Comment Sought on Market Analysis for CenturyLink Forbearance Petition
Federal Communications Commission
News Media Information 202 / 418-0500
445 12th St., S.W.
Washington, D.C. 20554
Released: June 20, 2014
WIRELINE COMPETITION BUREAU SEEKS COMMENT ON APPROPRIATE MARKET
ANALYSIS FOR CENTURYLINK ENTERPRISE FORBEARANCE PETITION
WC Docket No. 14-9
Comment Date: July 7, 2014
Reply Comment Date: July 14, 2014
On December 13, 2013, CenturyLink filed a petition pursuant to section 10 of the Communications
Act of 1934, as amended (Act),1 requesting that the Commission forbear from “dominant carrier
regulation and the Computer Inquiry tariffing requirement with respect to all of its packet-switched and
optical transmission services (together ‘enterprise broadband services’) that are still subject to those
obligations.”2 Due to a series of mergers, CenturyLink’s enterprise broadband services are subject to
different degrees of regulation depending on which CenturyLink affiliate—Qwest, Embarq, or
CenturyTel—historically provided service in the area.3 To assist the Commission in evaluating
CenturyLink’s petition, we invite comment on our proposed method, set forth below, for defining the
relevant market or markets at issue, and analyzing the level of competition within the market(s).
In its petition, CenturyLink asserts that the relevant geographic market for analyzing competition
for these enterprise broadband services is the entire country.4 CenturyLink notes that the Commission
1 47 U.S.C. § 160.
2 Petition of CenturyLink for Forbearance Pursuant to 47 U.S.C. §160(c) from Dominant Carrier Regulation and
Computer Inquiry Tariffing Requirements on Enterprise Broadband Services, WC Docket No. 14-9, at 1 (filed Dec.
13, 2013) (Petition). Specifically, CenturyLink seeks forbearance from 47 U.S.C. §§ 203, 204(a)(3), 47 C.F.R.
§§ 1.54(a)(1), (e)(1), 61.31–61.59, 63.03, 63.71, and requirements from related Commission Orders. Petition at 7-8.
CenturyLink “stipulate[d] that any grant of this petition would be superseded by the outcome of any [ ] industry-
wide proceeding.” Id. at 9. CenturyLink also filed an alternative petition for interim waiver, requesting that, “in the
event that the Commission does not grant CenturyLink’s simultaneously filed petition for forbearance, the
Commission should grant an interim waiver of its dominant carrier regulations and the Computer Inquiry tariffing
requirement with regard to CenturyLink’s enterprise broadband services until such time as the Commission resolves
how all incumbent enterprise broadband services should be regulated in an industry-wide context.” CenturyLink
Alternative Petition for Interim Waiver, WC Docket No. 14-9, at iii (filed Dec. 13, 2013).
3 Petition at 5.
4 Id. at 16-17. CenturyLink seeks forbearance relief for the following services: Ethernet Private Line, Ethernet
Virtual Private Line, Synchronous Optical Channel Services, Local Transport – Synchronous Optical Services,
Video Transmission, Wave, Frame Relay and ATM. Id. at Attach. 1.
conducted its analysis of enterprise broadband services on a national basis when it granted forbearance
petitions in 2007-08, and asserts that the Commission should define a nationwide market when evaluating
its pending forbearance petition.5
More recently, however, the Commission used a traditional market
power framework to evaluate competition when evaluating a forbearance petition.6 The Qwest Phoenix
Order laid out specific criteria for defining markets and assessing market power.
