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Tuesday, January 11, 2005

There's Something Rotten Near Detroit
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In October 2004, SBC sought to deregulate business and residential rates in Detroit, Grand Rapids and Lansing. Section 208(2) of the Michigan Telecommunications Act states that, subject to an exception for a TSLRIC price floor, "if a regulated service is classified as competitive, the rate for the service shall be deregulated and not subject to review under this act." The statute seems clear enough on its face - i.e., dear regulators, once you declare a market to be competitive, your work here is done (other than a providing a check against predation).

The Michigan PSC has elected to hold a hearing on the deregulation of residential rates and business rates in "Access Area B" later this year. But let's see how the PSC handled the requested deregulation of business rates, in the most competitive markets of the state, in its initial order:

"[T]he Commission finds that SBC has made a sufficient showing as required [by section 208] to allow the Commission to take immediate action to declare basic local exchange service . . ."

Yes? Yeesssss???

"provisionally competitive throughout SBC's Access Area A provided that some safeguards are put into effect and remain in place."

Huh? But I thought the statute says...

"Specifically, the Commission is persuaded that it should declare business basic local exchange service in SBC's Access Area A competitive for the purposes of a one-year trial period."

Ugh. You just can't let go, can you.

A rough analogy can be drawn between the PSC's underlying rationale here and an unfortunate, though oft-repeated ritual everywhere. UNE-P was a great tool for regulators to show that they were facilitating competitive entry in its heyday - and indeed, with some of the lowest UNE rates in the country, Michigan experienced some of the highest UNE penetration rates. That's called 'getting drunk.' Now, a primary reason for the PSC to impose this one-year trial period is to "assess the effects of the FCC's phase out of UNE-P." That's called 'trying to figure out what the hell I did last night.' And then, of course, the PSC states that "[f]acilities-based alternatives are more likely to be durable and would thus be more effective as a means of stimulating 'actual' competition," which is called 'having a moment of clarity.'

posted by @ 5:19 PM | Communications

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