The American Cable Association is urging the Federal Communications Commission to promote choice, efficiency and competition in telecommunications services by adopting regulations that would eliminate obstructions to mergers between cable operators and competitive local exchange carriers (CLECs) in markets ttaditionally dominated by large incumbent carriers.

"Alliances between cable companies and CLECs can promote greater facilities-based competition with the big telcos and other providers, encouraging lower rates, higher quality, and more innovative service offerings," ACA President and CEO Matthew M. Polka said. "The likelihood of any antitrust concerns with such arrangements is remote because cable companies and CLECs serve different customer segments, and cable companies and CLECs are non-dominant providers of local telecommunications services."

ACA's views were expressed in reply comments filed Sept. 21 with the FCC in connection with proposals by the National Cable & Telecommunications Association asking the FCC to conclude that cable-CLEC combinations should not be captured by cross-ownership prohibitions found in Section 652 of federal communications law. ACA noted that initial comments filed in August by various parties overwhelmingly supported ACA's position that adoption of NCTA's proposals would serve the public interest.

In its comments, ACA stressed that Section 652's prohibitions should apply to cable-incumbent phone carrier combinations within the same local market but not to cable-CLEC combinations because such mergers will undoubtedly stimulate competition, investment and economic growth in the telecommunications services sector.

ACA noted that companies that have recently attempted to complete cable-CLEC mergers, which currently require Section 652 waivers from the FCC, have been hit with unexpected costs and other burdens that would go away if the FCC declared that cable-CLEC mergers are not covered by Section 652's restrictions.

"Limiting Section 652's reach to transactions involving incumbent LECs and cable companies will eliminate uncertainty and will encourage cable company-CLEC transactions, to the ultimate benefit of American consumers and businesses," Polka said.

Regarding the FCC's authority to act, ACA explained that Section 652 is ambiguous in several respects, allowing the FCC to use its broad discretion to issue a declaratory ruling and eliminate uncertainty. ACA also explained that cable-CLEC mergers that would no longer require waivers would still be subject to the FCC's approval processes for transfers of control and assignment of assets, as well as the approval processes of other federal and state agencies.