On Granting Forbearance

September 19th, 2008 by · Leave a Comment

Once again, Dave Rusin over on Telecom Straight Shooter has taken on the issue of forbearance, arguing forcefully against most of the current crop of CLECs.  He'd like us all to step back from regulation and let the market produce the business case for laying fiber to all those buildings.  Very much the laissez faire purist approach, certainly, and quite appealing when put that way.

The argument against it is easy enough to construct though.  Remember Ma Bell?  Nobody else found it economical to string new copper everywhere then, why would it be different this time?  I have even heard it argued that it is the nature of telecom infrastructure to naturally gravitate toward monopoly when unregulated.  Once truly national scale has been achieved once, it is hard to replicate economically.

On the other hand, he is absolutely right on many counts.  Forcing the ILECs to lease at regulated rates only makes it harder for true competition to ever emerge, because the CLEC/ILEC relationship has never been and will never be a healthy one.  It is entirely dependent on artificial constructs whose relevancy fades faster than politicians can agree to change them.

So Dave, to get me to jump off the fence and onto your bandwagon, can you answer this question?  If all such forbearances were granted and the government stops watching, what will stop the ILECs from doubling prices where there isn't competition and cutting prices in half where there is - thus ending the business case for anyone else to hook up more buildings with fiber?  In other words, does granting forbearance necessarily lead to more choice?

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Categories: CLEC · Government Regulations · Metro fiber

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