FCC Seeks Comment on CenturyLink Petition for Forbearance

March 12, 2012

CenturyLink recently filed a petition with the FCC requesting forbearance from dominant carrier regulations and the Computer Inquiry tariffing requirements for its enterprise broadband services (“Petition”).  Specifically, CenturyLink seeks forbearance from compliance with the dominant carrier tariff filing and price cap regulations, dominant carrier discontinuance and transfer of control requirements as well as the Computer Inquiry tariffing obligations for its enterprise broadband services including Ethernet Transport, Ethernet Virtual Private Line, Local Transport - Synchronous Optical Channel, Customer Connect, Frame Relay Access Service, Asynchronous Transfer Mode Cell Relay Access Service, and Video Frame Services, as well as the Ethernet Virtual Private Link and 270 Mbps Digital Transport Service provided by legacy Embarq. 

CenturyLink argues that the requested forbearance will allow it to obtain more streamlined agreements with customers and will further Commission goals to reduce outdated regulations and implement the National Broadband Plan.  CenturyLink also asserts that since the requested forbearance already has been granted to AT&T, ACS of Anchorage, Embarq, Frontier and Qwest, CenturyLink remains the lone provider of enterprise broadband services subject to these various regulations - a competitive disadvantage that negatively impacts its customers. 

CenturyLink argues that its forbearance request is suitable under any reasonable measures and provides the following analysis of the product and geographic markets for enterprise broadband services and competitive analysis.

  • Product Market - CenturyLink asserts that a separate market for any one of these specific enterprise services by itself does not exist; rather, the high capacity enterprise services should be viewed as a whole group.  On that basis, CenturyLink claims that it is not materially different than other market competitors and provides market share data that it claims supports the Petition. 
  • Geographic Market - The Commission previously has analyzed the market on a nationwide basis and CenturyLink asserts this approach remains consistent with the growing broadband services market and that applying a national market analysis is consistent with CenturyLink’s experiences and its customers’ needs. 
  • Competitive Analysis -  CenturyLink notes that the Commission repeatedly has found that the enterprise broadband market is competitive.  It asserts that such competition has continued to grow and expand with services provided by resellers, CLECs and cable companies.  CenturyLink further argues that it only has a 8.5% market share, far less than AT&T and Verizon, and thus is not a dominant enterprise broadband provider.

Finally, CenturyLink asserts that its forbearance request meets the three statutory requirements. First, the existing regulations are not necessary to ensure the provision of enterprise broadband services are offered in a just and reasonable manner because enterprise broadband service customers exert bargaining power and that the burdens of these regulations outweigh any potential benefit. Second, the existing dominant carriers regulations are not necessary to protect consumers; rather, keeping such regulations will harm consumers who would benefit from the ability to enter agreements with uniform rates, terms and conditions. Third, the Petition is in the public interest because if granted, it will facilitate investment, eliminate outdated and burdensome regulations and enhance competition.

The FCC has issued a public notice requesting comments on the Petition. Comments are due by April 5, 2012 and reply comments are due April 20, 2012.

If you have questions regarding this matter or would like to further discuss these issues, please do not hesitate to contact us:

Andrew D. Lipman

Russell M. Blau


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This article was originally published by Bingham McCutchen LLP.