APT has taken the lead nationally in pressing the FCC to implement Section 706, which we urged to be included in the 1996 Act. Early on, as the Act was being implemented, we urged the Commission to integrate the 706 commitment to "ubiquity" with all of its major orders affecting universal service commitments, interconnections of competitors with dominant, incumbent local exchange carriers (ILECS), and related fees for accessing local exchanges. In the spring of 1998, we specifically addressed the consequences of the Commission having failed to address Section 706's implementation in each of those proceedings. Given the legal requirement that the Commission issue an order instituting an inquiry (NOI) by August 6, 1998, to determine how the implementation was going forward, APT filed a lengthy petition urging the Commission to take specific action (a) to remove barriers to facilities-based competition and advanced infrastructure deployment that it had erected in its network "unbundling/wholesale resale" approach to promoting competition in ILEC-dominated local exchange markets, and (b) to combine the removal of barriers to investments with specific pro-active polices which are essential to overcoming the limitations of market forces in reaching out to the full spectrum of society in deploying advanced telecommunications capability. Because time was running out, we urged the Commission to start an NPRM proceeding in addition to the NOI.

Regarding removal of barriers to advanced infrastructure deployment, a key APT recommendation was for the Commission to distinguish network services which deploy high-capacity bandwidth from the traditional low-capacity services which are required, under Section 251 (c), to be unbundled for competitive wholesale/ resale of local exchange services--the local loop, linking homes and business to central offices. In the context of competing technologies for advanced data networks linked to the Internet, the application of the unbundling wholesale/resale platform to the deployment of high capacity bandwidth was a clear disincentive to investments in advanced infrastructure by the ILECs--a disincentive that the Commission now seeks to address in its recently-issued NPRM. Based on the legal viewpoint that the Commission clearly has the authority to separate advanced network services from regular network services in applying the requirements of Section 251(c), we recognized the practical necessity of supporting a requirement that ILECs form independent subsidiaries for competitively investing in high capacity bandwidth services, conditioned further by requirements that would prevent them from buttressing their dominant role in local exchange markets.

On the pro-active side of nurturing aggregated demand in marginalized communities, APT recognized that simply removing barriers to infrastructure investments could not overcome serious market shortcomings in addressing the needs of low-income people and small businesses in marginalized communities. We advanced three collateral policy suggestions to confront potential market failures head on:

• One was to urge the Commission to condition the approval of mergers and acquisitions with social compacts for the merged/acquired companies to pursue investment policies that are compatible with the infrastructural "ubiquity" objectives of Section 706.
• Another proactive recommendation, in the same "social compact" vein, was to give the ILEC's some relief from the imputed "productivity offset" in the setting of rates and access fees under price cap regulation, suggesting a federal-state coordinated approach. We urged that the relief be monitored for the targeting of the resulting saving of the companies to investments that bring high capacity bandwidth and advanced services to marginalized communities.
• A third, and most extensive recommendation, dealt with community-driven demand aggregation that would draw competitive infrastructure investments into the communities at risk of being given short shrift by traditional market forces. Specifically, reaching beyond all other Section 706 FCC filings, APT has called for establishing "a federal/ state policy framework to encourage, facilitate, and support community/provider partnerships and related market-oriented processes which are designed to (a) aggregate effective demand for community-based applications of advanced communications and information technologies and (b) build a strong 'demand-pull' base for advanced infrastructure investments to the home".

Because states are closest to communities where market forces are actually playing out, we urged the FCC to create a federal/state "joint board" to develop options and a resource base for implementing the recommendation along the lines suggested in APT's filing.

As we point out in our Section 706 filing, the reason for these pro-active policies is clear enough. Competitive providers in the converged communications industry lack sustainable marketing vehicles or processes for accessing the innovative capacity of community-based organizations, small business groups and residents of marginalized communities. There are no viable, on-going relationships with competitive providers for addressing the pent-up desire in these communities to become effective participants in the development and marketing of technology applications, which are specifically targeted to advance their economic and social status in life.

While recognizing that there are a number of tested options for market-oriented, community-driven demand aggregation that may be appropriate for policy implementation embracing devolution, APT has advanced a generic option built on a CBO/community-based model for participatory action research. The emphasis is on action--bringing community leaders (who function as the "interface" for community aspirations) into market-oriented relationships with competitive providers and product development/marketers in the converged communications industry. The strategy is to open up viable options for determining how community-driven applications development and deployment can generate effective demand among low-income populations, provide an expanded community base for demand aggregation and market-building, and bring marginalized communities more fully into the operation of the marketplace. (These proactive policy recommendations in our 706 filing may be accessed through APT's web site)

SUMMING UP

1. The FCC is to be commended for initiating a NPRM to break the regulatory logjam that has held back investments in high capacity bandwidth required to market the products and service of the digital age. The Commission is to be commended also for recognizing at last that the pro-active recommendations of APT to bring advanced communications and information services within reach of everyone, particularly marginalized communities, need to be at least addressed in the Commission's NOI.

2. Community-based support is urgent for APT's recommendations to correct the legally questionable and potentially perverse manner in which the Commission has arrived at the subsidiary requirement to be imposed on RBOCs for marketing competitive, high capacity services. Such support is particularly important to mitigate the tilt of the proposed competitive framework toward the high end of the market rather than in the direction of the low-end tilt of the infrastructure "ubiquity" commitment in Section 706.

3. Specifically, APT policy support should demand that mitigating the downside impact of the Commission's approach to creating a competitive environment for deploying high capacity infrastructure be coupled with the pro-active recommendations of APT to breathe life in the policy commitment of Section 706--the ubiquity commitment to "deploy advanced telecommunications capability to all Americans."

4. It is important also that the Commission be pressed to recognize that the need for "coupling," as in (3) above, be specifically addressed in the NPRM and that the substance of APT's pro-active recommendations be refined in the Commission's NOI.

5. Aggressive encouragement and support is necessary for Chairman Kennard's commitment to take the Commission to urban and rural areas across the nation to determine how the mandate of Section 706 is being carried out by competitive providers and, in the process, find out from community-based organization what the digital divide is all about.

Members and other community-based supporters of the central thrust of APT policies will be invited to sign on to the response filings currently under preparation. Suggestions for separate response filings in keeping with this alert will also be forthcoming.