On The 8th Floor: SBC Blasts Martin For Seeking Details Of Talk America Deal

Telecom Policy Report, May 5, 2004

At the same time SBC Communications is pressuring the FCC to step in and bar state regulators from compelling the Bell company to reveal details of its interconnection agreement with Sage Telecom, SBC also is trying to sidestep a confrontation with FCC Commissioner Kevin Martin.

SBC on Monday fired off a strongly worded letter to FCC Chairman Michael Powell, in which the company implied Martin tried to bully another competitive local exchange carrier (CLEC) -- Talk America -- into revealing details of ongoing interconnection negotiations between it and SBC.

Talk America on Monday (May 3) informed SBC that Commissioner Martin "ordered" the CLEC Talk America to turn over to him "all proposals exchanged between Talk America and the ILECs with respect to the provision of UNEs after the USTA II mandate is issued; all responses by either party to the proposals made by the other; and any relating documentation showing the willingness of either party to facilitate a transition from a UNE-P to a facilities based UNE-L."

According to SBC, Martin made the demand the morning of May 3, insisting that the materials be provided to him by 1 p.m. the same day. Talk America notified SBC of the demand at 12:50 p.m. (EST) the same day. SBC immediately objected to the production of the materials on the grounds (1) that Martin has no authority to make such a unilateral demand, and (2) that the production would violate a non-disclosure agreement (NDA) entered into by Talk America and SBC.

SBC contends that a unilateral order by a single FCC commissioner for materials "in a private commercial negotiation is not authorized" by federal statute or the Commission's rules. "A single Commissioner, acting alone, has no delegated authority to demand the production of materials," SBC told Powell. "Furthermore, the materials were produced by Talk America in violation of a valid non-disclosure agreement signed by both parties."

Under the terms of the NDA, covered materials may only be disclosed in response to a "valid order or request" of a "governmental body," and even then only after giving the objecting party an opportunity to seek a protective order.

"This Commission is a governmental body," SBC said. "Commissioner Martin is not, and his unilateral request to Talk America provides no basis for violating the terms of the nondisclosure agreement."

Sources within the Washington, D.C., legal community say SBC may be trying to have it both ways. "In one instance, SBC argues that only the FCC should be allowed to review SBC's [interconnection] agreements," one source told TPR. "Then SBC turns right around and tells the FCC it doesn't have any right to see such agreements. It's all very confusing."

James Bradford Ramsay, general counsel for the National Association of Regulatory Utility Commissioners, echoed that view.

"SBC first argues, informally, for the last few weeks ... that the FCC should require these agreements to only be filed at the FCC," Ramsay said. "Now they're arguing that even the FCC shouldn't see the documents. Of course, I've not seen them, but I believe the reason why" SBC doesn't want to disclose them "will become clear once the content of the agreements become known."

Meanwhile, the CompTel/ASCENT Alliance, a trade organization representing CLECs, on Tuesday (May 4) rushed to Martin's defense.

"CompTel/ASCENT and its members read with considerable dismay the filings that SBC made with the Commission ... on matters relating to the 'commercial' negotiations for access to UNEs [unbundled network elements] undertaken at the Commission's request in the wake of the D.C. Circuit's decision in USTA II," association President H. Russell Frisby asserted in a letter to Powell.

Specifically, CompTel/ASCENT is concerned about (1) SBC's letter attacking Martin "simply for requesting information concerning its negotiations with Talk America" and (2) SBC's "emergency petition" for a declaratory ruling and a "stand-still order." (See related story top of page 1).

CompTel/ASCENT-- and most everyone else -- is questioning why SBC is concerned that the terms and conditions it is offering to competitive carriers as a "replacement for UNE-P" should remain shrouded in secrecy. "As you know, CLECs currently serve approximately 19 million customers across the United States," Frisby told Powell. "CLECs use UNE-P as the vehicle for delivering service to many of these customers and will continue to be dependent on the incumbent local exchange carriers, including SBC, for network access unless and until they can transition their customers onto alternative facilities ..."

Any proposals that might conflict with such a transition or that would destroy competition are "both contrary to law and to the Commission's announced policies," Frisby insisted. "This is not classified information, and the Commission should question, at the very least, why SBC is trying to hide its proposed 'replacement for UNE-P' from public scrutiny."

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