FCC Seeks Comment on Analytical Framework for Special Access Probe

“The Commission would benefit from a clear explanation by the parties of how it should use data to determine systematically whether the current price cap and pricing flexibility rules are working properly to ensure just and reasonable rates, terms, and conditions to provide flexibility in the presence of competition,” the notice said. The agency wants “concrete suggestions” that are “analytically rigorous” and “administratively practical,” it said. Once the FCC adopts an appropriate analytical approach, it can determine “what, if any, specific problems there are with the current regime and formulate specific solutions if necessary.” Comments are due 45 days after publication in the Federal Register, with replies due 30 days later.

A NoChokePoints coalition spokeswoman said the public notice “is an important next step towards releasing the captive special access market from AT&T and Verizon’s long-standing chokehold.” The FCC’s public notice is a “really sensible step,” said US Telecom Senior Vice President Jonathan Banks.

In comments on the middle-mile public notice, Sprint repeated long-standing criticisms about the prices it has to pay for special access relative to Verizon Wireless and AT&T. “Only the incumbent LECs have the economies of scale and scope, control over rights of way, and the access to buildings needed to serve the vast majority of Sprint’s cell sites and wireline enterprise customer locations,” the company said. “This lack of competition makes Sprint and other broadband providers captive customers of the incumbent LECs.”

“T-Mobile and other providers of mobile services frequently purchase second- and middle-mile connectivity from third parties, some of which compete with T-Mobile in the retail service market,” T-Mobile said. “Today, the backhaul marketplace is particularly complex and challenging because many mobile providers are transitioning away from purchasing traditional time-division-multiplexed services, including DS1s and DS3s, to higher-bandwidth Ethernet services.”

The Wireless Internet Service Providers Association also weighed in, complaining about high costs of most links in the “broadband delivery chain” and saying that “in many cases, the costs … prohibit deployment.” No single technology, copper, fiber or microwave, meets all the needs of WISPs, the group said. “Rural WISPs, as well as those operating in urban and suburban areas, lack the scale and volume needed to attract discounted pricing.”

Verizon said the FCC shouldn’t take up special access in the National Broadband Plan. “Determining how to serve Americans lacking access to broadband is separate and distinct from the market dynamics at play in the broader context for special access services, in which there are pockets of concentrated demand, at least one provider serving that demand, and multiple competitors also seeking to serve that demand,” the telco said.

AT&T also urged the FCC to reject competitor pleas to slash special access pricing, echoing arguments from the company’s Wednesday letter to the commission (CD Nov 5 p11). “The record in the special access proceeding confirms beyond serious doubt that competitive transport networks have long blanketed the commercial areas where demand for high capacity services is concentrated,” the company said.

Verizon urged the FCC to use the Universal Service Fund to partially subsidize middle- and second-mile facilities in high-cost rural areas. A comprehensive USF overhaul would be a prerequisite to redirecting funds, the carrier said. The FCC should base support on factors that drive cost, including low density and long distances, Verizon said. Middle-mile support should be temporary, with an initial term of three years, “given that the need for such support is likely to decline over time,” it said. The commission should require recipients to certify annually “that they are using middle- mile support only for the intended purpose,” and submit “semiannual subscriber count reports for the supported area, using the same ’speed tiers’ that are used for Form 477 reporting.”

Qwest said “market mechanisms have worked well” to spur second- and middle-mile facilities. Any government action “should be focused on aiding deployment to unserved areas where the market has not supported that deployment, and significant government support has not been available,” like rural areas served by Qwest and other non-rural incumbent local exchange carriers, the telco said.

The National Exchange Carrier Association agreed “rural areas have high middle mile and second mile costs which merit inclusion in broadband universal service support.” But costs vary widely, “due to variations in density, geography, distance from population centers, and other factors,” it said. “Because of these wide cost variations, it continues to appear that broad mathematical cost models will not work as predictors of broadband deployment costs in areas served by rural rate-of-return companies.”

FiberTower, the Rural Telecommunications Group and Sprint made a joint filing through their coalition seeking use of the TV white spaces for backhaul. “The Coalition is pleased that the FCC recognizes the importance of cost- effective middle mile backhaul solutions, particularly in rural areas,” the group said. “New, higher-powered, licensed, point-to-point service in a portion of the TV White Spaces could provide an important tool to reduce the costs of middle mile backhaul by as much as 80-90 percent in rural areas and enhance broadband deployment.”

Meanwhile, CompTel took issue with the FCC’s apparent division of the unbundled loop into the last and second mile. Incumbent local exchange carriers “may attempt to interpret any alternate use of terminology and division of the unbundled loop as a change in unbundling policy,” cautioned the competitive LEC association. The FCC’s public notice didn’t suggest any policy change, but CompTel is “concerned that not using the traditional terminology for cost analysis purposes (such as feeder and distribution which combine to form the loop), as well as the implications of the Commission seeking comment on only a portion of the loop, might create controversy where none would otherwise exist.”

The FCC defined the “second mile” as the length from the central office to the remote terminal, whereas the last mile extends from the remote terminal to the end user. CompTel urged it to “evaluate and recognize the necessity of access to the whole loop from central office to customer premise for competitive broadband service.” CLECs have not and may not be able to collocate at the remote terminal, it said. “Access to the ’second mile’ alone leaves these carriers stranded from customers.”