FCC allowed to question AT&T, Verizon on business broadband pricing

The OMB gives the agency permission to collect data on the special-access business broadband market

The U.S. Federal Communications Commission has the green light to collect new data on the pricing of so-called special access services, the middle-mile network services used to deliver business broadband and mobile service backhaul.

The U.S. White House Office of Management and Budget (OMB) has given the FCC permission to collect new data in the long-running dispute over special access pricing. The FCC announced this week that the OMB approval was needed for the agency to comply with the Paperwork Reduction Act, a law designed to reduce the paperwork burden the government imposes on businesses.

AT&T and Verizon Communications control an estimated 80 percent of the special access market, and competitors have complained for years that the two dominant telecom carriers are charging excessive prices for special access services. Special access is used by businesses for broadband, credit-card processing and cash machines, as well as by competing telecom and mobile carriers for backhaul.

Several competitors to AT&T and Verizon proposed the OMB approval for data collection in the FCC's slow-moving inquiry into special access rates. The FCC circulated a proposed order on special access in mid-2012, but late that year, also asked for comments on the special access market. Those comments aren't due until late this year.

Complaints about special access rates date back to years earlier.

OMB's approval will help "pave the way for the commission's review of business broadband service providers' market power, business practices, and pricing," carrier TW Telecom said in a statement. "The FCC's access to this pertinent market data will help open the window to increased competition in the industry."

The NoChokePoints Coalition, a group calling for FCC intervention in the special access market, called the OMB approval an important step forward.

"Countless industries and organizations and hundreds of millions of customers across the country depend on this critical broadband infrastructure to connect our cell phones, workplaces, banks, factories, data centers, universities, and hospitals to enable communications among customers, employees, suppliers, government, and each one of us," a coalition spokeswoman said by email.

The FCC last collected data on special access in 2007 and showed large profits by the incumbent carriers, she said.

Asked for a response to the OMB approval, an AT&T spokeswoman pointed to a 2012 blog post by Bob Quinn, the company's senior vice president of federal regulatory affairs.

FCC inquiries into the special access market are unnecessary because the telecom industry is moving to newer technologies, AT&T has argued.

FCC data collection on special access fees comes "against a backdrop where the industry ... is rapidly moving yesteryear's copper-based special access services to fiber-based, IP services," Quinn wrote in 2012. "This transition is attracting new competitors, creating greater network capacity and broadband speeds, and promoting industry-wide investment and job-creation."

FCC Chairman Tom Wheeler, however, called special access "increasingly important in the digital economy." The new data collection will help the FCC "better understand competition in this marketplace, and the impact on consumers as we pursue the commission's statutory mandate to ensure special access services are provided at reasonable rates and on reasonable terms and conditions," he said in a statement.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.

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Tags governmentbroadbandregulationtelecommunicationat&tU.S. Federal Communications CommissionVerizon CommunicationsNoChokePoints CoalitionBob QuinnU.S. White House Office of Management and BudgetTW TelecomTom Wheeler

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Grant Gross

IDG News Service
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