TLJ Articles on FCC UNE Report and Order of February 20, 2003

FCC Announces UNE Report and Order
FCC Order Offers Broadband Regulatory Relief
FCC Announces Decision on Switching
Commentary: Republicans Split On FCC UNE Order
Congressional Reaction To FCC UNE Order

FCC Announces UNE Report and Order

2/20. The Federal Communications Commission (FCC) adopted, but did not release, a report and order regarding the Section 251 unbundling obligations of incumbent local exchange carriers (ILECs). The FCC issued only a short press release [2 pages in PDF] and an attachment [4 pages in PDF] following a divisive meeting.

Highlights of Order. The following is a summary of the major components of the FCC's order:

Fiber to the Home. The Order provides that there is no unbundling requirement for fiber to the home (FTTH) loops.

Hybrid Loops. The Order provides that there is no unbundling requirement for a transmission path over hybrid loops utilizing the packet switching capabilities of their DLC systems in remote terminals. However, ILECs must still provide unbundled access to a voice grade equivalent channel and high capacity loops utilizing TDM technology, such as DS1s and DS3s.

Copper Loops. The Order provides that ILECs must continue to provide unbundled access to copper loops and copper subloops.

Line Sharing. The Order eliminates line sharing as an unbundled network element.

Switching. The FCC stated in its attachment to its release that "The Commission finds that switching -- a key UNE-P element -- for business customers served by high-capacity loops such as DS-1 will no longer be unbundled based on a presumptive finding of no impairment. Under this framework, states will have 90 days to rebut the national finding. For mass market customers, the Commission sets out specific criteria that states shall apply to determine, on a granular basis, whether economic and operational impairment exists in a particular market. State Commissions must complete such proceedings (including the approval of an incumbent LEC batch hot cut process) within 9 months. Upon a state finding of no impairment, the Commission sets forth a 3 year period for carriers to transition off of UNE-P."

Commissioners. This was an order built upon shifting majorities. Identifying each Commissioner's position on each component of the order is difficult, because essentially, they only gave speeches regarding a press release.

However, on key points, this was the breakdown. Commissioners Martin, Copps and Adelstein formed a majority on the switching and state authority aspects of the order. Powell and Abernathy formed a vehement minority. The thunder of their condemnation was directed at this aspect of the order.

On the issue of line sharing, Commissioners Martin, Copps and Adelstein again formed a majority, with Powell and Abernathy dissenting. On other broadband issues Commissioners Powell, Abernathy and Martin formed the majority, with Copps and Adelstein dissenting in part. Thus, it appears that Martin was the critical swing vote, and crafter of the order.

Each of the five Commissioners prepared statements explaining their votes. Most read their statements in full, verbatim, at the meeting. See, statement [PDF] of Michael Powell, statement [PDF] of Kathleen Abernathy, statement of Michael Copps, statement [PDF] of Kevin Martin, and statement [PDF] of Jonathan Adelstein.

Background. Unbundled network elements (UNEs) are those portions of telephone networks that the incumbent local exchange carriers (ILECs, such as Verizon, BellSouth, SBC and Qwest) must make available to competing carriers (including AT&T and WorldCom) seeking to provide telecommunications services. The Telecommunications Act of 1996 provides that ILECs must provide access to certain of their network elements at regulated rates.

The ILECs, and their supporters, have long argued that requiring them to give their competitors access to their facilities at low rates gives the ILECs no incentive to build new facilities. Competive LECs, and their supporters, have argued that such access is necessary to spur competition.

47 U.S.C. § 251(c)(3) provides that ILECs have "The duty to provide, to any requesting telecommunications carrier for the provision of a telecommunications service, nondiscriminatory access to network elements on an unbundled basis at any technically feasible point on rates, terms, and conditions that are just, reasonable, and nondiscriminatory in accordance with the terms and conditions of the agreement and the requirements of this section and section 252 of this title. An incumbent local exchange carrier shall provide such unbundled network elements in a manner that allows requesting carriers to combine such elements in order to provide such telecommunications service."

