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FCC's 'Special Access' Order Reignites Debate Over Need for New Regulations

Tuesday, June 12, 2012
By Paul Barbagallo

The fight over whether the Federal Communications Commission should approve new rules for “special access” services has been reignited with the revelation that the agency's chairman, Julius Genachowski, has begun circulating an order setting forth what FCC have called a “clear path to reform.”

A representative for Genachowski told BNA June 4 that the order would, among other things, suspend all petitions for pricing flexibility while the agency collects more data and drafts new regulations.

While few details were made available, Verizon Communications, AT&T Inc., and CenturyLink, the largest telephone companies in the country, are expected to be subject to new regulatory constraints.

As expected, the former Bell companies offered criticisms of the FCC's order and its smaller competitors.

“The services in question are called 'special access' services--95 percent of which are slow 1.5 megabits per second (Mbps) … (think POTS) services,” said Bob Quinn, AT&T's senior vice president of federal regulatory and chief privacy officer, in a blog post June 5. POTS stands for plain old telephone service.

“That is not a misprint,” Quinn wrote. “We are not talking about 100 Mbps connections--services we should actually be figuring out how to get to more people in more places. We are not even talking about fiber. We are talking about legacy, copper-based services that are so slow the services would not qualify for a single dollar of Universal Service Fund [USF] support if they were deployed to homes throughout rural America under the commission's recent USF order.”

In many areas throughout the United States, only one telecom carrier maintains the high-capacity fiber-optic lines--special access--that provide huge volumes of phone and internet connections to businesses. For years, wireless carriers led by Sprint Nextel Corp. and T-Mobile USA, and other smaller market players such as XO Communications and Level 3 Communications, have alleged that AT&T Inc., Verizon Communications Inc., and Qwest Corp. charge too much to lease capacity on their lines.

These companies rely on special access connections to provide broadband services to business customers. The lines, also known as DS1s or DS3s, allow Sprint and other companies to backhaul their customers' voice and data traffic from a cell site to the communications network.

But AT&T and Verizon argue that their rates have actually decreased, and in some markets cable operators also offer such services.

AT&T's Quinn said the FCC should instead craft a plan to retire these services and get businesses and competitive carriers on the path toward deploying fiber-based broadband services that are much faster than 1.5 Mbps.

“The fact is that special access is competitive and has been operating under regulatory flexibility for more than 12 years,” said Walt McCormick, president and chief executive officer of USTelecom, in a statement June 5.

Sprint Nextel, among other rivals to AT&T and Verizon, lauded the FCC's action, calling special access the “lifeblood of the broadband economy.”

“These high-speed broadband circuits work every time you use your credit card, visit your bank's ATM, use your mobile phone, visit a Web site or send an email,” said Charles McKee, Sprint's vice president for government affairs. “That's why it's such welcome news that the FCC is considering corrections to its rules that would protect American consumers and businesses from even higher prices for these high speed broadband connections.”

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