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 STATEMENT  OF  COMMISSIONER  KATHLEEN  Q.  ABERNATHY 
 Re:  Petition  for  Forbearance  of  the  Verizon  Telephone  Companies  Pursuant  to  47  U.  S.  C.  §  160(  c),  SBC  Communications  Inc.  ’s  Petition  for  Forbearance  Under 
 47  U.  S.  C.  §  160(  c),  Qwest  Communications  International  Inc.  Petition  for  Forbearance  Under  47  U.  S.  C.  §  160(  c),  BellSouth  Telecommunications,  Inc. 
 Petition  for  Forbearance  Under  47  U.  S.  C.  §  160(  c),  WC  Docket  Nos.  01-  338,  03-  235,  03-  260,  04-  48  (adopted  Oct.  22,  2004). 


 In  the  Triennial  Review  Order  and  subsequent  reconsideration  orders,  the  Commission  took  the  bold  step  of  fencing  off  next-  generation  broadband  facilities  from 
 unbundling  obligations.  This  forbearance  decision  is  an  important  component  of  that  deregulatory  policy,  and  it  will  help  deliver  the  promise  of  broadband  networks  and  IP-enabled 
 services  to  Americans  throughout  all  parts  of  the  country. 
 The  Commission  declined  to  subject  broadband  facilities  to  unbundling  obligations  under  section  251  to  encourage  greater  investment  in  deep-  fiber  networks  – 
 investment  that  is  massive  in  scope  and  carries  no  assurance  of  profit.  While  curtailing  unbundling  requirements  undeniably  creates  challenges  for  wireline  competitors,  the 
 Commission  was  rightly  concerned  that  new  broadband  investment  would  be  severely  chilled  if  incumbents  were  required  to  share  the  fruits  of  their  labors  on  terms  and 
 conditions  set  by  regulators.  Moreover,  in  a  broadband  marketplace  where  cable  operators  enjoy  a  significant  lead  over  wireline  incumbents,  it  is  difficult  to  justify 
 saddling  the  less-  dominant  platform  –  but  not  the  market  leader  –  with  unbundling  obligations. 


 Forbearance  from  unbundling  obligations  imposed  under  section  271  is  necessary  to  ensure  that  the  Commission’s  broadband  relief  has  its  intended  effect.  The 
 Commission  has  determined  that  the  costs  of  unbundling  outweigh  its  benefits  in  the  broadband  context,  and  that  determination  warrants  relief  from  unbundling  irrespective  of 
 which  statutory  provision  it  arises  under.  While  access  obligations  under  section  271  have  been  argued  to  be  less  burdensome  than  those  imposed  under  section  251  (because 
 the  TELRIC  standard  is  inapplicable  under  section  271),  unbundling  in  all  events  “spread[  s]  the  disincentive  to  invest  in  innovation  and  create[  s]  complex  issues  of 
 managing  shared  facilities.”  United  States  Telecom  Ass’n  v.  FCC,  290  F.  3d  415,  427  (D.  C.  Cir.  2002). 


 Notably,  the  Commission  retains  regulatory  authority  to  ensure  that  consumers  will  be  protected  if  robust  broadband  competition  fails  to  live  up  to  its  potential.  I  do  not 
 expect  such  an  outcome,  but  the  Commission  stands  ready  to  act  if  a  market  failure  occurs.  In  addition,  this  grant  of  forbearance  is  without  prejudice  to  our  ongoing 
 proceeding  regarding  the  Computer  Inquiry  nondiscrimination  provisions,  so  the  Commission  will  have  a  full  opportunity  to  determine  the  extent  to  which  those  separate 
 requirements  remain  necessary. 
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