Sprint, CLECs Ask FCC To Curb ILEC Special Access Contract Practices
Bell rivals urged the FCC to rein in ILEC special-access practices that they say force them into long-term contracts on “anti-competitive” terms. Sprint said ILECs use their business market power to present competitors with the choice of paying “unaffordable month-to-month rates” for wholesale access or agreeing to “so-called ‘discount’ plans that offer reduced, but still grossly inflated, rates” and only if they accept “competition-killing terms and conditions.” Sprint called on the commission “to move rapidly to address anticompetitive special access terms and conditions.” Level 3, Windstream and XO Communications made similar filings on Thursday in docket 05-25.
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However, Verizon hailed the market for special access and high-capacity broadband services, including ethernet, which it said had grown even more competitive in the nine years since the commission first pulled back on regulating such services. “And that trend has accelerated since 2013 -- the only year for which the Commission collected data in its mandatory data collection,” Verizon said. “Faced with those facts, the Commission should reject recent calls to roll back forbearance and regulate these services.” Verizon attached a lengthy appendix that provided an overview of 40 competitors in the business market, including cable companies, CLECs, fixed-wireless providers and others.
Sprint said “addressing unjust special access rates should remain the FCC’s main goal -- but anticompetitive terms and conditions also constrain the growth of broadband competition,” as the ILECs leverage their dominance in special-access services providing wireless backhaul and business connections. “The exorbitant rates drive up the cost of a critical input to broadband services, and the terms and conditions limit entry by potential special access competitors,” Sprint said.
Windstream asked the FCC to act soon on TDM special access volume commitments. “Contrary to large ILECs’ efforts to portray TDM services as merely historical offerings, Windstream explained that many business service customer locations continue to rely on TDM special access services for network connectivity,” the company said. “While proclaiming the desire to shift their own retail customers to IP-based services, these large ILECs impose hefty volume commitments that lock competitive carriers and other wholesale purchasers into continuing to purchase TDM-based customer connections, or force those wholesale purchasers to pay large penalties for services they neither want nor need. These lock-up provisions both slow the wholesale purchasers’ IP transitions and raise their costs -- which then allow the large ILECs to ward off competition and raise their own retail prices.”
Level 3 called on the FCC to address the “harmful effects” of ILEC demands for “lock-up plans” for DSn-based special access services. “Marketplace evidence demonstrates that these lock-up plans stifle competition, slow the deployment of fiber to business locations, and inhibit the transition from DSn-based services to more-efficient Ethernet services,” Level 3 said. XO reiterated its concerns and offered additional information on “the long-term volume special access commitment plans" of several price cap LECs, such as Verizon and AT&T. The plans “effectively lock up virtually all of XO’s and other competitive carriers’ demand for special access services,” deterring them “from building their own facilities” or seeking alternatives from others, XO said.