All Special Access Purchasers and Providers Must Respond to Data Request
All providers and purchasers of special access service must respond to the FCC’s data request on the state of the special access marketplace, according to the long-awaited order which was released Tuesday. The order exempts companies with fewer than 15,000 customers, and fewer than 1,500 business broadband customers, from providing data regarding best-efforts business broadband Internet service. “Nascent technologies,” such as wireless ISPs, are included in the request. Chairman Julius Genachowski called the order “a carefully crafted nationwide collection of facilities, pricing, and demand information” that will give the FCC “an exceptionally robust data set to analyze the market for special access services.” A deadline for submitting the special access data won’t be set until the Office of Management and Budget gives Paperwork Act Reduction approval, an FCC official said.
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A further notice of proposed rulemaking seeks comment on a proposal to use the data to evaluate competition in the market for special access services. The order was approved unanimously, but the Republican commissioners dissented from the portions of the further notice seeking further comment on possible changes to the pricing flexibility rules. Commissioner Robert McDowell called such a move “premature.” Commissioner Ajit Pai said he couldn’t see “the sense in proposing rules when we have not even collected the data yet, let alone reviewed it."
The order seeks information on “the full array of traditional special access services, including DS1s and DS3s, and packet-based dedicated services such as Ethernet.” The order also discussed the argument going on between stakeholders about whether “best efforts services” -- non-dedicated Internet access lines -- are part of the relevant product market. “We need not resolve the market-definition issue here,” the commission said. “For purposes of this data collection, we conclude it is best to simply take a broad approach.” The commission defined the scope of the data collection to include best-efforts business broadband Internet services, defined as data services with a capacity of at least a DS1 connection, marketed to enterprise customers. The commission will also collect data on intrastate special access services, and services offered via a state-level tariff or state-approved contract. “Doing so is necessary to ensure that we have a clear picture of all competition in the marketplace,” the order said.
"Competition is the lifeblood of our free market economy,” said Genachowski in a statement. The data collection would let the commission modernize its policies for access to the dedicated business communications lines that are used for everything from cell tower backhaul to schools and libraries, he said. Although the rules governing special access were adopted in “good faith,” they were based on the “predictive judgment at the agency at the time,” which has “not been working as intended,” he said. Because the rules “fail to reflect today’s market realities,” the commission suspended new pricing flexibility grants in August, and launches Tuesday’s data collection order to get a “comprehensive nationwide picture of the competitive landscape for special access services” -- the next step in the process, he said.
The FCC seeks the “majority of the data for calendar years 2010 and 2012” -- these two years “appropriately balances the need for time series data with the burden of producing data for multiple years,” the order said. The commission will collect two years’ worth of data for market structure, price and demand -- observed sales and purchases. That will allow for an analysis that controls for factors that vary widely across geographic areas, but not within a given geographic area, the commission said. The data sought are “comprehensive,” the order said, and include information on the “nature of the location and the nature of the connection serving that location.” ILECs must submit data concerning the number, nature and site of any unbundled network elements they have sold. The commission also seeks detailed price data to let it compare different providers’ prices while controlling for difference in cost-causing factors, it said.
The further notice seeks comment on a market analysis that the commission intends to undertake “in the coming months” to evaluate whether the pricing flexibility rules result in “just and reasonable special access rates and what regulatory changes may be needed.” All commissioners approved the sections of the further notice seeking comment on the proposed market analysis, but McDowell and Pai dissented from sections seeking comment on possible changes to the pricing flexibility rules after that analysis. “Among other defects, finalizing a further notice before the record is filled with new evidence is premature,” McDowell said in a statement. “Instead, the Commission should collect the data, analyze it and then issue a further notice. I am concerned about the precedential value of this backwards arrangement. It has all the markings of an outcome-based proceeding.” Pai said the “sensible course would be to collect the data, review it to ensure that we have what we need, and then propose new, specific rules that the public can comment on with full access to the data. Instead, we seek comment without any concrete proposals and set a deadline for such comment without any regard to how long the data collection (which still requires approval from the Office of Management and Budget) actually takes."
Rep. Mike Doyle, D-Pa., said in a news release the order “has been a very long time coming.” “I commend Chairman Genachowski for his leadership not only to get this massive data request out the door, but also to begin to lay down a framework for how the FCC could respond to the information it collects about this critical market.”