FCC Divided on Special Access Order
FCC commissioners disagree on how to handle a 2005 proposal to revise regulation of the Bells’ special access service. FCC Comr. McDowell is expected to be the tie breaker, taking a middle-of-the-road position, sources said Wed. Meanwhile, House Telecom Subcommittee Chmn. Markey (D- Mass.) asked commissioners in a Wed. letter if they support a review of special access rules.
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FCC Chmn. Martin has polled commissioners on whether they want to proceed with an order now or “refresh the record” by seeking new comments and taking into account recent developments -- including Bell mergers that were approved subject to special access conditions and a 2006 GAO report critical of the special access system. Michelle Carey, senior legal adviser to Martin, circulated an e-mail March 13 asking commissioners to weigh in.
FCC Comrs. Copps and Adelstein appear to want an order written now, but Martin and Comr. Tate favor “refreshing” the proceeding, sources said. McDowell probably will take a middle path, observers said. He’s expected to back Martin’s call for new comments but will emphasize that an order should be issued soon.
At issue is a longstanding dispute between the Bells and competitors over the fairness of special access rates and terms. The FCC in 2005 denied AT&T’s request to stop deregulating special access services but agreed to open a notice of proposed rulemaking (NPRM) to decide what regulatory framework to use in the future. Competitors had asked the agency to put limits on the Commission’s pricing flexibility program, which selectively deregulates Bell special access services as the companies show they have competition. The Bells have told the FCC that limits would be a step backward for a program that has brought lower prices and more service options. Wholesale carriers, big business customers, wireless and satellite carriers and even some rural carriers depend heavily on special access to Bells’ lines to make connections.
A competitive-industry source questioned whether the record needs refreshing since it was never closed. Doc. 05- 25 has been open all along, with the GAO report and other items added as they have emerged, he said. Even if an order is written, it probably won’t come out soon because it has not yet been written, another source said.
No one at the FCC wanted to talk publicly about the special access NPRM. But Copps and Adelstein have said they favor more action to reform special access. In a statement explaining why he concurred with the Dec. 2006 order approving the AT&T-BellSouth merger, Copps said it does limit the merged company’s ability “to use its stranglehold over business access services… to raise prices for special access.” But there’s more to do, he said: “It is time for the FCC to finish its long-dormant special access proceeding that has been languishing for years.”
Adelstein made a similar statement on the merger: “The Commission has a long-pending proceeding on special access services and… it will be even more critical that the Commission tackle these issues as comprehensively and expeditiously as possible. I will continue to push for action on this long-overdue proceeding.”
Markey’s letter expressed concern that the coming 700 MHz auction may not deliver expected broadband benefits “due to an apparent failure in the market for ’special access’ services.” Wireless carriers will depend more on special access as they deploy broadband networks, but special access service prices are rising, with “little competitive choice,” Markey said. The FCC can help by acting on the pending special access NPRM, he said. He asked the commissioners each to tell him by June 11 if they back completing a review of special access issues by Sept. 15.
Wireless carriers are split down the middle on whether the FCC should act on special access, depending on whether they're affiliated with a LEC, sources said. Sprint Nextel and T-Mobile, the 2 leading nonaffiliates, have made reform a priority. But LEC-affiliated wireless carriers, large and small, oppose action. “That’s not a surprise,” a wireless industry source said of the split shown in the informal poll: “Given the number of issues before the FCC to make any progress at all and have it be on the radar screen is a very positive development for the carriers who have been pushing it.”
“Special access is a critical issue to wireless competition and to the rapid deployment of broadband networks and the resulting competitiveness of broadband providers,” a Sprint spokesman said: “As such, and in light of the substantial amount of information that already is on the record, Sprint Nextel believes the Commission should move directly to an order.”