New Coalition Calls for Special Access Overhaul
The FCC should stop “excessive” special-access pricing by AT&T and Verizon, the NoChokePoints Alliance, a new coalition of competitors and customers of the big phone companies (CD June 18 p7), told reporters Monday. “Releasing the broadband economy from the choke hold these huge phone companies have on the special-access market will be a catalyst for innovation and investment in the broadband marketplace,” said spokeswoman Maura Corbett. The coalition’s statement prompted a flurry of counter-statements from incumbent local exchange carriers and others.
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!
Alliance members include many previous advocates of a special-access revamp, including wireless carriers Sprint Nextel and T-Mobile and competitive local exchange carriers XO Communications and TW Telecom. There are new names, too, including the Computer & Communications Industry Association, British Telecom, Public Knowledge and ACUTA, a higher- education group. Washington-based public relations firm Qorvis is handling media for the alliance.
The new coalition isn’t finished recruiting. “Stay tuned,” Corbett said. But the alliance has no plans to expand its list of issues beyond special access, she said. It’s expected that another, as yet unannounced, coalition of AT&T and Verizon competitors (CD May 11 p1) may take up competitive issues like wireless roaming and VoIP interconnection.
The coalition believes a special-access overhaul must come from the FCC and is concentrating most of its efforts there, alliance officials said. But “we will talk to anybody who can help show the FCC” that the market needs regulation, Corbett said.
Congress should “keep the pressure on the FCC,” said Colleen Boothby, an attorney with the Ad Hoc Telecommunications Users Committee. Boothby said her group doesn’t plan to lobby Capitol Hill but other members of the coalition may. Public Knowledge “certainly will,” said President Gigi Sohn. “The expectation here is not to have Congress legislate, but to raise the profile [and] put pressure on the FCC.”
Special access may also concern the Federal Trade Commission for antitrust and consumer-protection reasons, said Sascha Meinrath, a director at the New American Foundation. “Some of us have talked to the FTC about this as well,” Sohn said, “particularly because the FCC currently just has an acting chairman and he’s viewing his role as a limited one,” while FTC Chairman Jon Leibowitz’s interest in special access has grown.
AT&T and Verizon have stifled competition in the special-access market, requiring special-access circuit buyers to pay unreasonably high prices, said Bob Azzi, a Sprint senior vice president. The “price gouging” has a “ripple effect,” said Boothby, who represents Fortune 500 companies as telecom customers. When a business has to pay extra for phone service, its customers ultimately foot the bill, she said.
“These are the same old tired and discredited arguments we've heard for years, simply wrapped up in a new package,” USTelecom President Walter McCormick shot back. “Between the mounting public evidence that competition is rising, and the telling, deafening silence from the other side when policymakers ask for information on their competitive offerings, it’s quite clear that the allegations are frivolous.”
Special access prices are low and falling, McCormick said. Incumbents are under price controls in most of the market, and regulation has been lifted only “where the FCC has determined there is adequate competition,” he said. “Additionally, prices in the high-capacity services market have come down substantially from 2001.” AT&T’s prices fell more than 20 percent from 2004 through Q1 of 2007, he said.
But NoChokePoints members said prices haven’t fallen. “I've lived in this business for 28 years and the only thing I've seen are increases … from the large ILECs,” said TW Telecom Vice President Ken Folderauer. Fortune 500 companies “are not seeing price decreases,” either, said Boothby.
USTelecom said the critics have refused to provide information on their own competitive facilities. “These interests have repeatedly refused to document their claims, even in response to inquiries from GAO, the FCC, and state regulators in their attempt to assess competition,” it said. “Without information about the presence of competitive alternatives in the marketplace, policymakers cannot make an informed decision on the need for increased government intervention.”
CLECs have agreed to provide data if that’s what the FCC wants, Corbett said. But the alliance believes there’s no need to update the record on special access, officials said. “I'm feeling very refreshed,” Sohn said. The commission has already received comments, and the GAO and others have collected data in the time since, she said.
If the commission decides to seek more data, the request shouldn’t be linked to a brand new rulemaking, Corbett said. Another FCC notice of inquiry would be a “setback,” Sohn said. “If you're going to have any further proceeding, it’s got to be really, really targeted.” Boothby agreed: “The only next step they need is an NPRM that identifies the specific regulatory changes they're going to make in their current regime to stop the overpricing.”