Section 251 unbundling requirements were created by the 1996 Act. 47 U.S.C. § 251(d)(1) requires that "Within 6 months after February 8, 1996, the Commission shall complete all actions necessary to establish regulations to implement the requirements of this section." More than 6 years later, the FCC is still at the task. On two prior occasions, courts struck down the FCC's unbundling rules. The order announced on February 20 is the FCC's third attempt. Two Commissioners, Powell and Abernathy, and two key members of Congress, Reps. Tauzin and Dingell, have already predicted that a key part of the order -- pertaining to the switching -- will be struck down too.

FCC Meeting. The FCC approved this order at a meeting devoted solely to this matter. An FCC staff member read a brief summary of the report and order to the five Commissioners who sat behind the Commissioners' bench. Then each of the five read a lengthy statement explaining their views. As is customary, there was no debate or discussion. The Commissioners then voted. The item was approved. The meeting ended. Chairman Powell then stepped to the right of the bench to answer questions from reporters, while Commissioner Martin stepped to the left of the bench to answer questions from reporters.

FCC staff, including William Maher, Chief of the FCC's Wireline Competition Bureau (WCB), Brent Olson, Deputy Chief of the WCB's Competition Policy Division (CPD), and Tom Navin, another Deputy Chief of the WCB's CPD, then held a press conference. Reporters struggled to ask pertinent questions about the content of the order, which they had not read, while FCC staff offered answers about the content of the order, which they have not yet written.

The report and order itself has not been completed. FCC Wireline Competition Bureau Chief William Maher was asked after the meeting when the order would be publicly released. He provided no date. The only specificity that he offered was that "I like to estimate things in terms of seasons."

Many major FCC NPRMs, MOOs and ROs are released about a week to ten days after they are approved at a Commission meeting. This report and order may take longer. Commissioner Adelstein (at right), who is the newest Commissioner, stated that "The lights were burning brightly on the eighth floor late last night, and offices reached some agreements on major issues at the eleventh hour -- and I mean that literally, around 11:00. So we understandably haven't yet had the opportunity to review all the language reflecting those cuts." He added that "I am very uncomfortable voting on this item before the offices have seen the draft order, because as we all know, the devil is in the details." Maher stated at the press conference that the order will be "well over 300 pages".

FCC Order Offers Broadband Regulatory Relief

2/20. Federal Communications Commission (FCC) report and order announced on February 20 provides regulatory relief to companies building broadband facilities. FCC Chairman Michael Powell stated that "Today's decision makes significant strides to promote investment in advanced architecture and fiber by removing impeding unbundling obligations. The digital migration journey is one step further along." See, statement [PDF].

The FCC has not yet released the order, and may not release it for some time. However, it did issue a press release [2 pages in PDF] and an attachment [4 pages in PDF] that summarize the high points regarding broadband.

The FCC stated in the attachment to its release that "Incumbent LECs are not required to unbundle packet switching, including routers and DSLAMs, as a stand alone network element. The order eliminates the current limited requirement for unbundling of packet switching."

The FCC also stated: "Fiber to the Home (FTTH) Loops -- There is no unbundling requirement for new build/greenfield FTTH loops for both broadband and narrowband services. There is no unbundling requirement for overbuild/brownfield FTTH loops for broadband services. Incumbent LECs must continue to provide access to a transmission path suitable for providing narrowband service if the copper loop is retired."

The FCC also stated: Hybrid Loops -- There are no unbundling requirements for the packet-switching features, functions, and capabilities of incumbent LEC loops. Thus, incumbent LECs will not have to provide unbundled access to a transmission path over hybrid loops utilizing the packet-switching capabilities of their DLC systems in remote terminals. Incumbent LECs must provide, however, unbundled access to a voice-grade equivalent channel and high capacity loops utilizing TDM technology, such as DS1s and DS3s."

