AZ Senator Kyl supports Qwest deregulation hearings

Now only weeks away from making a landmark decision for the Phoenix metropolitan area, the Federal Communications Commission is receiving a flurry of interest from both sides of the Qwest Communications International Inc. deregulation petition.

Sen. Jon Kyl (R-Ariz.) has become the highest ranking elected official to weigh in on the matter. In a letter received by the FCC on July 2, Kyl gives his support for the discussion of Qwest’s petition for forbearance from certain tenants of the 1996 Telecommunications Act. Although he does not necessarily take a side, he calls on the FCC to thoroughly investigate the issue so that their decision works to promote telecommunications competition in Phoenix while taking into consideration how the current competition is affecting Qwest.

“If the FCC determines that forbearance will promote competition among carriers in the Phoenix market, I would assume that would support the claim that Qwest’s forbearance petition is in the public interest,” Kyl wrote.

Kyl admits that he is neither aware of the thousands of documents already submitted to the FCC by Qwest and the bevy of smaller competitors nor the studies that support either of their claims. He does, however, acknowledge that the FCC will eventually have to make a decision given the growing population of the Phoenix market. He asked the federal regulators to use its previous forbearance decision in Omaha, Neb. as a model for future decisions in Phoenix.

“I appreciate your fair consideration of Qwest’s forbearance petition,” he wrote. “Of course, I do not expect any action to be taken in this matter that would be inconsistent with existing rules and regulation, or that could be construed as inappropriate of unfair.”

The FCC must make a decision on the petition by July 26. If the five-member commission cannot reach a decision, such as in the Omaha case, the petition will be granted. If Qwest achieves forbearance from the 1996 Act, the company can charge unregulated rates for competitors that use its existing telephone infrastructure.

Portions of the 1996 Act were designed to foster competition from competitive local exchange carriers (CLECS). Through the language of the 1996 Act, the nation’s incumbent local exchange carriers (ILECs) were forced to charge wholesale prices regulated by state agencies. Of the three existing ILECs in the country, Qwest and Verizon Communications Inc., have launched forbearance petitions in dozens of large metropolitan markets. The other ILEC, AT&T Inc., is expected to file multiple forbearance requests next year as a result of an agreement with the FCC following its takeover of SBC Communications.

Along with Phoenix, Qwest is seeking forbearance in Denver, Minneapolis-St. Paul and Seattle. State regulators, including the Arizona Corporation Commission, and a number of state representatives strongly oppose deregulation of Qwest pricing. They, like the CLECs, claim deregulation would allow Qwest to raise prices so high that it would prohibit smaller competitors from doing business in those areas.

Qwest and Verizon claim that regulated prices in certain areas are so low and it does not give CLECs incentive to build their own infrastructure, much like Cox Communications Arizona has done in the past decade. The two ILECs claim competition from cable, wireless and voice-over-Internet-protocol providers is reducing its ability to find customers, and therefore cutting into revenues it could use to improve its service.

Ty Young can be reached at ty@aztechnews.net.