"Pre-season football is under way, and it appears as if the FCC's special teams are exceptionally strong, notwithstanding its six-month delay of game penalty," said Rep. Upton. "On UNE-P, the FCC has punted a high, hanging one to the states and has given the states vague instructions to return the ball virtually any way they please. Moreover, the FCC kicked-off a deep, long one to the courthouse steps, and I suspect the referees will view it as an instant replay of past UNE decisions which they have struck down. This part of the FCC's ruling is nothing more than negative yards and a major cloud of dust. Investment in facilities-based competition is the real loser here.

"Having said that, it appears as if Chairman Powell and the broadband majority have quarterbacked a significant drive down field with respect to broadband deployment. This is a significant victory for the consumer and the economy, and I congratulate the broadband majority for this," Upton concluded.

"While my staff is still reviewing the approximately 600-page Triennial Review Order, I have come to several preliminary conclusions," said Chairman Tauzin. "First, a majority of the Commission wants the UNE-P to exist forever, as is demonstrated by the fatally-flawed scheme concocted as part of the analysis for determining whether incumbent carriers are required to provide circuit switching to competitors on an unbundled basis. Here are some examples of the flaws I have discovered:

• The so-called triggers established by the majority are unrealistic given the limitation imposed. The triggers are met if three unaffiliated carriers use their own switches in a particular market to serve mass market customers or two such carriers providing wholesale switching services. However, the triggers would not be met even if there were twenty unaffiliated carriers using their own switches to serve enterprise customers. This creates a perverse disincentive to a competitive carrier to use its own switch to serve mass market customers, even if the carrier already uses its switch to serve enterprise customers. And the Commission's data demonstrates the problem inherent in such a policy. Despite the fact that the number of competitively-deployed switches increased from 700 in 1999 to 1300 in 2001, competitors served fewer customers using their own switches in 2002 than in 2000 while the number of customers served via UNE-P has skyrocketed.
• States are given carte blanche to determine what constitutes a market for the unbundling analysis, except that a state regulatory body could not define an entire state as the relevant market. This rule will enable state public utility commissions (PUCs) that want to perpetuate UNE-P to game the definition of a market to ensure that the triggers are never met.
• The majority appears to be obsessed with the hot-cut process and blames incumbent carriers for potential problems that can and should be addressed by the Commission or state PUCs. The Commission has now approved more than 40 applications by Regional Bell Operating Companies (RBOCs) to provide in-region interLATA services. As part of its analysis, the Commission has determined that the RBOCs perform hot-cuts in a manner that permits competitive carriers to enter the market. And despite federal and state performance metrics intended to address larger and larger hot-cut requests, the majority concludes that incumbent carriers could not possibly satisfy large hot-cut orders in a timely fashion if circuit switching did not have to be unbundled. It would seem that the majority is simply using the mere existence of the hot-cut process as an excuse to require incumbents to unbundle circuit switching. If the majority was serious about addressing scale issues related to the hot-cut process, it could and should do so regardless of whether switching is required to be unbundled.
• If the triggers are not met, the states are given infinite latitude to keep UNE-P in perpetuity. The so-called "factors" that the majority provides to the state PUCs to evaluate include everything but the kitchen sink, including factors specifically rejected by the U.S. Court of Appeals for the D.C. Circuit in the USTA decision.
• Instead of the Commission doing its job and making unbundling determinations, the judgment will be made by fifty-one regulatory bodies and will likely be appealed to 12 different federal appellate jurisdictions. This will perpetuate uncertainty for years to come.

"These examples are merely the tip of the iceberg. The decision is fatally flawed and will keep UNE-P alive and well forever.

"I commend Chairman Powell for his leadership on the broadband portion of the Triennial Review. The deregulation of fiber and packet-switched facilities will provide the right incentive for all carriers to deploy these facilities as rapidly and ubiquitously as possible. That type of deregulatory investment climate will hopefully lift our ailing high-tech manufacturing sector out of the doldrums. I only hope that keeping UNE-P in perpetuity does not cloud the entire investment climate so badly that even broadband deployment is affected."