LANSING While there are a lot of “what ifs” to get through before any review would happen, Public Service Commissioner Robert Nelson said the commission may reconsider its approval of SBC’s application to enter the long distance market.

Nelson said the commission’s initial approval of SBC’s application, which was approved by the Federal Communications Commission last year, was based on the level of competition in the state, a level he and others argued could be jeopardized by a court ruling expected to go into effect June 15.

With the U.S. Department of Justice and the FCC this week deciding against appealing the ruling, which overturned FCC rules allowing states to determine conditions of competition, efforts by state regulators to take the case to the U.S. Supreme Court are not seen as having much chance of success.

Nelson said the ruling changes the landscape on which the PSC based its support of SBC’s long distance application. “It undermines our recommendation,” he said. “We recommended that they get long distance approval based on the fact that there was significant competition, especially through (unbundled network element platform). Now that the FCC is pulling the plug on UNE-P, we may need to reevaluate.”

Under UNE-P, competitors can lease parts of SBC’s existing network at a rate based on the cost of maintaining the service offered to their customers. SBC and other incumbent providers have argued those rates, set by the PSC, are actually less than the cost of maintaining the service.

Under the ruling by the U.S. Court of Appeals for the District of Columbia, the FCC, not the state commissions, must decide that UNE-P is needed in a particular market to ensure competition. Because the FCC has made no such findings, the authority to require incumbents to offer UNE-P expires when the ruling becomes effective next week unless the U.S. Supreme Court agrees to hear the case.

SBC has agreed to continue UNE-P rates and access for existing competitors at least through the end of the year while it negotiates with those competitors over new rates.

Analysts have argued that the new rates SBC will be seeking through its negotiations (UNE-P is currently about $14 per line per month and the company has asked to increase that to $25) will likely be high enough that many competitors will shut down. Any such loss of competition would potentially spur the PSC’s re-evaluation of SBC’s long distance authority, Nelson said.

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