FCC Rejects SBC's VoIP Bid

Agency rules its broader IP review pre-empts SBC's petition to free broadband networks from legacy telecom regulations.

By Roy Mark | Posted May 6, 2005
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The Federal Communications Commission (FCC) said Thursday SBC is jumping the gun in its petition to exempt IP (IP) platforms from rules and regulations that apply to common carriers.

On a 4-0 vote, the FCC rejected SBC's request to free its broadband networks and services, such as Voice over IP , from the myriad regulations and government-mandated rates currently imposed on its legacy, copper-wire systems.

The FCC is currently reviewing all IP-based services and ruled that SBC's petition would require the agency to "prejudge important issues pending in broader rulemakings."

The FCC also said SBC's petition was procedurally flawed because it asked for exemptions that "may not even apply to the facilities and services in question."

Even though the agency turned down SBC's request, new FCC Chairman Kevin Martin said the issues raised by SBC are "important ones" that require the commission's attention.

"As I have said on many occasions, and reiterate now as chairman, investment in broadband facilities, such as the IP platforms at issue here, is critical to providing American consumers with 21st-century advanced services," Martin said in a statement issued Thursday night.

Martin added that one of the FCC's core priorities is promoting broadband networks and that the agency's now more-than-a-year long IP review is aimed at creating a level playing field for all similarly situated service providers.

"The removal of legacy regulations should spur investment and the deployment of new packetized networks and facilities that will bring new broadband services to all Americans," he continued.

James C. Smith, a senior vice president of SBC, issued his own statement Thursday night. Although he expressed disappointment over the ruling, he said SBC is encouraged the FCC plans to take the issues head-on over the next few months.

"While we had hoped that the FCC today would embrace the opportunity our petition offered to conclusively set a policy framework for the converging world of communications, we also remain optimistic," Smith said. "And we are confident that the FCC will decide conclusively in favor of investment and deployment in broadband networks."

In March, broadband wholesaler Level 3 Communications withdrew a similar petition seeking an FCC ruling on the rates Voice over IP providers pay incumbent telephone companies to complete Internet telephony calls over the public switched telephone network (PSTN).

In Thursday's ruling, the FCC noted SBC's opposition to the Level 3 petition.

"SBC itself argued ... that by trying to force commission action ... Level 3 sought to 'jump out ahead of the commission in intercarrier compensation reform by obtaining a quick, self-serving fix ... without the slightest regard for how such piecemeal relief would complicate resolution of all the other issues,'" the FCC's order states.

Level 3 said in March it pulled its petition in deference to Martin's appointment to replace former Chairman Michael Powell.

"Given the appointment of new leadership only three business days before the statutory deadline for ruling on the petition, we determined it was inappropriate to ask the agency to resolve this important issue in the timeframe required by law," Level 3 CEO James Q. Crowe said after withdrawing the petition.

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