Industry stakeholders are lining up in support of or opposition to changes to special access price methodology proposed this week by FCC Chairman Julius Genachowski. Currently large incumbent carriers have considerable flexibility in how they price special access circuits, which are used by competitive carriers, wireless network operators, and enterprise customers as well as smaller incumbent carriers. But according to news reports, the commission is considering new limitations on what the carriers can charge – or at least restricting the extent of carriers’ pricing flexibility.
Competitive carriers have been particularly vocal in their opposition to today’s system and at least two competitive carrier organizations this week voiced partial support for Genachowski’s actions.
“Pricing flexibility triggers have resulted in unreasonable rates and unjustifiable rate increases,” said The Broadband Coalition, a competitive coalition whose agenda includes special access reform, in a statement. “We applaud the FCC for taking this step and hope it leads to broader reforms in this area.”
Comptel issued a similar statement. “We hope the FCC is signaling that it will be putting in place the correct pro-competitive policies for a 21st century broadband market, which support investment in new networks and innovation on existing infrastructure, while discouraging significant overcharging by dominate players in a multi-billion dollar service market,” said Comptel.
But opponents of special access reform, including AT&T Vice President of Federal Regulatory Bob Quinn, argued just the opposite. “Instead of creating a path to . . . significant infrastructure investment by all carriers, job creation and achieving the nation’s broadband goals, we are going to instead pursue policies that will result in less fiber, less infrastructure investment, less job creation and less broadband,” wrote Quinn in a blog post.
Quinn also noted that special access price flexibility has been in place for 12 years and that it largely pertains to comparatively slow 1.5 Mbps T-1 circuits. “We should be crafting a plan to retire these services and get businesses and competitive carriers on the path towards deploying fiber-based broadband services that are much faster than 1.5 Mbps,” he said.
The fact remains, though, that there are a lot of applications where the only communications facilities available are T-1s. That’s changing as more and more carriers deploy fiber. The question is how quickly faster alternatives to T-1s will be widely available where needed.
Considering the current FCC’s pledge to be data-driven, I would hope that’s a question the commission will do its best to answer as part of its special access reforms.
Associations representing small rural telcos have been silent on this issue so far – perhaps waiting to see what actions the FCC actually takes. Nevertheless, the prospect of special access reform is an important issue for small rural carriers who sometimes have no option for hauling broadband traffic to Internet points of presence other than special access circuits leased from the incumbent.
