Special Access Rules, Arbitration Part of AT&T Merger Debate
With AT&T-BellSouth merger talks starting anew, the focus is now on the future of special access and whether the FCC will approach it by mandating baseball-style arbitration or a broader rulemaking. Sources said Thurs. it’s unclear how far talks advanced, if at all, since Comr. McDowell declined to participate in the review (CD Dec 20 p1). With key staff and commissioners off next week, scant progress is expected.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
AT&T this week met with all 4 participating commissioners or their staffs; James Cicconi, head of AT&T’s D.C. office, met with Comr. Copps late Mon. at the very time McDowell announced his decision. AT&T said in ex parte filings that in each meeting they discussed “conditions previously proposed by other parties in this proceeding” and that talks were “consistent with all of the filings made by AT&T and BellSouth in this proceeding.”
Along with special access, net neutrality and a build out requirement for BellSouth’s 2.5 GHz spectrum seem to be in play. A special access rulemaking likely would be combined with a means of examining whether individual rates are too high and need adjustment before completion of special access rules.
“Everybody is just sort of waiting for AT&T to make a move,” said an attorney active in the discussions over special access rates: “The ball is in AT&T’s court. AT&T has been sitting on their hands… They're not moving on. They're just saying no, no, no.” An AT&T spokesman declined to comment Thurs.
AT&T and BellSouth always have been nervous about arbitration, an industry source said. “It subjects them to a process where all their contracts can be reopened,” he said: “They could be one-year, two-year, three-year, four-year contracts. Whatever. If there’s fresh look you could have all of them all of a sudden open and up for arbitration. You could have hundreds of these major contracts with carriers, CLECs, enterprise business customers, be potentially reopened.”
Arbitration presents the 2 Bells with some risks, the source said. “Even if they think they can win a good number of negotiations, it forces you to kind of come closer to the other side instead of low-balling it,” the source said: “It gives [special access customers] negotiating leverage because it forces AT&T to be more moderate in their demands.” A rulemaking may make more sense, the source said: “They've got various proceedings out there, there’s a court remand, petitions for this, petitions for that. For performance matrix. For reinitializing rates.”