FCC Considers Special Access Rate Changes

     WASHINGTON (CN) - The Federal Communications Commission announced its intention to revisit special access rules to ensure both businesses and consumers are benefiting from a fair marketplace.
     The FCC says it plans to initiate a comprehensive data collection program to evaluate competition in the market for special access services.
     The rules date back to 1991 when the FCC implemented price cap regulation as a form of "incentive regulation" that seeks to "harness the profit-making incentives common to all businesses to produce a set of outcomes that advance the public interest goals of just, reasonable, and nondiscriminatory rates, as well as a communications system that offers innovative, high quality services."
     It means the rates providers were allowed to charge for services became limited. They were set by the Price Cap Index, which is based on a specific formula involving a measure of inflation and other factors. However, in 1999, the FCC adopted the Pricing Flexibility Order to ensure regulations did not unduly interfere with the operation of interstate access markets as competition developed. The order provided regulatory relief for markets that could justify it.
     In 2000, the FCC adopted the CALLS plan, a five-year interim, industry-proposed regime designed to move towards a more market-based approach to rate setting. In January 2005, the FCC released the Special Access Notice of Proposed Rulemaking, which initiated a broad examination of what a new regulatory framework would look like. As the markets continue to develop, the FCC is continuing to work on developing a process to take an accurate look at the industry in the wake of the Pricing Flexibility Order, the FCC says is "not working as predicted."
     The FCC has received several suggestions regarding the mechanism for gathering the data required for the new regulatory framework, as well as suggestions on a future pricing model. One idea involves the adoption of a market power analytic framework, which proponents say will "ensure that, going forward, the commission's evaluation of competition for special access is a comprehensive, economically sound and data-driven means of understanding where and what kinds of regulatory relief are justified."
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