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FCC halts special access deregulation

Thu, 08/23/2012 - 3:46pm
Maisie Ramsay, Wireless Week

The FCC has put the brakes on its deregulation of the special access market, services that provide wireless operators with access to critical backhaul for their networks.

The commission voted 3-2 along party lines in favor of temporarily suspending rules that automatically granted requests to change prices on special access services.

There is "significant evidence that these rules, adopted in 1999, are not working as predicted, and widespread agreement across industry sectors that
these rules fail to accurately reflect competition in today’s special access markets," the FCC said in its decision.

The vote was conducted on Aug. 15, but the results and order were not made public until late Wednesday.

The commission plans to collect data on the market as it works to hash out permanent rules to replace the13-year-old regulations.

Sprint, T-Mobile USA and other carriers have argued that companies like AT&T and Verizon Wireless are using their dominance in the special access market to charge excessive fees for access to backhaul, reducing the amount of capital available to invest in their own infrastructure.

"There are no competitive market forces sufficiently strong enough to prevent or limit the scheduled rate increases," Sprint said in a 2010 ex parte filing about planned raises in AT&T's fees. "Customers such as Sprint cannot 'vote with their feet' to object to the scheduled rate increases, because in the overwhelming majority of cases, no competitive alternative exists."

AT&T and Verizon argue that their smaller competitors have sufficient access to alternative backhaul providers, and want the FCC to continue lifting limits on the prices they can charge for access to their fixed infrastructure.

The Rural Cellular Association applauded the FCC's decision, calling the suspension of deregulation "long overdue."
"Deregulation has allowed large ILECs [incumbent local exchange carriers] to abuse their market power and discourage competition through unjust and unreasonable terms and conditions, and consumers are paying the price," RCA President and CEO Steve Berry said in a statement.

Verizon expressed disappointment in the vote, saying the FCC should have done more research before taking action.

"The FCC, before taking any action, should have collected the data it repeatedly has said it needs to evaluate the marketplace," Verizon regulatory affairs executive Donna Epps said in a statement. "There are many providers – cable companies and CLECs – that compete vigorously with special access. Given this intense competition, any efforts to impose new pricing regulation are unjustified and will depress investment in these networks so critical to our economy.”

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