Finally, the FCC stated that "the Commission will no longer require that line-sharing be available as an unbundled element".

The three Commissioner majority on the line sharing issue was made up of Commissioners Martin, Copps and Adelstein. On the other broadband issues, Copps and Adelstein dissented in part. However, they did not enumerate specific components of the order.

Chairman Powell explained his dissent on the line sharing issue. "Most of our policies to promote the goals of the Telecommunications Act have produced little yield to date. However, line sharing has clear and measurable benefits for consumers. It has unquestionably given birth to important competitive broadband suppliers. That additional competition has directly contributed to lower prices for new broadband services.  By some estimates, 40% of DSL providers use line shared inputs. The decision to kill off this element and replace it with a transition of higher and higher wholesale prices will lead quite quickly to higher retail prices for broadband consumers.

He continued that "I also believe the argument that removing line sharing is a form of positive regulatory relief to stimulate broadband is ill-conceived. Line sharing rides on the old copper infrastructure not on the new advanced fiber networks that we are attempting to push to deployment. Indeed, the continued availability of line sharing and the competition that flowed from it likely would have pressured incumbents to deploy more advanced networks in order to move from the negative regulatory pole to the positive regulatory pole, by deploying more fiber infrastructure. This decision actually diminishes the competitive pressure to do so."

Intel CEO Craig Barrett stated in a release that "This was a difficult decision and I applaud Chairman Powell and Commissioners Abernathy and Martin for taking a bold step to promote and accelerate broadband deployment in this country. ... High quality broadband offers a crucial competitive edge for the United States, and it's important that we foster investment in this expensive infrastructure. The FCC's action today restores the balance between risk and potential reward and should encourage companies to deploy new last mile broadband facillities."

Consumer Electronics Association (CEA) P/CEO Gary Shapiro stated in a release that "We just moved one gigantic step closer to America's broadband destiny. While the full report remains to be released, today's vote appears to be a huge win for America's broadband thirsty consumers. The action taken by the Commission today clarifies the regulatory structure of new broadband investment, and lifts the cloud of doubt that has hovered over broadband since passage of the 1996 Telecommunications Act.

Shapiro added that "As a member of the High Tech Broadband Coalition (HTBC), CEA believes excluding new broadband facilities from unbundling obligations is the best approach to broadband deployment and facilities-based competition in the United States. The Commission appears to agree with this belief -- its rule adopted today mirrors HTBC's proposal. Americans now may look forward to an endless array of exciting new bandwidth intensive products and applications to be delivered via cable modem, DSL, fiber, satellite, wireless and innovations yet to enter our minds."

In contrast, AT&T's James Cicconi stated in a release that "the FCC's order grants the Bell companies vastly more deregulation than justified. The Bells will be permitted to deny competitors access to hybrid fiber-copper loops, even for existing fiber and even in markets where customers have no alternatives to the Bell companies' facilities, such as for small business customers. The Bells will also be relieved of their existing line sharing obligations and receive deregulation of new fiber to the home facilities. In short, in one fell swoop, the FCC granted the Bell companies the broadband deregulation they have so aggressively sought for some five years."

FCC Announces Decision on Switching

2/20. The most contentious component of the Federal Communications Commission's (FCC) report and order regarding unbundled network elements adopted on February 20 pertains to the switching element for residential customers.

The FCC has not released the actual order. It did, however, issue a press release [2 pages in PDF] and an attachment [4 pages in PDF] that provide a cursory summary.

Commissioner Kevin Martin, who joined with Commissioners Copps and Adelstein to form a majority on the switching issue, explained his position. He stated that "Some of my colleagues also wish to end the unbundling of all residential switching immediately. I believe such action would be inconsistent with recent court decisions and the state of competition in the market.  It is true that there are now a significant number of residential telephone customers that receive service from a CLEC, but the overwhelming majority of these customers is currently served through an incumbents’ switch. To declare an immediate end to the unbundling of all switching in every market in the country would ignore the Court’s mandate for a more granular analysis and effectively end residential competition.  Accordingly, I support the item’s approach to treat residential switching as we do other network elements, removing unbundling obligations only after a fact specific market analysis." (Emphasis in original.)

