Earthlink 2010 Annual Report Download - page 16

Table of Contents
The regulatory environment relating to our Business Services segment continues to evolve. Bills
intended to amend the Communications
Act of 1934, as amended by the Telecommunications Act of 1996 ("Communications Act") are introduced in Congress from time to time and
their effect on us and the communications industry cannot always be predicted. Proposed legislation, if enacted, could have a significant effect
on our business, particularly if the legislation impairs our ability to interconnect with incumbent carrier networks, lease portions of other carriers'
networks or resell their services at reasonable prices, or lease elements of networks of the ILECs under acceptable rates, terms and conditions.
We cannot predict the outcome of any ongoing legislative initiatives or administrative or judicial proceedings or their potential impact upon the
communications and information technology industries generally or upon us specifically. We are also subject to a variety of local regulations in
each of the geographic markets in which we operate.
Federal Regulation
Several of our operating subsidiaries are classified as non-
dominant carriers by the FCC and, as a result, the prices, terms and conditions of
our interstate and international services are subject to relatively limited FCC regulation. Like all common carriers, we are subject to the general
requirement that our charges, practices and classifications for communications services must be "just and reasonable," and that we refrain from
engaging in any "unjust or unreasonable discrimination" with respect to our charges, practices or classifications. The FCC must grant its
approval before any change in control of any carrier providing interstate or international services, or of any entity controlling such a carrier, and
before the assignment of any authorizations held by such a carrier. We have the operating authority required by the FCC to conduct our long
distance business as it is currently conducted. As a non-
dominant carrier, we may install and operate additional facilities for the transmission of
domestic interstate communications without prior FCC authorization, except to the extent that radio licenses are required. The following
discussion summarizes some specific areas of federal regulation that directly or indirectly affect our business.
Local Competition.
The Communications Act preempts state and local laws to the extent that they prevent competition in the
provisioning of any telecommunications service. The Communications Act imposes a variety of duties on local carriers, including competitive
carriers such as us, to promote competition in the provisioning of local telephone services. These duties include requirements for local carriers
to:
•
interconnect with other telecommunications carriers;
•
establish compensation arrangements for the completion of telecommunications service calls originated by customers of other
carriers on a reciprocal basis;
•
permit the resale of their services;
•
permit users to retain their telephone numbers when changing carriers; and
• provide competing carriers access to poles, ducts, conduits and rights-of-way at regulated prices.
Incumbent carriers are subject to additional duties. These duties include obligations of incumbent carriers to:
•
offer interconnection at any feasible point in their networks on a non
-
discriminatory basis;
•
offer colocation of competitors' equipment at their premises on a non
-
discriminatory basis;
•
make available some of their network facilities, features and capabilities, referred to as Unbundled Network Elements, or UNEs,
on non-discriminatory, cost-based terms; and
•
offer wholesale versions of their retail services for resale at discounted rates.
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