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Times Have Changed in the Voice Market

05.16.2016

The numerous options for voice communications gives consumers many alternatives to the once-ubiquitous landline phone, which is now used as the sole phone service option by less than10 percent of the country. Yet despite this changed technology landscape, the Federal Communications Commission (FCC) has been slow to lift regulations on companies that provide landline service. The FCC still wants to treat companies that have been the traditional phone providers as “dominant” carriers, subject to stricter rules than their competitors.

Why does this matter? The dominant carrier designation puts one set of companies at a competitive disadvantage, impeding their ability to quickly respond to changes in the marketplace. Dominant carriers once held enough market power to potentially control prices, and FCC oversight was appropriate. Today the market is hugely changed, but the rules have not. USTelecom recently asked the FCC to modernize this process, specifically requesting that the “dominant carrier” designation be removed.

Dominant carriers must give notice seven days in advance of filing a tariff – another way of describing the prices and terms of a provider’s service that the FCC must approve before companies can offer them to customers. And they must wait 60 days before they can file applications to discontinue, reduce or change a service. Competitors can file tariff notices with one day’s notice and with only a 30-day waiting period for applications to make changes to services.

USTelecom believes that continued dominant regulation of the “incumbent local exchange carrier” (ILEC) is simply not warranted by the record or by the current state of the market for switched access voice services. “With an updated record before it demonstrating that ILECs face robust and diverse competition and lack any power they may have once had to control prices regardless of market forces, the Commission’s task is clear and straightforward,” USTelecom’s petition said. The ILECs should no longer be subject to the regulation.

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