He added that "this item provides an important role for the states". He elaborated that "states are better able to make individual, factual determinations about particular geographic markets than are federal regulators in Washington. And, just as we do for other network elements, the Commission provides the states detailed guidelines of what constitutes impairment."

Commission Michael Copps (at right), seconded this view. He stated that "we have instead managed to cobble together a majority for a more reasonable process to conduct a granular analysis that takes into account geographic and customer variation in different markets. We have recognized that the States have a significant role to play in our unbundling determinations. We have understood in many parts of this Order that the path to success is not through preemption of the role of the States, but through cooperation with the States. State Commissions with closer proximity to the markets are often best positioned to make the fact-intensive determinations about impairments faced by competitors in their local markets. I am therefore pleased with our decision that States should have an active part in conducting the granular analysis necessary to determine whether and where network elements such as switching should be available as unbundled network elements."

Chairman Michael Powell and Commissioner Kathleen Abernathy dissented.

Powell (at right) delivered his most angry and eloquent speech yet. He first addressed the importance of switching. He stated that "If switching is available, it is very likely a carrier can resell the entire incumbent's network, at heavily subsidized rates, set by regulators, without having to provide much in the way of its own infrastructure."

He continued that "Facilities based competition means a competitor can offer real differentiated service to consumers -- the switch is the brains of one's network and to be without one is to be a competitor on life support fed by a hostile host. Facilities based competitors own more of their network and can control more of their costs, thereby offering consumers real potential for lower prices. Facilities based competitors offer greater rewards for the economy—buying more equipment from other suppliers (like Lucent, Corning and Nortel) and creating more jobs (the reason CWA supports such a course). And, facilities providers create vital redundant networks that can serve our nation if other facilities are damaged by those hostile to our way of life."

He then fired at his opponents on the Commission. "The Majority apparently is a big fan of UNE-P, because it has contorted the letter and spirit of the statute and the court's interpretation of our responsibilities in an effort to ensure its indefinite preservation. What is remarkable about today’s decision is that one looks in vein to find a clear or coherent federal policy in the choices made by the majority."

"Today's decision clearly steps back from a pro-facilities policy, by favoring extensive regulatory management of incumbent networks to supply the competitive market. More distressing than giving facilities providers the back of their hand, I see no meaningful federal policy put in its place, other than vague and solicitous pronouncements about the states playing the lead role in making these determinations and a commitment to ``competition,´´ no matter how anemic", said Powell.

Powell also discussed, at length, why he believes that the courts will eventual overturn this aspect of the order.

He also addressed its likely economic consequences. He said that "I believe this decision will prove too chaotic for an already fragile telecom market. In choosing to abdicate its responsibility to craft clear and sustainable rules on unbundling to the State Public Utility Commissions the Majority has brought forth a molten morass of regulatory activity that may very well wilt any lingering investment interest in the sector. And, I fear as much or more for CLECs as I do ILECs, for the prolonged uncertainty of rights and responsibilities may prove stifling."

Powell also described this regulatory regime as "Picasso-esque". He added that "I can only imagine how a business plan gets written by a CLEC hoping to enter the local market, not knowing now and not likely to know for years what they will ultimately be entitled to and for how long."

Powell predicted that "The nation will now embark on 51 major state proceedings to evaluate what elements will be unbundled and made available to CLECs. These decisions will be litigated through 51 different federal district courts. These 51 cases will likely be decided in multiple ways -- some upholding the state, some overturning the state and little chance of regulatory and legal harmony among them at the end of the day. These 51 district court cases are likely to be heard by 12 Federal Courts of Appeals -- do we expect they will all rule similarly? If not, we will eventually be back in the Supreme Court of the United States to resolve any conflicts -- the same Court that vacated our excessively permissive unbundling regime in 1999."