As the Commission
noted, “[t]he traditional market power framework enables us to respond to a petition for forbearance by
evaluating the record evidence of actual and potential competition, and considering whether there is
evidence of sufficient competition to conclude that forbearance is warranted.” 7
The Commission’s analysis of forbearance from dominant carrier regulation is not bound by a
particular analytical framework. As the D.C. Circuit has held, section 10 “imposes no particular mode of
market analysis or level of geographic rigor,” but rather “allow[s] the forbearance analysis to vary
depending on the circumstances.”8
The Commission also has recognized the need to balance the precision
obtained by analyzing competition at a granular or disaggregated level with the pragmatic need to
evaluate competition at an aggregated level.9
CenturyLink asserts that the relief it requests would permit it to compete more easily for nationwide
CenturyLink’s petition for forbearance, however, is not confined to customers seeking
nationwide or large scale contracts, but would encompass smaller, local customers that might be less
5 See, e.g., Petition of AT&T Inc. for Forbearance Under 47 U.S.C. § 160(c) from Title II and Computer Inquiry
Rules with Respect to Its Broadband Services, Petition of BellSouth Corporation for Forbearance Under 47 U.S.C.
§ 160(c) from Title II and Computer Inquiry Rules with Respect to Its Broadband Services, WC Docket No. 06-125,
Memorandum Opinion and Order, 22 FCC Rcd 18705, 18718, para. 21 (2007); Qwest Petition for Forbearance
Under 47 U.S.C. § 160(c) from Title II and Computer Inquiry Rules with Respect to Broadband Services, WC
Docket No. 06-125, Memorandum Opinion and Order, 23 FCC Rcd 12260, 12272-73, para. 23 (2008).
6 See Petition of Qwest Corporation for Forbearance Pursuant to 47 U.S.C. § 160(c) in the Phoenix, Arizona
Metropolitan Statistical Area, WC Docket No. 09-135, Memorandum Opinion and Order, 25 FCC Rcd 8622, 8642,
para. 37 (2010) (Qwest Phoenix Order): “We thus return to a traditional market power framework, which the
Commission established in the Competitive Carrier proceedings and developed further in subsequent decisions, to
evaluate competition in telecommunications markets in forbearance proceedings such as this one. This approach also
is comparable to the analysis used by the DOJ, FTC, and telecom regulators in other countries, including those in the
European Community, to determine the extent of competition in a market.” (Footnotes omitted.) The Department of
Justice released revised Horizontal Merger Guidelines in 2010. See
7 Qwest Phoenix Order, 25 FCC Rcd at 8646-47, para. 42. “Specifically, our market power analysis begins by
defining the relevant product and geographic markets and by identifying the market participants. Next, we perform
an analysis, in which we examine available evidence regarding market shares and evaluate whether potential entry
could occur in a timely, likely, and sufficient manner to counteract the exercise of market power by Qwest or by
Qwest in concert with a few competitors. Based on this finding, we determine whether the regulations at issue
remain necessary to protect against ‘unjust and unreasonable’ rate increases and are ‘necessary for the protection of
consumers,’ and whether forbearance would not be ‘consistent with the public interest,’ as required by section 10 of
the Act.” Id. That Order also noted, however, that “a different analysis may apply when the Commission addresses
advanced services, like broadband services.” Id. at 8644-45, para. 39.
8 EarthLink v. FCC, 462 F.3d 1, 8 (D.C. Cir. 2006).
9 See, e.g., AT&T Inc. and BellSouth Corporation Application for Transfer of Control, WC Docket No. 06-74,
Memorandum Opinion and Order, 22 FCC Rcd 5662, 5700, para. 68 (2007) (subsequent history omitted).
10 Petition at 4-5, 55-56.
likely to have competitive alternatives.11 The level of competition may not be uniform for all customers
that fall within the scope of CenturyLink’s petition. Therefore, we believe that assessing whether and
how competition for these services varies across customer classes is critical to analyzing CenturyLink’s
request in accordance with the criteria set forth in section 10 of the Act. We propose that our market
analysis account for potential differences in competition for enterprise broadband services among various
customer classes (e.g., small and medium businesses, as opposed to large enterprise customers; customers
with localized or low-volume needs versus those with needs for nationwide contracts). We welcome
comment on this proposal and on how we should delineate customer classes. We believe that an analysis
that recognizes the potential for varying levels of competition among customer classes will provide a
sound framework to consider CenturyLink’s assertion that it competes in a nationwide market for the
provision of broadband enterprise services. We also believe that such an approach applies the traditional
market power approach that the Commission used in the Qwest Phoenix Order to the facts before us in
this petition, and is consistent with competitive market analyses routinely used by the Department of
Justice and the Federal Trade Commission.12
We intend to issue a data request to help us determine the level of competition that various
customer classes face for the enterprise broadband services at issue in CenturyLink’s forbearance petition.
