Parties Begin FCC Fight Over Special Access Regulation of Business Market

Skirmishing over the FCC’s broad special access review began Wednesday, though many hadn’t yet filed comments in a rulemaking after the deadline was pushed back until Thursday due to the recent blizzard in Washington. In comments and releases shared with us, Sprint and some allies said the FCC needs to act to counter incumbent telco business broadband market dominance and practices. But USTelecom said 2013 industry data would show competition already was robust, and it had only strengthened since then, blunting the need for new regulation.

Sprint said the largest data collection in FCC history would show incumbent telcos, despite their claims to the contrary, "control the market for the dedicated broadband connections" called special access. "The lack of competition in the provision of these bottleneck facilities is acting as a drag on the transition to an all-IP network and deployment of mobile networks," said Sprint in a release, saying the need for dedicated backhaul would increase as mobile carriers deploy the next generation of 5G services and create denser networks. "An economic analysis of the FCC’s data makes clear once and for all that the FCC must act promptly to reform the rules governing the pricing and provision of these facilities, and to foster the development of genuine competition in the special access market."

Incompas members are providing in-depth market analyses based on the data and are proposing remedies where competition is insufficient to discipline the market, the CLEC/competitor trade group said in comments it was planning to file in FCC docket 05-25. Incompas said it was filing to "stress the importance of Commission action to investment, including by non-carrier entities, and to underscore the need for comprehensive reform to include all forms of dedicated services, including packet-based special access services." Incompas said the FCC "should adopt appropriate remedies to prevent the exercise of market power" and ensure "special access services are offered at just and reasonable rates and terms and conditions." By doing so, "the Commission will unleash a virtuous cycle of investment and innovation for wired and wireless networks alike. Competition will flourish, spurring more investment by both competitors and incumbents. Businesses of all sizes and mobile broadband consumers will benefit, and customers will be more satisfied with their ability to choose their broadband provider," the group said.

Competify emailed a statement saying incumbents were trying to deny that high-speed broadband lines were "special," and said if that’s so, they shouldn’t be concerned about the proceeding. "In the meantime, the rest of the broadband economy anxiously awaits the FCC’s efforts to finally cure this diseased marketplace," it said. The National Association of State Utility Consumer Advocates and the Maryland Office of People’s Council filed comments saying "ILECs’ dominance of critically important inputs to the nation’s economy should not be permitted to jeopardize competitors’ and consumers’ continuing access to copper-based TDM special access circuits.”

USTelecom said the 2013 market data "will show that competitive providers have their own facilities deployed throughout the country and can serve the vast majority of the nation’s business customers." The ILEC trade group said the data were a good start but showed only a "fraction" of the story: "In these comments, we provide recent information on competitors entering new markets, expanding their offerings, and investing billions to reach new and retain existing business customers. These investments and upgrades, which include new fiber routes, extensions of Ethernet and fiber networks, and new fiber connections to buildings, are simply not reflected in the 2013 data collection.”

The additional data "are both relevant and necessary to the Commission’s analysis, and must be considered to ensure that any conclusions reached are data driven and fully-supported by the record before it," USTelecom said. "The breadth and depth of CLEC and cable investment in business services over the years, and especially since the 2013 data collected by the Commission, demonstrates that the Commission’s longstanding approach of replacing regulatory restraints with competition makes sense and should be continued and expanded. Commission policies on business broadband should be focused on ensuring that all providers are incented to invest in the modern fiber and IP networks that businesses need.”