He also criticized the majority for asserting a states rights argument. "To explain their decision, the majority has cloaked itself in the drape of ``State's Rights.´´ (a classic conservative mantra not generally associated with a majority of democrats). This is a trivial misuse of a cherished constitutional precept. Congress has established a federal statute and federal policy to promote competition." (Parentheses in original.)

Powell also offered this concluding remark. "I must also note that the impulse to leave much more telecom policy to state commissions may run against the winds of technological change. Communications is converging, distance is fading as a meaningful construct in an internet, cyber-space world, mobility is ascending. These are the circumstances that necessitate, at a minimum, a coherent national framework of rules. States can play important roles in such a regime, but I am of the view that primacy must rest with the national government."

Commissioner Kathleen Abernathy (at right) offered some similar perspectives. She stated that "I am deeply disappointed by the Commission’s resolution of the unbundled switching (UNE-P) issue. Rather than conducting the kind of impairment analysis mandated by the statute and the courts, the Commission has essentially washed its hands of the issue, delegating virtually unbounded authority to state commissions to make their own impairment findings. Rather than creating a clear and predictable regulatory environment, this decision will engender litigation in each of the 50 states and leave all carriers -- whether CLECs or ILECs -- guessing about what their rights and obligations will be in the years to come. And rather than promoting facilities-based competition, this decision creates the possibility that UNE-P will remain ubiquitously available indefinitely, despite powerful record evidence demonstrating that competitors can serve customers using their own switches in many (if not most) areas."

She also quipped that "While lawyers will thrive in this environment, the carriers will become mired in a regulatory wasteland."

Industry Reaction. The incumbent local exchange carriers (ILECs) were the losers in the switching component of the FCC order. Duane Ackerman, Ch/CEO of BellSouth, stated in a release that "If allowed to stand, today's switching decision will mean that regulation continues to stifle capital investment and research and development in the telecom industry. The decision will perpetuate the hostile environment for telecom investment."

He added that "Chairman Powell and Commissioner Abernathy did the right thing today by standing firm on their principles -- to acknowledge where competition now exists, to recognize how competition has now developed among technologies, and to adapt government's role to reflect the fact of the market today. Their approach would have created the environment for more jobs, more competition, innovation and investment. We believe they will be vindicated in court."

Similarly, Tom Tauke, an SVP at Verizon, stated in a release that the FCC "blew it". He said that "Rather than bringing stability, certainty and clarity to the regulatory structure for the industry, the commission left a void and handed off the decision making to the states. This is a recipe for continued disarray in the industry and more litigation."

He added that "The future of telecommunications is broadband, and on this issue the commission appears to have moved in the right direction but may have important details wrong. Moreover, the future investment in the wireline network is tied to a strong financial base for the overall business."

Tauke also said that "I fully expect that Verizon will appeal portions of this order. And Verizon will continue its fight on all fronts -- Congress, courts, states and the FCC -- for real deregulation and real economic growth."

See also, Qwest release and U.S. Telecom Association (USTA) release.

The winners in the switching component of the FCC's order are the providers who seek access to incumbents' facilities at discounted rates. Wayne Huyard, of WorldCom, stated in a release that "A majority of the FCC has voted to preserve competition in the residential local market. This will enable us to continue providing and, indeed, expanding our revolutionary 'all-distance' service, The Neighborhood. Commissioners Martin, Copps and Adelstein are to be commended for crafting a reasonable compromise that recognizes the key role state regulators have played in bringing consumers the lower rates, better service, and innovative products that come only with competition. We are confident that state commissions will continue to make the responsible decisions necessary to keep their local markets open."

He added that the "FCC's rules regarding broadband are highly detrimental to competition. This order prohibits competitors from accessing existing and future fiber in Bell networks, stifling their ability to provide consumers with the benefits of competitive choice."

