CLEC Consultant Cites ILEC BDS Market Power; FSF Hits 'Special Access' Advocacy
There's evidence ILECs exercise market power at data speeds above 45-50 Mbps in business data services, said Jonathan Baker, consultant to Level 3 and Windstream, in a declaration posted Friday in FCC docket 16-143 that was resubmitted with parts made…
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public that previously were redacted as highly confidential. "Prices of high-bandwidth connections are likely substantially in excess of competitive levels. (For example, the presence of four or more in-building and four or more in-block high-bandwidth rivals lowers the prices of high-bandwidth connections by 43% according to one estimate and by 25% according to another.) This evidence does not support the suggestion that all business data services markets at bandwidths above 50 Mbps are competitive," said Baker, who was asked to comment on the BDS study of FCC consultant Marc Rysman. Rysman's data analysis "is broadly consistent with mine," Baker said. Free State Foundation criticized the FCC course and said "it's no wonder the Commission opted to change the terminology" from "special access" to BDS. "This whole decades-long proceeding has been driven in large part by ‘special access.' That is, special access to the Commission's administrative processes by some favored parties engaging in special pleading to obtain special rent-seeking treatment," said FSF President Randolph May and Senior Fellow Seth Cooper in a Friday commentary. "Special rent-seeking privileges are sought primarily by a segment of BDS competitors who serve business enterprises, not everyday residential or retail consumers. New rate controls would give these special interest pleaders price cuts on wholesale access to their competitors' facilities, including advanced IP-based broadband networks. Prompted by the continued special interest pleading, the Commission is proposing rate controls based on problematic analyses that disregard existing competitive forces," they said. "It is true that special interest pleading is nothing new at the Commission, and we freely acknowledge that no company or market segment has a monopoly on it. But the long, tortured history of the ‘special access' proceeding, in the face of ever increasing facilities-based competition in most places, is stupefying. ... Awash in special interest pleading, problematic analyses, and questionable agency processes, the best course would be for the Commission to close the BDS proceeding."