Policy Documents

NCTA: Petition for Declaratory Ruling with FCC on Section 652

Rick Chessen, Neal Goldberg, Steven Morris –
June 21, 2011

The problems created by the Commission's failure to clarify Section 652's reach have become particularly acute. Many CLECs are struggling to raise capital. CLEC-cable combinations provide a unique opportunity to mount an effective challenge to incumbent LECs, which maintain a dominant position in serving business customers, the principal customer segment served by CLECs, in most areas. But Section 652 has emerged as a potentially insurmountable and wholly unjustified hurdle to cable acquisitions of CLECs, untethered from its purpose. To remove this unnecessary barrier to transactions that do not implicate the concerns underlying Section 652, the Commission should issue a declaratory ruling clarifying that Section 652 does not restrict transactions between CLECs and cable operators. The fact that the hurdles associated with an expansive construction of Section 652 could prevent such a transaction, together with the likelihood that resolving this interpretive question in the context of a particular transfer-of-control application would cause undue delay, warrants declaratory relief in advance of any particular transaction.