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CenturyLink: Verizon Engaging In ‘Double Talk’ on Special Access Competition

Regulation

CenturyLink says Verizon is engaging in “double talk” while proposing expanded price caps on the business data services (BDS) or “special access” market.

In a letter this week to the Federal Communications Commission, CenturyLink said Verizon made the proposal because of a “supposed lack of competition in this market.”

Last month, Verizon and Incompas submitted a proposal that includes price reductions and a competitive market test for the FCC to consider as it analyzes the BDS market. CenturyLink is asking the FCC to reject the Verizon/Incompas proposal.

CenturyLink points out a whitepaper submitted by Verizon in a separate FCC case regarding Verizon’s pending $1.8 billion purchase of XO Communications’ fiber-optic network business. In the whitepaper, Verizon stated that after the acquisition is completed, “there will continue to be extensive competition for [BDS] provided over fiber, cable, and copper by a wide range of providers.”

“Verizon is disingenuous in playing both sides of an issue to its advantage in two different FCC matters,” said John Jones, ‎CenturyLink’s senior vice president of public policy and government relations. “Verizon can’t have it both ways — arguing that the level of competition is robust when it suits its purposes, then making the exact opposite argument to seek out a government-mandated discount on the rates it pays.”

Kathy Grillo, Verizon’s senior vice president and deputy general counsel, public policy and government affairs, said CenturyLink’s “characterization of the Verizon/Incompas joint proposal is wrong.”

“Our joint proposal is not a commentary on the current state of competition,” she said. “It is a compromise intended to resolve an issue that has been overhanging the industry for years. We have always maintained that regulation is only necessary where competition does not discipline the market. Of course, many markets are already competitive. In markets that are not sufficiently competitive, Verizon and Incompas have offered a framework to address them. Instead of trying to poke holes in the only meaningful compromise on the table, we encourage all stakeholders to work together to find a reasonable path forward.”

In its letter, CenturyLink said Verizon and Incompas “paint a grim picture of competition to justify their draconian regulatory proposal, even while Verizon’s white paper highlights the intense competition” of the BDS market. CenturyLink told the FCC that Verizon’s white paper “undermines any claim that the Verizon-Incompas proposal is an appropriate basis for regulatory action.”

This spring, the FCC proposed a new “technology-neutral framework” to regulate the market for BDS. Under its proposed framework, the FCC would classify a market as either competitive, in which service providers would be subject to little oversight, or noncompetitive. In a noncompetitive market, providers would be subject to “one set of tailored rules” that would include “the use of price regulation and the prohibition of certain tying arrangement that harm competition,” according to the FCC’s May 2 further notice of proposed rulemaking (FNPRM).


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