FCC investigating AT&T, Verizon business practices

After complaints that carriers are implementing unreasonable terms and conditions in selling special access, the FCC has started an investigation of AT&T, Verizon, CenturyLink and Frontier unfair business practices.

So-called "special access" connections (primarily delivered over copper) are used by small businesses, government offices, hospitals, medical offices, schools, libraries, ATMs, and credit card readers. The investigation will focus on older time-division multiplexing (TDM-based) data services such as DS1 and DS3 that are still subject to price regulation and tariff requirements.

"Competitive [local exchange carriers]allege that incumbent LEC business data services tariff pricing plans incorporate a complicated web of all-or-nothing bundling, loyalty and term commitments, complex enforcing penalties, circuit migration rules and other provisions," the bureau's filing said. "They assert that the effect is to lock up substantial proportions of carrier and end-user demand, which locks out competition for such demand and consequently harms both competition and innovation."

AT&T wasn't happy about the investigation:

"Opening a tariff investigation on special access services is a step towards rate re-regulation in a space that is highly competitive and getting more so as cable companies and other new entrants aggressively compete," AT&T's vice president of Federal Regulatory Frank Simone wrote in a statement. "The terms the Commission is reviewing are commonplace in most commercial contracts and in fact are being used by our competitors in their own contracts. Each day the Commission wastes investigating and interfering in commercial agreements between companies that build infrastructure and those that do not is a day it is not encouraging fiber investment or looking boldly towards the benefits those investments will provide to consumers."

Sprint didn't complain, it even cheered the FCC's decision.

"These harmful lock-up and penalty provisions not only harm competition, the high prices they protect are slowing the transition to an IP world. For the nation to realize the benefits of real choices and lower prices for broadband services, the FCC must take steps to address the stranglehold a few companies have on these basic inputs," Sprint said in a statement.

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