The FCC has seen the future – and it’s not laid with old copper phone lines. Recently, the FCC agreed that AT&T and Windstream could implement pricing flexibility in two markets for its “special access” customers, largely businesses and other competitors seeking access to AT&T and Windstream’s network.
Special access services are generally legacy copper-based DS1- and DS-3 lines, revolutionary technology 30 years ago but not fit for the broadband age. Unsurprisingly, business customers prefer the IP-based Gigabit and Ethernet services that offer faster speeds. Yet the special access rules hobble some telephone companies by forcing them to provide the antiquated copper lines at regulated rates, while their competitors are free to offer the new services with no pricing restrictions.
So the FCC clearly did the right thing by enabling, in these markets, pricing flexibility for everyone so that real competition can thrive. A source in the FCC Chairman’s office was quoted as saying that the special access rules “are not working as intended, and pursuant to ongoing discussions we expect the Commission will soon vote on an order setting out a path to reform them.”
Now, it’s time to take the next step and eliminate special access pricing regulation. The FCC’s goal should be to promote competition and ensuring the right incentives for investment in the next generation of IP infrastructure, not the technologies that are several generations (in both the technical and human senses) old. And as the FCC moves forward with its promised Order in this area, it should be based on the state of actual competition, requiring data from everyone who offers competitive facilities in a market. And above all, the FCC should resist any temptation to regulate IP infrastructure that is currently unregulated. Regulation is the surest way to slow down deployment of new technologies, thus slowing down business growth and the transition to a broadband-based future.
In short, the special access issue may seem like just an arcane commercial dispute, but the consequences of making the wrong regulatory decision are real. When given a chance, competition works – if, and when the FCC moves forward with its special access reform proceeding it should recognize this reality.