Verizon High-Speed Services Deregulated

By Arshad Mohammed
Washington Post Staff Writer
Tuesday, March 21, 2006

The Federal Communications Commission yesterday deregulated a host of high-speed data services that Verizon Communications Inc. offers to business customers, a move critics said could sweep away decades of rules governing the company's pricing and practices.

The agency exempted Verizon from having to file proposed prices with the government and lifted the requirement that it provide competitors access to its high-speed business lines. FCC Chairman Kevin J. Martin said freeing Verizon of many "common carrier" obligations on those lines will give the company "the flexibility to further deploy its broadband services and fiber facilities without overly burdensome regulations."

Critics, however, said the FCC went too far. Among other things, telecom lawyers said the decision will allow Verizon to charge businesses what it wants for such lines. While large companies are likely to bargain effectively, smaller companies may see their costs rise.

The outcome reflected deep divisions on the commission, with Republicans Martin and Deborah Taylor Tate saying they favored giving Verizon what it wanted to accelerate the deployment of high-speed broadband services and Democrats Michael J. Copps and Jonathan S. Adelstein vehemently opposing it.

The FCC, which is split evenly between the two Republicans and two Democrats, did not vote to ease the rules on Verizon but rather exempted it under a statute that allows a company's request to be approved unless the agency denies it within a set period. That period expired Sunday, allowing the request to go through automatically -- a rare event at the FCC.

"I am deeply disappointed," Copps said in a written statement. "This is not the way to make environment-altering policy changes."

Copps suggested that Verizon could be freed from some obligations to cooperate with federal wiretapping statutes, from federal privacy protections and from obligations to pay into the Universal Service Fund, which subsidizes service in poor and rural parts of the country.

"Here we permit a . . . petition [to] go into effect that erases decades of communications policy in a single stroke. In effect, we provide industry the pen and give it the go-ahead to rewrite the law," he added.

"The chairman's action yesterday represents the height of irresponsibility by a federal official," said Earl Comstock, head of the Comptel trade association, which represents smaller phone companies. "With this action the chairman's has unilaterally abdicated the commission's responsibilities with respect to oversight of Verizon's common carrier service offerings. As a result, competition and consumers are now at the mercy of Verizon's financial self-interest."

Verizon said the FCC's move would lead to more competitive pricing and give it greater flexibility to serve its business customers.

"We are appreciative that supporting Commissioners recognized changes in technology and the marketplace," Susanne Guyer, Verizon senior vice president for federal regulatory affairs, said in a statement. "The end result will be greater innovation, more competitive pricing and more flexible arrangements tailored to meet the needs of our business customers."

© 2006 The Washington Post Company