Competify Hopeful Industry Data Will Prod FCC To Rein in Special Access Prices

Incompas CEO Chip Pickering called special access a “critical input” for both fixed business services and general mobile broadband services, which need backhaul. He believes the "market conditions" will show barriers remain and the large telcos continue to charge “monopoly rents” that hinder business market competition, deployment, innovation and the broader economy.

The FCC finally will be in a position to act on special access after analyzing and receiving input on the comprehensive industry data collection, said Charles McKee, Sprint vice president-government affairs. While he and others said they couldn’t say much about the data due to confidentiality protections, he said he was “very encouraged” by the proceeding. He said it would allow the commission to reach “data-based conclusions” rather than rely on ILEC “rhetoric” and competitive predictions. “You’re now going to see the real evidence coming out into the record and being discussed in detail. We look forward to that and think the outcome is going to be positive for competition,” he said.

Level 3 has links to many business customers, but still needs special access to reach all the locations of big companies and institutions with offices scattered throughout the country, said Joe Cavender, vice president-federal affairs. Without “reasonably priced” access to ILEC special access services, Level 3 can't bid for those contracts, he said.

The Bells have been saying “move along, move along, nothing to see here” for years, said Colleen Boothby, counsel for the Ad Hoc Telecommunications Users Committee representing enterprise customers. But competitors and business customers believe their special access rates are overpriced and are hopeful the industry data will support that view. To the extent the data expose the “misleading” incumbent arguments, “we expect the FCC to give no credibility to ILEC arguments," she said. Special access is a “broken market” that needs to be fixed, she said.

The ILECs have concerns about “stale” industry information from 2013, but believe the special access market is increasingly competitive. “Even the FCC’s three-year-old data show will there are multiple business broadband providers and facilities present throughout the country. Competition has only grown since 2013,” said Jon Banks, USTelecom senior vice president-law and policy.

AT&T believes critics are wrongly focused on regulating old circuits that would only discourage new fiber deployment. “When the FCC began its tortured trek over this 1.5 Mbps Bridge to Nowhere, we predicted that this backwards looking regulatory effort would waste an enormous amount of industry and agency time on a meaningless and futile exercise over services that would be obsolete by the time we crossed the bridge,” said Bob Quinn, senior vice president-federal regulatory, in a blog post Wednesday. “Guess what? While we are still -- 3 ½ years later -- just beginning our trek across that bridge, our predictions have quite predictably already come to pass.”

Competify members said the ILECs were to blame for dragging out the special access proceeding over the past decade. Boothby said the ILECs are always saying market data are out of date and can’t be trusted, but she believes the FCC has learned “to take those claims with a huge grain of salt.” McKee said the incumbents are always making the same arguments about new competition emerging, but “in fact, those alternatives have not panned out.”

The coalition members urged the FCC to reregulate business broadband services that had received relief under the agency’s enterprise forbearance and special access pricing flexibility decisions. They also want the commission to prevent Bell volume and term terms and conditions that “lock up” competition, including by adopting “fresh look” provisions that allow special-access wholesale and retail customers to take advantage of new alternatives.