Similarly, Jim Cicconi, AT&T General Counsel, stated in a release that "We applaud the FCC Commissioners who forged a bipartisan compromise to resolve contentious issues that have dogged this industry for more than half a decade. While the decision grants the incumbent monopolies far more deregulation than warranted, it also should permit AT&T and other carriers to continue to deliver competitive voice and broadband services."

"On the positive side, the majority of FCC Commissioners respected the role and expertise of the states in fostering local telephone competition, and rejected radical proposals that would have killed local competition and led inevitably to a remonopolization of local and long distance telecommunications markets."

Commentary: Republicans Split On FCC UNE Order

2/20. Republican Commissioner Kevin Martin sided with Democratic Commissioners Michael Copps and Jonathan Adelstein to form a majority on several key issues in the FCC's UNE order. Some have construed this as apostasy by Martin. For example, Rep. Billy Tauzin (R-LA) called Martin a "Republican renegade" who led a "palace coup".

The FCC is structured, not as part of a federal department controlled by the President, but as an independent commission. It is headed, not by a single person, but by a five member commission. While the Commissioners are appointed by the President, and confirmed by the Senate, they serve fixed terms, rather than at the pleasure of the President. Moreover, there must be party balance, with the President's party receiving three of the five seats. Thus, a single vote switch can alter outcomes.

However, while the FCC is structured as an independent body, it has rarely performed in that manner on high profile issues. The three members of the President's party typically form a solid voting block. Prior to the election of President Bush, former Chairman Kennard and former Commissioners Ness and Tristani voted together on important matters. Few took note when former Commissioner Furchtgott Roth, a Republican appointee, dissented. Martin, who was an advisor Furchtgott Roth, drafted some of those dissents.

With this UNE order, the Republican majority split on the issues of switching and line sharing. Republican Kevin Martin voted with Democrats Michael Copps and Jonathan Adelstein.

Martin (at right) is a partisan Republican with strong loyalties to President Bush. He worked on the Bush Cheney campaign, and traveled to Florida to work on the election contest. His wife works for Vice President Cheney.

But then, there is essentially no Republican line to follow. The Bush administration has no telecommunications policy. It barely has a broadband policy. The administration took no public position on this UNE proceeding. President Bush's most detailed statement came in a June 13, 2002 off the cuff speech. He said that "This country must be aggressive about the expansion of broadband".

Bush also stated that "Hopefully, we're doing a pretty good job of working to eliminate hurdles and barriers to get broadband implemented. I've fought off -- or worked with Congress, is a better way to put it -- to prevent access taxes on the Internet. It ought to be a tax-free environment in order to encourage use. And, of course, a lot of the action is going to come through the FCC. I know that, you know that. And I'm confident that the chairman and the board is focusing on policies that will bring high speed Internet service, will create competition, will keep the consumers in mind, but to understand the -- kind of the economic vitality that will occur when broadband is more fully accessible."

Neither this speech, nor any other public pronouncement of the Bush administration, provided Powell, Abernathy and Martin with guidance or instructions on how to write their UNE order.

Nor is there a clear Republican position in the Congress. Certainly, Commission Martin went against the clearly and frequently stated policy preferences of Rep. Billy Tauzin (R-LA), and others on the House Commerce Committee. However, the House Republican leadership, like the Senate Republican leadership, has had little to say. Moreover, Sen. John McCain (R-AZ), the Chairman of the Senate Commerce Committee, has not been active on this issue like his House counterpart, Rep. Tauzin. Sen. McCain did not even vote for the the Telecom Act of 1996.

In the absence of such instructions, the FCC Commissioners acted the way the Congress intended when it created the Commission almost seventy years ago -- independently.

