FCC Special Access Proposal Draws Rebuke from CenturyLink, Praise From Sprint, Level 3

Josh LongThe Federal Communications Commission on Thursday proposed a new framework to regulate the $40 billion-per-year market for business data services, otherwise known as special access.

FCC commissioners also voted to resolve a probe of special-access tariffs filed by four large incumbent local exchange carriers, including AT&T and CenturyLink. Finding certain terms and conditions were unjust and unreasonable, the FCC ordered the companies to withdraw the terms and file new tariffs.

Users of business data services include such varied interests as banks and retailers connecting ATMs; government and corporate offices linking branch offices and data centers; and mobile-phone providers offloading traffic from wireless networks, the FCC explained in a news release announcing its further notice of proposed rulemaking.

The agency’s actions, which include a proposal to apply a “technology-neutral framework” to the regulation of business data services, drew condemnation from the cable industry and large incumbent phone carriers. {ad}

“Cable’s entry into the market for business data services over the last few years has resulted in improved services and lower prices for businesses all across America,” the National Cable & Telecommunications Association (NCTA), said. “It is disappointing that [FCC Chairman Tom Wheeler] is responding to this unquestionably positive development by asking the Commission to consider imposing onerous new rate regulation on these competitive services.”

Some critics said the FCC is signaling plans to reverse a two-decade-old policy of deregulation in the special access market. Ahead of Thursday’s vote, AT&T insisted the market for business data services is competitive and expressed concerns that a proposed policy of “monopoly-era rate regulation” would discourage investment in the construction of fiber networks.

“The FCC’s data shows that its 20-year old deregulatory policy for business data services has been very successful, fostering competitive entry by cable companies and others, network investment, technological advances and much lower prices for capacity,” CenturyLink, FairPoint Communications and Frontier Communications said Thursday in a joint statement. “Those hoping to be connected to the digital economy will be best served if the FCC continues this success story, but we are concerned today’s rule-making proposal will turn back the clock and shut the door on …


… business data investment and competition in much of suburban and rural America.”

Frontier and Verizon also are subject to the FCC’s special access tariff order.

Others in the telecommunications industry responded positively to Thursday’s developments. Describing the special access market as “long broken,” Sprint said the FCC’s action lays the foundation “for real reform.”

“Importantly, the FCC formally recognized what competitive carriers have long experienced, that large incumbents exercise overwhelming market power and impose unreasonable rates, terms and conditions over a critical part of our nation’s networks,” Sprint said.

Level 3 Communications concurred.

“Thanks to the leadership of Chairman Wheeler and his colleagues, we believe some relief may finally be in store for customers in the business data services market,” said Level 3. “The proposed rulemaking also adopted today sets the stage for the necessary next steps to more generally fix this broken market. Getting these reforms right will be critical to enhancing wireless broadband deployment, spurring competition, investment and innovation, and reducing costs in health care, education and nearly every sector of the economy.”

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