The FCC granted AT&T’s complaint against BellSouth, saying the Be...

BellSouth tried to prevent facilities-based competition by requiring wholesale special access customers to commit at least 90% of their traffic to the carrier’s network. Specifically, it said BellSouth’s optional tariff discount plans for special access services -- TSP and PSIP -- violated Secs. 201(b), 202(a) and 272 of the Communications Act because they “lack cost justification, impede the development of facilities-based competition in the BellSouth region and discriminate in favor of BellSouth’s interexchange affiliate,” according to the FCC order. The FCC agreed with AT&T that BellSouth’s TSP discriminated in favor of that company’s long distance affiliate, in violation of Sec. 272. But it said “in light of this finding, and because the remedy we apply under section 272 grants to AT&T all the relief it would be due under sections 201(a) and 202(b), we dismiss without prejudice AT&T’s claims alleging that the TSP violates sections 201(b) and 202(a).” The Commission also denied AT&T’s claims against the PSIP. “Although the PSIP is somewhat similar to the TSP, it differs in some determinate respect,” the FCC said, because: (1) “The PSIP has and always will have Confidential Information identifying the number of PSIP customers.” (2) “The PSIP contains no evergreen provision, and thus does not have the ‘perpetual’ characteristics of the TSP.” (3) “BellSouth Long Distance does not and cannot subscribe to the PSIP.” “Given these circumstances, we conclude that the PSIP does not unlawfully discriminate in favor of BellSouth Long Distance under section 272, and does not have an unjust or unreasonable effect on the special access market under sections 201(b) and 202(a),” the FCC said. BellSouth dropped both plans in June, before AT&T filed its complaint July 1. But it allowed the customers on the plans to keep them. The FCC ruled last week BellSouth should remove from the grandfathered TSP tariff the provision that allows its customers to renew their subscriptions and terminate it by June 9, 2005. BellSouth Asst. Gen. Counsel & Vp-Regulatory James Harralson said it was “unfortunate that the FCC made this determination in the face of a very competitive marketplace for special access services.” He said BellSouth believed that TSP was “not discriminatory in favor of BellSouth Long Distance, nor anticompetitive.” He said that tariff had been in place since 1999 and many of BellSouth’s wholesale customers, including AT&T, have subscribed to it and “received hundreds of millions of dollars of discounts over the nearly 6 years of its existence.” Those discounts helped those companies to become “more competitive and demonstrated BellSouth’s commitment to competition,” he said. Harralson said BellSouth would “closely review the Commission’s decision and evaluate all of its legal alternatives.” AT&T applauded the Commission for “taking this step to curb BellSouth’s anticompetitive wholesale policies.” AT&T Vp-Law & Dir.-Federal Govt. Affairs Len Cali said the order confirmed that “BellSouth’s special access tariff is unlawful and anticompetitive.” He said the Bell tried to force its wholesale customers to keep nearly all their special access traffic on the BS network to receive “'volume discounts’ from its obscenely high rack rates. This lock- in requirement would prevent the very facilities-based competition that the Bells have long claimed is the only meaningful competition.” Cali also said the Bells’ special access rates were imposing “enormous costs in the information economy.” He urged the FCC to “promptly begin the long-delayed proceeding to review special access rates generally and the state of competition in the wholesale telecom market.”