FCC Suspends Deregulation Rule

     WASHINGTON (CN) – The Federal Communications Commission suspended a rule that allows telecommunications companies to request deregulation of special access markets, saying it needs a better method to gauge competitiveness in those markets.
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     The FCC issued the final rule after finding that its method for gauging competitiveness in “special access markets” is flawed, and a new mechanism is needed to collect that data.
     “Special access” lines are widely used by companies to connect wireless services in places like office buildings and hospitals to main telecommunication lines. The FCC estimates the largest local exchange carriers make more than $12 billion yearly from selling special access.
     “Enterprise customers across the country rely on special access — direct or indirectly — to conduct their business. Schools, libraries, and other institutions of state and local government depend on special access to provide services to their constitutions,” the agency wrote in the order.
     Telecommunications giants like AT&T and Verizon usually lease access to rivals who want to provide special access service without having to pay more for broadband infrastructure.
     Prior to 1999, there were price caps for dominant carriers, but the FCC later adopted a rule that sought to help deregulate special access markets under certain conditions.
     The FCC stressed that special access “continues to play a critical role in our economy,” and that it would protect competition in those markets.
     “Wireless providers argue that high special access prices hinder their ability to hire employees, invest in their networks, and conduct research and development,” the order said.
     “While we cannot yet evaluate these claims of competitive harm based on the evidence to date in the record, our finding that the competitive showings the commission adopted as a proxy for competition are not working as predicted leads us to suspend the triggers and further evaluate the marketplace,” the order said.
     With the final rule, the FCC said it plans to submit a mandatory request data from companies that participate in special access markets so it can adopt a new set of conditions for deregulation.
     The 3-2 decision appears to have larger political implications.
     The issue is contentious in Washington, as congressional Democrats continue to seek regulatory relief from what is seen as predatory pricing by the dominant providers, according to the National Journal.
     Commissioner Ajit Pai, a Republican, argued that the rule would discourage providers from building fiber-optic networks in the future.
     “At a time when the private sector needs regulatory certainty and incentives to invest tens of billions of dollars in broadband infrastructure, the commission takes action today that will have precisely the opposite effect,” Pai wrote in his dissent.
     AT&T and Verizon argue that the suspension premature.
     “While today’s order acknowledges that the current rules fail to capture the full extent of existing competition, the FCC, before taking any action, should have collected the data it repeatedly has said it needs to evaluate the marketplace,” said Donna Epps, Verizon’s vice president for federal regulatory affairs said Wednesday.
     Several Democrats on the House Commerce Committee praised the commissioner’s order in statements.
     “The outdated rules currently governing the special access market need to be reformed so the businesses, competitive carriers, wireless service providers and others who rely on it can take full advantage of robust and competitive broadband services,” Rep. Ed Markey (D-Mass.) said last month.

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