AT&T Now Can Ratchet Up Special Access Prices

AT&T Inc. isnt saying when or by how much it will raise its special-access prices and its unclear whether the FCC will come to CLECs rescue any time soon.

Changes to AT&Ts middle mile-network billing look imminent, though, with the FCC-imposed injunction on price increases ending on Wednesday. The shift stems from AT&Ts BellSouth takeover in late 2006. To get regulators approval for the deal, AT&T had to agree to cut special-access rates to competitors for five years. In March 2007, however, AT&T got a break the Kevin Martin-led FCC reduced the five-year timeline by nine months. And, by that time, AT&T had made clear to the industry it would raise middle-mile network usage prices as soon as it got the chance. As of July 1, AT&T can do just that, and companies including Sprint Nextel Corp., Covad Communications Group, T-Mobile USA and Clearwire Corp. are scared.

The carriers all are part of a group called the NoChokePoints coalition, and theyre asking the FCC to cap the amount AT&T and Verizon Communications Inc. the two operators with the most middle-mile access in the nation can charge for special access. If the FCC doesnt act, those CLECs fear their special access bills will go up between 7 and 8 percent. That will add up to tens of millions of dollars per year, a Sprint Nextel exec said during a NoChokePoints conference call on Tuesday. In turn, providers will be forced to pass on cost increases to subscribers, including business customers, the companies said.

When, or if, the FCC will make a move, though, remains unknown. The agency is wrapped up in Net neutrality and Universal Service Fund reform proceedings. The National Broadband Plan, submitted to Congress in March, contains special-access overhaul recommendations; federal lawmakers have held some hearings on the proposed changes yet probably wont make much progress on the matter before going on vacation next week and in August. 

AT&T’s only response to a request for comment was to point PHONE+, VON/xchange and Billing World to a June 29 blog. In it, Frank Simone, assistant vice president of federal regulatory, said AT&T’s special access charges will “revert to our original tarriffed rates.” Simone then resurrected the RBOCs’ long-held argument that competitors should get their own fiber instead of relying on larger carriers’ DS1s.

“Are we really having a policy conversation about a DS1 connection that provides 1.5mbps connectivity for businesses in 2010?” Simone wrote. “Why arent the companies that are complaining about our special access prices instead focused on getting their own fiber into buildings they want to serve? Instead of talking about DS1s they could be investing in far more capable technology.”


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