Dispute Resolution: Unlocking The Power Of Generic Proceedings

Competitive Local Exchange Carriers (CLECs) often get into disputes with incumbent carriers – that seems to be the nature of the business as CLECs rely on incumbent resources in order to compete.

The "generic proceeding" is one method of conflict resolution that offers great potential to competitive carriers.  These proceedings derive their name from the fact that they are held outside of an individual dispute and often focus on one particularly contentious issue.  The determinations made by individual state commissions in these proceedings are then applied to disputes regarding that issue that may arise in the future. 

In order to unlock the potential of generic proceedings, competitive carriers first must be aware of what can be gained from them, and the advantages they hold over standard dispute resolution processes.  This column discusses why these proceedings are  potentially cost effective and beneficial.  It also discusses the status of generic proceedings in a number of states.

Dispute Resolution Under the Telecommunications Act of 1996
The Telecommunications Act of 1996 requires incumbent local exchange carriers (ILECs) to permit competitive carriers to interconnect with their existing networks. The Act provides mechanisms for state public utility commissions to resolve disputes that arise during the negotiation of interconnection agreements under the Act.  Not surprisingly, disputes between ILECs and competitive carriers have been pervasive in all regions of the country since the passage of the Act.  One dispute resolution mechanism provided under the Act is arbitration, which is available to a competitive carrier between 135 and 160 days after it formally requests negotiation of an interconnection agreement with an ILEC. 

While arbitration can  provide favorable results, it is a time-consuming and expensive process.  The ILECs, equipped with deep pockets, are more than willing to engage in this cumbersome and lengthy process.  Generic proceedings offer competitive carriers an attractive alternative to this sometimes problematic process and present the opportunity to be proactive, rather than reactive, in dispute resolution.

Generic Proceedings and the Advantages They Offer
Several state commissions have recently commenced generic proceedings in an effort to avoid multiple arbitrations concerning the same issues between numerous parties.  What makes these proceedings so efficient is the fact that a broad array of issues can be consolidated into one proceeding and multiple parties, often with similar interests, are able to participate.   

Further, generic proceedings are an effective tool since they often anticipate problems/disputes before they occur and provide resolutions to common areas of disagreement.  This is especially important since many of the first generation of interconnection agreements, negotiated subsequent to the Act, are nearing expiration or already have expired (see  previous article  on interconnection agreements). CLECs negotiating these second-generation agreements will invariably encounter disputes with the ILECs over basic issues.

Some generic proceedings have been the result of competitive carriers requesting proceedings to address contentious issues that commonly occur in relations between ILECs and CLECs.  State commissions have embraced the concept of these proceedings since, in addition to the value offered to their participants, they also save valuable state resources.  The success of these proceedings  has resulted from the cooperation of parties with common interests. 

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