NARUC Encourages FCC to Press Forward on Special Access Probe
NARUC supported the FCC’s enhanced probe of special access prices in a statement released Thursday. Meanwhile, the debate continues about special access reform, with opponents and supporters continuing to weigh in. Chairman Julius Genachowski circulated an order this week suspending the grant of any new “price flexibility” petitions while the special access probe moves forward and denying three petitions seeking pricing flexibility (CD June 5 p3). The order is the most contentious item imminently before the agency, with both Commissioners Robert McDowell and Ajit Pai expected to raise objections (CD June 7 p1).
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
"I chaired NARUC’s Task Force on Special Access and I'm pleased to see that the Chairman is trying to provide a path forward to a more statistically valid way of estimating competition in special access markets,” said Commissioner John Burke of Vermont, chair of the NARUC Committee on Telecommunications. Burke noted that NARUC released a report on special access more than three years ago (http://xrl.us/bna5wg) and approved a resolution in July 2009 saying the FCC should “consider improving its current methods for determining where competition is effective” in the special access market. But critics continue to question why the FCC should freeze filing of flexibility petitions.
"My concern is this is another incident where this FCC is showing its willingness to regulate, even when markets are competitive,” said Fred Campbell, director of the Competitive Enterprise Institute’s Communications Liberty and Innovation Project, in an interview Thursday. “By freezing special access petitions that would be filed in markets that meet competitive threshold they are in essence saying we are going to continue to do price regulation even though that market is competitive ... my concern is this a harbinger of things to come? If you're willing to price regulate competitive markets then what are the limits on when price regulation is appropriate?"
Campbell, former chief of the FCC Wireless Bureau, said the freeze in some ways obviates the need for the FCC to do more. “If what you want to do is keep price regulation in place in those markets, the freeze does that,” he said. “The amount of time the investigation takes and the amount of time you take to analyze and make some form of forward looking decision, during the interval those markets continue to be price regulated."
Meanwhile, Verizon made a filing at the FCC supplementing the record on its “pro-competitive special access discount plans” as the FCC’s special access investigation deepens. “Verizon offers many different special access discount plans that provide substantial benefits to a wide range of special access purchasers,” the carrier said (http://xrl.us/bna5xm). “Verizon developed these plans to provide customers with more choices to meet their needs. They benefit both Verizon and its customers because they reflect the economic efficiencies associated with the additional predictability and certainty they provide.” Verizon said its plans include regional offerings in both former Bell Atlantic and NYNEX areas and “individually negotiated pricing flexibility contracts” where possible.
But Public Knowledge Legal Director Harold Feld said it’s high time the FCC launched a real investigation of special access prices. “This isn’t some musty old copper no one gives a crap about, but a rather critical bit of infrastructure generating between $18-20 billion annually and impacting pretty much every aspect of mobile communications and broadband access,” Feld said in a bog entry (http://xrl.us/bna4y4). “Despite opening a proceeding in 2005 to determine whether it had perhaps been a shade too optimistic about emerging competition when it deregulated special access, the FCC has not done much. Mostly, the FCC has contented itself with asking the same set of questions every couple of years about the special access market and whether or not it’s ‘competitive.'"
Colleen Boothby of Levine, Blaszak, counsel to the Ad Hoc Telecommunications Users Committee, agreed it was time for the FCC to take a deeper dive on special access pricing. “The current rules block pricing flexibility in competitive areas, where it should not be blocked, and allow pricing flexibility in non-competitive areas, where it should not be allowed,” she said. “So policy makers on both sides of the pricing flexibility issue have good reasons to support the order since it suspends the rules until they are fixed.
But Larry Downes of TechFreedom questioned in an editorial in Forbes (http://xrl.us/bna5y7) why the FCC was delving deeper into special access rules. “Rather than figuring out how to smother special access in its not-so-benign embrace ... the FCC should heed the lessons of a deregulated broadband market, which has yielded profound value, economic as well as social,” he said. “Obsolete phone regulations applied to that market would achieve just the opposite. Why fix a new and rapidly evolving system that’s working so well using tools that helped break the old one?”