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Federal Register/Vol. 86, No. 5/Friday, January 8, 2021/Rules 1636 Federal Register / Vol. 86, No. 5 / Friday, January 8, 2021 / Rules and Regulations FEDERAL COMMUNICATIONS at: https://docs.fcc.gov/public/ and resale requirements where they COMMISSION attachments/FCC-20-152A1.pdf. stifle technology transitions and broadband deployment, but preserve I. Introduction 47 CFR Part 51 unbundling requirements where they 1. The Telecommunications Act of are still necessary to realize the 1996 [WC Docket No. 19–308; FCC 20–152; FRS 1996 (the 1996 Act) changed the focus Act’s goal of robust intermodal 17221] of telecommunications law and policy competition benefiting all Americans. from the regulation of monopolies to the Modernizing Unbundling and Resale encouragement of robust intermodal II. Background Requirements in an Era of Next- competition. Few of its effects were as 4. The 1996 Act and implementing Generation Networks and Services consequential as ending the local Commission regulations imposed a exchange monopolies held by number of obligations on incumbent AGENCY: Federal Communications incumbent local exchange carriers LECs to promote competitive entry into Commission. (LECs) and opening local markets to the telecommunications marketplace, ACTION: Final rule. competition. To facilitate new entry into including obligations to unbundle the local exchange market, the 1996 Act network elements to other carriers on a SUMMARY: In this document, the imposed special obligations on rate-regulated basis and to offer Commission eliminates unbundling incumbent LECs, including telecommunications services for resale requirements, subject to reasonable requirements to offer these new on a rate-regulated basis. In the 24 years transition periods, for enterprise-grade competitive carriers unbundled network since the passage of the 1996 Act, the DS1 and DS3 loops here there is elements and retail telecommunications Commission has continually reviewed evidence of actual and potential services for resale, both on a rate- and, when warranted, reduced competition, for broadband-capable DS0 regulated basis. incumbent LEC unbundling and resale loops and subloops in the most densely 2. In the nearly quarter-century since obligations to encourage competition populated areas, for operations support the passage of the 1996 Act, the and development of advanced systems nationwide except for the telecommunications marketplace has telecommunications capability within purposes of managing remaining UNEs, transformed from a marketplace the changing communications number portability, and dominated by monopolies to a marketplace. The Commission has interconnection, and for voice-grade marketplace characterized by consistently aimed to promote narrowband loops, multiunit premises competition and technological sustainable facilities-based competition, subloops, and network interface devices innovation. Former monopolist recognizing that permanent unbundling nationwide. The Commission preserves incumbent LECs are now one of many obligations can reduce incentives for unbundling requirements for DS0 loops intermodal competitors, facing fierce both incumbent and competitive LECs in less densely populated areas and DS1 competition from competitive LECs, to deploy next-generation networks. and DS3 loops in areas without cable providers, and wireless providers, sufficient evidence of competition. The among others. And that competition has A. The 1996 Act’s Market-Opening Commission further eliminates itself shifted from siloed markets to the Provisions unbundled dark fiber transport internet, as increasingly local and long 5. Before the enactment of the 1996 provisioned from wire centers within a distance voice, data, video, and nearly Act, incumbent LECs controlled more half-mile of competitive fiber networks, all communications technologies are than 99% of the local voice marketplace but provides an eight-year transition delivered via broadband connections. because of their ‘‘virtually ubiquitous’’ period for existing circuits so as to avoid The Commission has repeatedly networks and subsequently low relative stranding investment and last-mile adjusted the incumbent LEC-specific incremental costs. To open this deployment by competitive LECs that obligations in the 1996 Act to account monopolized market, Congress required, may harm consumers. The Report and for changed circumstances. among other things, incumbent LECs to Order also forbears from remaining 3. In this document, we continue on offer their competitors unbundled Avoided-Cost Resale obligations. In all, that path of modernizing our network elements and the Commission ends unbundling and unbundling and resale regulations. We telecommunications services for resale resale requirements where they stifle eliminate unbundling