That data will improve our ability to analyze competition for the relevant services and allow us to assess
whether competition varies for different types of customers.
Interested parties may file comments and reply comments on or before the dates indicated above.
Comments are to reference WC Docket No. 14-9, and may be filed on paper copies or by using the
Commission’s Electronic Comment Filing System (ECFS).
Electronic Filers: Comments may be filed electronically using the Internet by
accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/.
Paper Filers: Parties who choose to file by paper must file an original and one
copy of each filing. Filings can be sent by hand or messenger delivery, by
commercial overnight courier, or by first-class or overnight U.S. Postal Service
mail. All filings must be addressed to the Commission’s Secretary, Office of the
Secretary, Federal Communications Commission.
All hand-delivered or messenger-delivered paper filings for the
Commission’s Secretary must be delivered to FCC Headquarters at 445 12th
St., SW, Room TW-A325, Washington, DC 20554. The filing hours are 8:00
a.m. to 7:00 p.m. All hand deliveries must be held together with rubber
11 See, e.g., Qwest Phoenix Order, 25 FCC Rcd at 8656, para. 63 (“[C]arriers treat small enterprise customers
differently from larger business customers, both in the way they market their products and in the prices they
charge”); COMPTEL Opposition, WC Docket No. 14-9, at 6-7 (filed Feb. 14, 2014) (“[R]egulatory policies for
wholesale access [affect] competition in the downstream markets for retail broadband services provided to small
businesses”; prior deregulation has limited “‘the ability of smaller carriers—often those specializing in serving niche
markets such as [small to mid-size businesses]—to gain access to the necessary inputs to compete,’” citing the
National Broadband Plan at 47).
12 See supra note 6. We also note that using this approach is not intended to affect or prejudge separate, industry-
wide proceedings that might assess competitive market conditions. We note accordingly CenturyLink’s stipulation
that the forbearance proceeding would be superseded by the outcome of any industry-wide proceeding. See Petition
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The proceeding described in this Notice is being treated as a “permit-but-disclose” proceeding in
accordance with the Commission’s ex parte rules.13 Persons making ex parte presentations must file a
copy of any written presentation or a memorandum summarizing any oral presentation within two
business days after the presentation (unless a different deadline applicable to the Sunshine period applies).
Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation
must (1) list all persons attending or otherwise participating in the meeting at which the ex parte
presentation was made, and (2) summarize all data presented and arguments made during the
presentation. If the presentation consisted in whole or in part of the presentation of data or arguments
already reflected in the presenter’s written comments, memoranda or other filings in the proceeding, the
presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or
other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be
found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission
staff during ex parte meetings are deemed to be written ex parte presentations and must be filed
consistent with rule 1.1206(b). In proceedings governed by rule 1.49(f) or for which the Commission has
made available a method of electronic filing, written ex parte presentations and memoranda summarizing
oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment
filing system available for that proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt,
searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission’s ex
For further information, please contact Alex Johns, Competition Policy Division, Wireline
Competition Bureau, at (202) 418-1167 or Alexis.Johns@fcc.gov.
- FCC -
13 47 C.F.R. §§ 1.1200 et seq.; Pleading Cycle Established for Comments on CenturyLink Petitions for Forbearance
from or Interim Waiver of Dominant Carrier and Computer Inquiry Tariffing Requirements on Enterprise
Broadband Services, WC Docket No. 14-9, Public Notice, 29 FCC Rcd 254, 255 (Wireline Comp. Bur. 2014).
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