Special Access Data Collection Could Finally Settle Long Dispute
The special access data gathering effort that the FCC last week (CD Aug 19 p2) said it would begin soon should produce a lot of data that may help resolve disputes, said industry lawyers in interviews this week, but they said commission staff have a lot of work ahead. It’s a “really extraordinary” amount of data about the prices and connections for every building across the nation, said Thomas Jones, a Willkie Farr attorney who has represented competitive carriers in urging some form of rate regulation for the service.
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An FCC spokesman had no timeline Tuesday for when collection will begin, following a Federal Register notice saying the Office of Management and Budget approved the data gathering. Jones predicted the commission could be in a position to take up reregulation of special access at the end of next year. First, agency staffers are going to have to deal with coming up with confidentiality and protective orders, for what will be “a huge effort,” said Jonathan Banks, USTelecom senior vice president-law and policy.
Whether the data will provide conclusive evidence is unknown, said former Commissioner Robert McDowell, who had pushed for the data collection ordered in 2012 (CD Dec 19/12 p1). “It will be difficult to reregulate special access unless the data shows less competition than there was in the late 1990s when it was deregulated,” McDowell said. It could lay to rest a controversy between those seeking regulation and providers like AT&T and Verizon, which have argued against it, he said.
The data are likely to show “significant portions of the market” in which special access providers have a dominant enough share of a market to charge high prices or impose demands on customers like buying “huge volumes or service to lock up demand and prevent competition,” said Jones. The effort will provide data market by market, McDowell said. Computer and Communications Industry Association Vice President-Government Relations Cathy Sloan, who also said she’s hopeful the data will make the case for regulation, said what types of remedies organizations will seek will depend on what the data show. Among the ideas that could be on the table will be a price cap or a freeze, plus regulations to prevent exclusionary practices, Jones said.
Others like Verizon continued to argue regulations aren’t needed. The special access marketplace “is highly competitive, with many providers -- cable companies and CLECs -- competing vigorously in it,” said a spokesman. He said the company supports efforts to gather all of the appropriate and necessary data to accomplish an accurate analysis of the competitive market. In June, representatives of AT&T, CenturyLink, USTelecom and Verizon met with the FCC general counsel’s staff, according to an ex parte filing (http://bit.ly/1onG6Yx), and said they expect the data collection to show “the marketplace for business services is only getting more and more competitive over time and that competitors are experiencing tremendous success in all segments of that market.” USTelecom’s Banks said he still believes the data collection will show more competition, particularly with the increased presence of cable companies.
The industry representatives at the FCC said “the extraordinary rise in demand for data-intensive wireless services has fueled enormous Ethernet growth,” which has “created significant opportunities for expansion and new entry.” An AT&T spokesman pointed to a 2012 company blog post that said “the Commission’s and the industry’s time and resources should instead be dedicated to developing policies that promote investment -- by all providers -- in infrastructure capable of delivering on today’s, and tomorrow’s, IP-based higher bandwidth needs of business customers."
"The other side has essentially said competition is right around the corner, but it never develops,” Jones said.
Some issues will remain unresolved even after the collection that could determine the conclusions, said industry officials. One is whether cable broadband “best efforts services” should be included in the analysis, Banks said. The FCC opted to include those services in the collection, leaving open the question of whether to include it in a later analysis. Banks said the data should be included to give a truer picture of the competition in the market. Others say it should not be included.
McDowell had dissented from portions of the 2012 ruling ordering the data collection that called for a Further NPRM on possible changes to the pricing flexibility rules after the data collection, saying it was premature without the data. Another question left to be decided after the data collection, McDowell said, is how to define markets. That could determine whether there is competition, McDowell said.