requirements, on a discounted basis. technology transitions and broadband subject to a reasonable transition period, 6. Unbundled Network Elements. deployment, but preserves unbundling for enterprise-grade DS1 and DS3 loops Section 251(c)(3) of the requirements where they are still where there is evidence of actual and Communications Act of 1934, as necessary to realize the 1996 Act’s goal potential competition, for broadband- amended (the Act) sets forth incumbent of robust intermodal competition capable DS0 loops in the most densely LECs’ unbundling obligations. benefiting all Americans. populated areas, and for voice-grade Following Congress’s directive that the DATES: Effective February 8, 2021. narrowband loops nationwide. But we Commission determine which network preserve unbundling requirements for elements should be subject to the FOR FURTHER INFORMATION CONTACT: For DS0 loops in less densely populated unbundling rules, the Commission further information, please contact areas and DS1 and DS3 loops in areas created a list of unbundled network Megan Danner, Competition Policy without sufficient evidence of elements (UNEs) that competitive LECs Division, Wireline Competition Bureau, competition. We eliminate unbundled can lease from incumbent LECs in order at [email protected], dark fiber transport provisioned from to provide competitive local service. 202.418.1151. wire centers within a half-mile of When identifying network elements SUPPLEMENTARY INFORMATION: The full competitive fiber networks, but provide subject to unbundling obligations, text of this document, WC Docket No. an eight-year transition period for section 251(d)(2) requires that the 19–308; FCC 20–1522, adopted on existing circuits so as to avoid stranding Commission consider, ‘‘at a minimum,’’ October 27, 2020, and released on investment and last-mile deployment by whether ‘‘the failure to provide access to October 28, 2020, is available for public competitive LECs that may harm such network elements would impair inspection on the Commission’s website consumers. In all, we end unbundling the ability of the telecommunications VerDate Sep<11>2014 22:56 Jan 07, 2021 Jkt 253001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\08JAR2.SGM 08JAR2 tkelley on DSKBCP9HB2PROD with RULES2 Federal Register / Vol. 86, No. 5 / Friday, January 8, 2021 / Rules and Regulations 1637 carrier seeking access to provide the revenue to support the development of forbearance criteria have been satisfied, services that it seeks to offer.’’ The their own competitive facilities. The and ‘‘the agency [may] reasonably statute also requires that the Commission also recognized that rural interpret[] the statute to allow the Commission determine whether access areas face higher deployment costs and forbearance analysis to vary depending to proprietary network elements is longer deployment timeframes. on the circumstances.’’ When the ‘‘necessary.’’ However, the Commission 9. Avoided-Cost Resale. In addition to Commission undertakes a competitive does not currently require incumbent unbundling obligations, section 251 analysis, ‘‘the statute imposes no LECs to make any proprietary network includes an Avoided-Cost Resale particular mode of market analysis or elements available on an unbundled provision that requires incumbent LECs level of geographic rigor.’’ In addition, basis. The identified UNEs were then to to ‘‘offer for resale at wholesale rates the Commission can consider the be made available at cost-based rates. any telecommunications service that the section 706 goal of fostering the Parties may negotiate agreed-upon rates carrier provides at retail to subscribers deployment of advanced for UNEs, which the state must then who are not telecommunications telecommunications capabilities in approve. If the parties cannot come to carriers.’’ Congress defined the making forbearance decisions. In an agreement, the rates are set by state methodology to determine wholesale considering forbearance from arbitration and will be ‘‘based on the rates as ‘‘retail rates . excluding the unbundling obligations, the cost (determined without reference to a portion thereof attributable to any Commission is entitled to rely on its rate-of-return or other rate-based marketing, billing, collection, and other expert predictive judgment and may proceeding) of providing the costs that will be avoided by the local balance ‘‘the positive short-term impact interconnection or network element’’ exchange carrier.’’ As a practical matter, of unbundling’’ against the ‘‘longer-term and ‘‘may include a reasonable profit.’’ incumbent LECs implement this positive impact that not unbundling 7. The impairment inquiry considers Avoided-Cost Resale obligation by would have . .’’ Furthermore, the whether a hypothetical ‘‘reasonably incorporating
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