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Forbearance: It’s Not 1996 Anymore

05.04.2018

When it comes to regulating the broadband industry, there are certain “buzzwords” that suck up a lot of media oxygen--terms like privacy, net neutrality and an open internet. But ensuring that our industry--which has evolved from telegraph wires to delivering the global internet-- has innovative regulations to match its own innovative trajectory, requires a near constant monitoring of rules that may no longer be relevant.

That’s where “forbearance” comes in. The Federal Communications Commission (FCC) is required by law to stop enforcing rules that once might have been necessary to ensure reasonable practices, or to protect consumers, but no longer serve that purpose. Once the FCC determines a rule isn’t necessary anymore, the Communications Act requires the FCC to forbear. Forbearance is intended to help ensure the FCC only regulates as much as necessary. The FCC can forbear from a rule on its own, or forbear following a petition from a specific group.

This month, USTelecom is petitioning the FCC for nationwide forbearance from rules created in 1996 that no longer make sense in today’s marketplace. Specifically, the petition focuses on unbundling obligations, which require some ILECs (incumbent local exchange carriers, a.k.a. local telephone companies) to sell access to parts of their networks to certain competitors at extremely low rates set by regulators. 

When these rules were created, wireline phones still dominated the communications landscape, and wireless, VoIP, and cable telephony were in their infancy. And texting, social media, and other non-voice forms of communication were still off on the horizon.

So maybe there were some reasons for these rules in 1996 when Congress created them. But those days are long gone. Cable companies and other providers have built networks, and consumers have benefitted from the competitive marketplace that today is thriving. It no longer makes sense to single out a few companies and make them share their networks with their competitors. In fact, it’s unfair.

These outdated rules distort competition and investment decisions. When outdated and overly restrictive regulations are rolled back, innovation and investment thrives. And for over two decades, the broadband industry has transformed how the world communicates under a light-touch regulatory structure that spurred over one and a half trillion dollars in private investment.

Once the FCC forbears from these rules, consumers and the economy overall will benefit.  A market analysis shows that consumer savings could reach $1 billion over the next ten years, and removing these regulatory handicaps could lead to more than $1.8 billion in new investment over the same timeframe, creating more than 6,000 jobs.  Overall, forbearance has the potential to increase economic output by $5.4 billion over the next ten years.

The periodic re-tuning of telecom and broadband regulation through forbearance is just one way the FCC is ensuring that its own mandate remains as flexible and innovative as the products and industries it oversees. Culling outdated regulations is one sure way to allow America’s broadband industry to serve the needs of consumers in our rapidly changing global digital economy.

This won’t be the first time the FCC has acted on its forbearance authority. We’ve filed a couple of other forbearance petitions in recent years. The FCC granted some of the relief we sought, and customers benefitted. Here, they will again. Wholesale customers will still have many options available to obtain the inputs they need to provide service to end users. But options that tip the playing field and distort the market through regulatory advantages would go away. And, for the sake of our broadband future, it’s time for the FCC to exercise its statutory duty to make that happen.