The FCC has followed APT's recommendation to issue a Notice of Proposed Rulemaking (NPRM) together with a legally required Notice of Inquiry (NOI) to implement Section 706 of the 1996 Telecommunications Act and to determine if the "ubiquity" objective of "deploying advanced telecommunications capability to all Americans..." is being met.

The good news is that the NPRM would break a serious logjam that has stymied investments in high capacity bandwidth so essential to delivering the advanced communications and information services of the digital age. The FCC needs to be commended for this. But there is a downside that goes with the good news that must be confronted head on. The Commission's framework for breaking the log jam, unfortunately, presents major problems for community-based organizations--particularly community technology applications centers and organizations representing impoverished people--which have as their central purpose the diffusion of the advanced technologies to address the life needs of urban communities and rural areas "marginalized" by the operation of competitive market forces. The NPRM proposes a competitive framework for deploying advanced network capability that is both legally questionable and excessively and unnecessarily tilted to the high-margin, high-end of the market, seriously exacerbating marketplace problems of reaching marginalized communities at risk of being by-passed by competitive forces.

The framework has all the elements of fairness to both incumbent local exchange carriers (ILECs) and competitive local exchange carriers (CLECs). Under the legal theory advanced by the FCC, subsidiaries may be created by the regional Bell companies (RBOCs) to offer competitive high capacity services, as long as they function in relation to the ILECs the same as CLECs. This is the desired end, but creating a subsidiary in the image of a CLEC amounts to an economic mandate for the new affiliate of the ILEC to behave exactly like the CLECs which, in the main, are focused on the high end of the market.

Unless the FCC (and its state counterparts) can be convinced to advance pro-active policies to bridge the widening digital divide, the so-called electronic superhighway is destined to remain a dirt path to marginalized communities, leaving millions in the dust of the digital age

APT believes strongly that these proactive policies are crucial to the work of community-based organizations, which are also the primary membership base of APT. Underlying our viewpoint is recognition that the convergent communications and information technologies of the digital age are shaping the future of community life. As market forces are unleashed to develop and deploy them, however, there is growing concern from the President on down that the marketplace is actually laying an advanced infrastructure base for another round of economic and social polarization of the society.

A central point in APT's comments for both the NPRM and the NOI is that the downside of using subsidiaries as a tool to advance competition heightens the necessity of responding to our pro-active policy recommendations outlined below. Removing barriers and disincentives to facilities-based infrastructure investments must be coupled with policies to make the marketplace work for everyone. That is the heart of the Section 706 mandate of the Congress.

URGENT ACTION REQUIRED

As indicated more specifically below, action is needed now to urge the FCC to support pro-active policies advocated by APT--policies that are specifically designed to expand the reach of competitive market forces to effectively serve the communications and information needs of "marginalized" communities, both urban and rural. As outlined in APT's 706 filing with the FCC earlier this year, the central purpose of the Alliance's pro-active policies is to develop a resource base for supporting community-based vehicles and mechanisms which would make it feasible for competitive providers to both (a) access the innovative capacity of marginalized communities and (b) to develop and deploy community-based applications of the advanced technologies applications which have the proven capability of enhancing the conditions of life and labor of people working and living in them.

In this connection, in a recent speech to the Urban League, FCC Chairman Kennard has indicated that he intends to take the Commission to rural and urban areas across the country to determine how competitive providers of communications and information services are meeting the "ubiquity" commitment of Section 706 in the deployment of high capacity infrastructure. Community-based organizations, which are actively pursuing the equity objectives of this key policy in Section of the 1996 Act, should commend the Chairman. Most importantly, he needs to be actively supported and encouraged to visit communities, urban and rural, where the digital divide prevails, and where it is getting wider as the Commission gives highest priority to establishing a level playing field for competitors and only short-shrift to how competition is actually playing out for major sectors of the society.

BACKGROUND AND SUPPORTING INFORMATION