Congressional Reaction To FCC UNE Order

2/20. Key members of the House Commerce Committee, which has oversight over the Federal Communications Commission (FCC), praised the FCC's order as it pertained to incenting broadband deployment, but condemned, and predicted the judicial reversal, of the the FCC's order as it pertained to switching.

Rep. Billy Tauzin (R-LA), the Chairman of the House Commerce Committee, stated in a release that "Today's decision is another body blow to the American economy ... Ironically, as President Bush campaigned around the country on behalf of a promising new program to create more jobs and more opportunities, a renegade Republican at the FCC assured the continuation of a tired old program that will only create more layoffs and more misery for working families in the future."

He added that, "Clearly, this marks a low point for the FCC. Despite Chairman Powell's best efforts, and those of Commissioner Kathleen Abernathy, regulatory reform has been stabbed in the back. A palace coup led by Commissioner Kevin Martin has breathed new life into the dying era of big government control over U.S. telecommunications policy. Market forces once again have been shackled by political forces."

"But there is some hope. Just like the rules crafted by Mr. Martin's ideological brothers, Reed Hundt and Bill Kennard, I believe this latest government interventionist policy is destined for the judicial junk pile. The scheme adopted today abdicates the FCC's statutory responsibility and ignores the pervasive deployment of circuit switching. Fortunately, the courts have a better understanding of the Telecommunications Act than Mr. Martin and his pro-regulatory soulmates at the FCC."

"Finally, today's decision once again points out the urgent need for Congress to enact new legislation designed to promote real -- not phony -- competition in the marketplace. Given the FCC's lack of leadership, I am now prepared to immediately begin that debate", said Rep. Tauzin.

Rep. John Dingell (D-MI), the ranking Democrat on the Committee, stated in a release that "Today’s action is a mixed bag for consumers. It appears that the Commission has largely deregulated new investment in broadband networks, and I applaud Chairman Powell for leading the charge on this effort. The Commission’s action, which appears to mirror much of what we attempted to achieve last year in the Tauzin-Dingell bill, should lead to the creation of thousands of new jobs, greater investment in broadband technologies and services, and to the ultimate benefit of millions of Americans through more choices and a more competitive broadband marketplace."

"Unfortunately, the same cannot be said for that part of the decision affecting the local phone marketplace. By effectively permitting the UNE-platform to continue, the FCC appears to have sacrificed the cornerstone and intent of the 1996 Act -- real competition among facilities based competitors. The agency’s decision tosses aside regulatory certainty and the long-term, economic stability of the local phone market for a short term, misguided solution that has no grounding in law. I am confident that this portion of the opinion will be overturned by the courts, and I hope they move quickly to do just that", said Rep. Dingell.

Similarly, Rep. Fred Upton (R-MI), Chairman of the House Commerce Committee's Subcommittee on Telecommunications and the Internet, stated in a release that "I am gravely disappointed with today's ruling by the FCC. It was a serious blow to the American economy. The FCC's ruling was a vote for the status quo and will do little to help an industry that has lost over half a million jobs. It just defies common sense."

However, Rep. Upton added that "There is still hope. The courts will have a crack at this and Congress will surely take a close look to correct the FCC's lapse in judgment. Chairman Powell had it right. The wrangling behind Powell's back during the process was inexcusable. This is a serious matter with American jobs and technology advancement hanging in the balance. We must take the appropriate steps to stimulate competition in the phone industry. Today's decision was a first step -- the process has only just begun."

However, while Reps. Tauzin, Dingell and Upton might have the ability to report a bill out of the Commerce Committee, and perhaps even obtain passage of it in the full House, the Senate might well block any such legislation.

Sen. Ernest Hollings (D-SC), the ranking Democrat on the Senate Commerce Committee, opposed Senate consideration of the Tauzin Dingell bill in the 107th Congress. It was never approved by his Committee. On February 20, he expressed support for the FCC's decision regarding switching and state regulatory authority. He stated in a release that "I am encouraged by the statements of some Commissioners that states will maintain a meaningful role in assuring local competition".