Sometimes no decision is a decision. Verizon in 2004 petitioned the FCC to lift regulations on broadband data services it sold to business customers. Had the FCC wanted to deny the petition, it was obliged to do so by midnight Sunday. The FCC’s failure to act allowed the regulations to lapse.
The inaction was directly due to one of the five seats on the commission being empty. The two Democratic Commissioners opposed Verizon’s petition as anti-competitive in that it would harm rival phone companies, but could not get around a 2-2 voting deadlock. That said, the fifth commissioner would have been a Republican appointee, and given the current political climate, would very likely have voted to grant Verizon’s petition anyway.
The result is that Verizon Communications will now be able to exempt broadband data services provided to large enterprise and wholesale customers from rules regarding tariff filings and price requirements. Verizon cannot now be compelled to connect to competitors’ networks, negotiate contracts with rivals, and will not have to pay into the Universal Service Fund from its revenues generated from the services under consideration, which are classified as “special access.”
These events will likely spur two responses: AT&T will no doubt file a similar petition, and Verizon’s and AT&T’s telephone rivals are likely to file legal challenges.