WASHINGTON, August 2, 2019—Recognizing sweeping changes over the past two decades in the market for voice telephone service, the Federal Communications Commission issued an Order today granting certain local phone companies relief from two 1996-era regulatory obligations that no longer serve their intended purpose. 

Specifically, the FCC granted certain legacy telephone companies (called price cap incumbent local exchange carriers (LEC)) relief from outdated and burdensome requirements from the Telecommunications Act of 1996 designed to foster competition in the market for local telephone service—(1) a requirement they offer competitors “analog voice-grade copper loops” on an unbundled basis at regulated rates and (2) a requirement they offer legacy services for resale at regulated rates.  The communications marketplace has transformed over the past twenty years, with consumers migrating away from plain old telephone service provided over copper wires by their local telephone company toward newer, any-distance voice services provided over next-generation networks by cable, mobile and fixed wireless, and over-the-top VoIP providers. In fact, according to the FCC’s latest published data, of the nearly 455 million active voice subscriptions in the United States, only 55.8 million were provided by incumbent LECs.  

Rather than providing a foothold for new entrants into the voice marketplace, these decades-old requirements have become a vice, trapping incumbent LECs into preserving and prolonging dependence on outdated technologies and services and artificially delaying the migration to next-generation networks and services that benefit American consumers and businesses.  The Order therefore relieves incumbent LECs of these requirements and, in turn, eliminates costly mandates that deter investment by incumbent LECs and competitive LECs alike and accelerates the transition to next-generation networks and services.  

To enable competitive LECs and their customers to make alternative voice service arrangements following forbearance, today’s Order provides a three-year transition period.  The Order also provides a five-year transition period for Puerto Rico to account for the devastation to communications infrastructure in that territory from the 2017 hurricanes.

The Order does not forbear from unbundling obligations enabling the provision of broadband services.  On July 1, USTelecom withdrew its remaining requests for forbearance from those obligations.

This Order is the Commission’s third action on USTelecom’s forbearance petition.  In April 2019, the Commission unanimously granted relief from other unnecessary 1996-era regulations, including the requirement that small, rural carriers set up separate affiliates to provide-in-region long distance service and the requirement that incumbent LECs submit reports about their legacy special access services.  And in July 2019, the Commission unanimously granted partial relief from requirements that price cap incumbent LECs provide their competitors with legacy transport facilities—known as DS1 and DS3 transport—on an unbundled basis at regulated rates.