FCC Draft Special Access Tariff Order, FNPRM Seen Likely To Circulate
A draft special access tariff order and Further NPRM are expected to circulate Thursday at the FCC for consideration at the agency's April 28 monthly meeting, informed sources told us Wednesday. The draft order flows from an FCC investigation of large incumbent telco tariff practices, and the FNPRM would propose a new regulatory framework, said one source, who said a delay is possible but unlikely. "We expect both items to be circulated" Thursday, said a telecom industry official. An industry attorney said there was some momentum for placing the items on the April meeting agenda, with slippage still possible.
The FNPRM would probably contain market analysis based on industry data collected by the commission, said another stakeholder. An FCC spokesperson didn't comment. Sprint, CLECs and other Bell critics are pushing the FCC to rein in ILEC special access pricing and practices that they say harm competition and consumers. Incumbents say new regulation would be counterproductive in an increasingly competitive business market.
The FCC said the sensitive industry data could be publicly disclosed in aggregated forms without violating a protective order restricting access to, and disclosure of, confidential and highly confidential information. There was no opposition to a joint Incompas/USTelecom request (see 1603070025) that the agency allow parties to disclose certain types of information derived from the data, said an FCC public notice Wednesday. Incompas and USTelecom debated certain details in meetings summarized in filings (see here and here) posted in docket 05-25.
The commission said it would allow certain categories of information to be made public, given the apparent industry agreement. "Participants may publicly disclose numerical, statistical, and graphical descriptions of data from the business data services data collection aggregated at a national or regional (multi-state) level," said the PN. "National and regional level data also may be disaggregated and reported by type of provider, specifically, ILECs, traditional CLECs, and cable, and by type of census block, specifically, urban, suburban, and rural."
Parties may also disclose "numerical, statistical, and graphical descriptions of data aggregated at the Metropolitan Statistical Area (MSA) level and the state level provided that the MSA or state is not identified," the PN said. "Anonymized MSA- and state-level data may be further disaggregated and reported by urban, suburban, or rural areas within the MSA or state; by type of regulatory flexibility category, specifically, Phase I, Phase II, and no pricing flexibility; and by type of provider (ILEC, traditional CLEC, and cable). For example, a participant could publicly state 'Within the urban areas of a certain MSA, 33% of the businesses are served by an ILEC; 33% are served by a CLEC; and 33% are served by a cable company.'” The FCC may find that "other analytical results and statistical descriptions" could be disclosed, but the categories specified are a "safe harbor" that don't need further agency determinations, it said.
A significant number of buildings would qualify for business broadband investment in Charlotte if the FCC doesn't expand special access regulation, said a study released Wednesday, done by Hal Singer of Economists Inc., which used the North Carolina city to construct a model about the broader market effects of regulatory decision making. "If the FCC refrains from subjecting telcos’ fiber-based networks to price regulation, we project that roughly 122,000 buildings nationwide will be newly lit by ILEC fiber in the coming five years, an increase in fiber penetration of ten percentage points, representing $9.9 billion in ILEC capital expenditures," the report concluded. "This study seeks to estimate the reduction in fiber investment relative to that baseline when special access regulation is expanded to cover Ethernet-based services. By trimming the expected revenues of unlit buildings via price regulation, expansion of the special access rules threatens to reduce ILEC fiber investment.”
“Using a model calibrated to the incumbent network in Charlotte and then extrapolating the results to the United States, we estimate that expansion of the FCC’s special access rules could eliminate 43,560 jobs annually over a five-year period, and could reduce economic output by $3.4 billion per year over a five-year period," Singer's report said. "Special access rules could prevent 67,300 buildings from being lit by ILEC fiber. This material diminution in businesses served by fiber is flatly inconsistent with the FCC’s Congressional mandate to expand broadband deployment." The Communications Workers of America said the special access market is "highly competitive," recounted a filing summarizing a CWA meeting with aides to Commissioner Jessica Rosenworcel.
The Consumer Federation of America released a paper Tuesday by Research Director Mark Cooper that offered a different view. Cooper estimated ILECs are "overcharging" business customers by $20 billion per year, causing more than $150 billion in direct and indirect macroeconomic losses to consumers since 2010 (see 1604050031).