Verizon Gets Break on Business Broadband

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Despite the opposition of two of the four sitting FCC commissioners, the FCC Monday granted Verizon relief from regulations on the provision of high-speed broadband service to large-business customers.

"When trying to compete for business, we needed to design products and services to fit our customer's needs, said Verizon spokesman Brian Blevins of the decision. "We didn't have the flexibility to do that."

Verizon filed the so-called "forbearance" petition in December 2004 per the 1996 Telecommunications act, which allows the FCC to exempt companies from regs under certain circumstances. If the commission does not deny the petition in a year for failure to meet the criteria for forbearance, it is granted by default. The FCC extended the forbearance deadline to March 19, but took no action by Monday.

Verizon promised to continue to pay into the Universal Service Fund for the business services. That fund helps pay for broadband roll-out to poorer or hard-to-reach areas. Verizon also said it would continue to make the services available was "wholesale common carrier services."

"The impact of this petition, which became effective today is that outdated regulation on broadband services is lifted allowing greater flexibility in offering sophisticated high-capacity services in the highly competitive enterprise market," said Verizon in a statement.  "We are appreciative that supporting Commissioners recognized changes in technology and the marketplace.  The end result will be greater innovation, more competitive pricing and more flexible arrangements tailored to meet the needs of our business customers."

Verizon said the decision flowed from the FCC's decision in August to classify telco's Internet access service over digital subscriber lines (DSL) as an information service, granting them the same freedom from access regulations the cable industry got in June when the Supreme Court upheld the FCC in the Brand X decision."

The supporting commissioners were deregulatory Republicans FCC Chairman Kevin Martin and Commissioner Deborah Taylor Tate, who praised the outcome, saying: "Promoting broadband deployment is one of the highest priorities of the FCC.  To accomplish this goal, the Commission seeks to establish a policy environment that facilitates and encourages broadband investment, allowing market forces to deliver the benefits of broadband to consumers.  Today, we take another step in establishing a regulatory environment that encourages such investments and innovation."

Commissioners Michael Copps and Jonathan Adelstein were not pleased with either the outcome or the process that produced. Copps put his problems with the latter this way: "As a legal matter this approach is suspect.  There is no appealable Order.  There is no document, no stitch of analysis, no trace of discussion, nothing that a court can use to gauge where the Commission is coming from.  And by failing to act through a normal proceeding, the Commission jeopardizes many Congressional policies that are at the core of its statutory duties.  I find no basis to support an approach that puts so much at risk."

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