Pai, McDowell Concerned About Parts of Special Access Order
A draft order circulated by FCC Chairman Julius Genachowski earlier this week freezing further grants of pricing flexibility as the agency seeks more data on special access pricing looks likely to be the first contested order before the newly reconstituted FCC, complete with a first “no” vote from new Republican Commissioner Ajit Pai.
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The wireline aides to the commissioners were only briefed on the order Wednesday afternoon and got it for the first time late Monday night, so it is still under review in the various offices, agency officials said Wednesday. But industry and government officials said they expect resistance from Pai and Commissioner Robert McDowell, the other FCC Republican. Part of the problem is that the order also denies three pending petitions seeking pricing flexibility while the FCC seeks data, two from AT&T and one from Windstream. “As a procedural matter, changing the rules mid-game to justify denying three petitions gives off a bad procedural odor,” said an industry official.
Medley Global Advisors analyst Jeff Silva said he expects “pushback” from McDowell and Pai, but also predicted that Genachowski will have the votes he needs, with support from fellow Democrats Mignon Clyburn and Jessica Rosenworcel.
AT&T Senior Vice President Robert Quinn made the rounds at the FCC Monday, meeting with aides to Genachowski, McDowell and Pai to discuss special access, according to ex parte filings. “AT&T argued that as no one has challenged its showing that it has met the applicable triggers for pricing flexibility in the San Antonio and San Francisco/Oakland metropolitan statistical areas it plainly is entitled under the Commission’s current rules to the relief it has requested,” AT&T said (http://xrl.us/bnaujw). Genachowski recommended that both petitions AT&T discussed be rejected.
Tw telecom in a letter to the FCC countered recent arguments by AT&T, Verizon and CenturyLink on the state of the special access services market. Key parts of the letter were redacted in the version made public. “As tw telecom has explained, in order to compete in the downstream retail business services market, tw telecom has no choice but to purchase special access services under ILEC Special Access Plans and commercial agreements,” the carrier said. (http://xrl.us/bnaq4d). “Notwithstanding the overwhelming evidence to the contrary, the BOCs argue in their recent ex parte filings that the onerous and exclusionary terms of the ILEC Special Access Plans are entirely reasonable. Apparently recognizing the weakness of this assertion, the BOCs next fall back on the assertion that TDM-based special access services should not be the subject of regulatory concern and that the fast-changing special access market renders the existing record stale and defies fact-based analysis. None of these last-ditch arguments has any basis in fact or law.”