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FCC Expected to Suspend Special Access Deregulation

The Federal Communications Commission appears ready to suspend further deregulation of special-access offerings as the agency sets a path for reform, an analyst said Wednesday.

Christopher King of Stifel Nicolaus & Company, Inc. believes the planned suspension will have a negligible impact on the telecommunications market.

“Our understanding is there are no further telco petitions pending or in the works, after AT&T and Windstream recently gained deregulation in certain markets,” King wrote.

Earlier this year, AT&T and Windstream received pricing flexibility that allows them to raise their prices on high-speed circuits that serve a variety of functions, such as connecting cellular towers, carrying data to the Internet and serving high-volume business customers. Competitive local exchange carriers that serve business customers often lease these circuits from the likes of AT&T.

The Democrat-led FCC is preparing to reform its special access rules, though November’s presidential election creates uncertainty over the agency’s direction.

Incumbent carriers such as AT&T and Verizon oppose further regulation, contending the market is competitive. Competitive carriers favor more regulation and argue the incumbents wield too much power in the special access market.

“We believe a Republican victory would be helpful to the Bells deregulatory agenda, while a Democratic victory would be more favorable to their rivals/critics,” King wrote. “Even in the latter scenario, we think FCC action would more likely be measured than radical, given pushback from the Bells and their allies in Congress, backed up by a possible court challenge.”

As part of its reform, the FCC is expected to issue a mandatory data request so it can have better visibility into the market. The industry has been providing data on a voluntary basis under a special access proceeding that has been languishing at the agency for years.

An FCC spokesman did not immediately respond Wednesday to a request for comment.


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