined with an
overwhelming disregard for accurate data, removed broadband,
telecommunications, Internet, wireless and even media competition.
It has cost growth,
harmed innovation and slowed mention
closing down thousands of competitors. It also resulted in
higher prices,
slower broadband speeds, and a lack of choice for customers. In short, it has let AT&T,
Verizon, Qwest and the cablecos to take control of the
regulatory agency's decisions, to the detriment of the are, after
all, 15th in the world in broadband for a reason. Teletruth requests the FCC create the
following proposed rulemakings: .
Investigate the previous FCC's violations of the Regulatory
Flexibility Act & the Data Duality Act, and revamp the
current
process and data collection. .
Undo the rule that "eliminated mandated sharing requirement on
AT&T, Verizon and Qwest's wireline broadband
internet access". (line
sharing) .
Reinstate the rules
related to unbundling (wholesale) obligations of
AT&T, Verizon and Qwest, the local exchange
incumbents. .
Get refunds of all of the fraudulent small
business "designated
entity" discounts garnered by AT&T, Verizon,
T-Mobile and others, from the
FCC's wireless spectrum auctions, and open that spectrum for
small business
competitors. The Regulatory Flexibility Act should
have been a tool that the FCC and others could
use to balance the voices of the well-financed incumbents
and help the FCC
create accurate impact studies, which would have informed
the FCC of the potential harms that would
occur if the FCC proceeded in creating laws that
eliminated small business competition on wireline and wireless
services. Congress also made sure that there
were provisions in the Telecommunications Act of 1996, (Section 257) so that
small businesses could compete in telecommunications
and information markets on a level playing field by "eliminating...
market entry barriers for entrepreneurs and other small businesses in
the provision and ownership of telecommunications services
and information
services". And the FCC is supposed to fulfill these
obligations, with a
national policy to "promote the policies favoring diversity
of media voices,
vigorous economic competition, technological advancement". In fact, the largest growth in
telecommunications, broadband and the Internet in American history was
created, not by the incumbent phone companies
(now AT&T Verizon, and Qwest), but by the thousands of
independent Internet providers and competitive
data-local exchange companies (DLECs). These entrepreneurs brought products from
VOIP and DSL, to making sure customers could use email and
the World Wide Web. As we will show in our case study,
because the FCC failed to properly implement the
Regulatory Flexibility Act's statutes, there were new rules created that
had direct harms to small business competitors in virtually every area of
telecommunications, broadband, Internet, wireless and even media
consolidation. Therefore, we are asking the FCC to
expand the examination of 'rules' to a more
important examination - that the Regulatory Flexibility Act,
including the data
used, harmed small businesses and the FCC should initiate a
Notice of Proposed
Rule Making to help this FCC revamp the methodology,
process, data
collection and analysis. We address 4 areas of contention. A) Investigate the previous FCC
Administrations' violations of the Regulatory Flexibility Act & the
Data Duality Act and revamp the current process and
data collection. In the FCC's Reg.
Flex. analysis in multiple dockets, the FCC included
this identical
sentence in 13 different market descriptions: "the majority
of these firms are small entities that may be affected by
our action." It seems the FCC knows its decision
may cause direct harms, yet doesn't seem to care. But
it gets worse. The FCC is required to essentially do a
market impact study
on how their current rulings will harm small competitors.
The paragraph
below, with information from 1997, was used in multiple,
recent FCC analyses to show that the current
market is competitive. -- It is over a decade old. "Wireless Communications Services:
This service can be used for fixed, mobile,
radiolocation, and digital audio broadcasting satellite
uses... The Commission auctioned geographic area
licenses in the WCS service. In the auction, held
in April 1997, there were seven winning bidders that
qualified as "very
small business" entities, and one that qualified as a 'small business'
entity." The FCC has lots more recent data on
wireless spectrum because of its need to approve
license transfers. As we show, these licenses have changed
hands, sometimes
more than once, and the wireless spectrum is far more
concentrated now than it
was in 1997, often shutting out the small business
competitor. From the use of decade-old data as
'boilerplate' in multiple dockets, the FCC's failure to even discuss
alternatives of small entities being affected, or other
basic processes, such as proper notification of impacted
small businesses,
the FCC needs to comply with the Regulatory Flexibility Act
and Data Quality Act
tenets. B) Undo the rule that "eliminated
mandated sharing requirement on incumbents'
wireline broadband internet access". (Line Sharing) Because of a failure
of the FCC's Reg. Flex. analysis,
the FCC created
irresponsible laws that blocked Internet Providers and DLECs
from moving their
customers to higher-speed services, such as DSL or the new
fiber-based services. These rules need to be
reversed. If we are expecting a national
broadband policy to work, it needs to understand
that competition and entrepreneurs, not the incumbents,
drove the economy,
innovation and cared about the customer. In fact, it is clear that some
problems, such as Net Neutrality, arose only after the
consolidation of Internet and broadband services by the
cable and phone
companies. C)) Reinstate the rules related to
unbundling (wholesale) obligations of AT&T, Verizon
and Qwest, incumbent local exchange carriers. In 2004, competition was dead in the
water after the FCC ruled to remove competitors'
ability to purchase wholesale local service (known as UNE-p)
at reasonable
rates. By 2004, AT&T and MCI,
the 2 largest competitors, had over 17
million customers getting competitive service. However, the
FCC removed the
rights of these companies to get wholesale services at reasonable
rates. Both companies were put up for sale, and wireline competition
plummeted 60%. Had the FCC actually followed the
requirements of the Regulatory Flexibility Act, it would have noticed it was
essentially killing off the 2 largest competitors
who offered choice, not to mention hundreds of other
companies. D) Get refunds of all of the
fraudulent small business 'designated entity' Discounts from the FCC's wireless
spectrum auctions and open that spectrum for small
businesses. Is AT&T, Verizon and the other
large wireless carriers 'very small businesses'?
By creating false-front 'small business' groups, known as 'Designated Entities', AT&T et al
got over $8 billion dollars in small business
wireless licenses. There was no tracking of the licenses and
no serious
analysis of the harms to the small business companies who
did not win the
bidding. Also, the FCC's data
in the Reg. Flex. for
wireless services were from 1992, 1997 and other ancient data that
essentially condemned the small business bidders who
wanted spectrum. The Reg. Flex. analysis
was boilerplate, used in multiple
proceedings, and there was no 'current market analysis' or
even tracking of
what happened to the companies since 1992, etc.. Instead, a sleazy act by
AT&T, Verizon and others was carried out where they
could play-act as
'very small businesses' and they could take control of the wireless
markets. Note: Teletruth, New Networks and
others, have been filing comments, complaints
and even filing petitions pertaining to small business
issues since 1998.
They have all gone unheeded. Teletruth currently has an
'active' Reg. Flex and Data Quality Act
challenge filed in 2008. To read our previous
work. http://www.newnetworks.com/RegflexResources.htm
TO READ OUR FULLCOMMENTS, including
our case study: http://www.teletruth.org/docs/TeletruthRFA.pdf
|