The Federal Communications Commission has taken an important procedural step in rewriting the rules governing the pricing of high-capacity middle-mile telecom services, an arcane market commonly known as special access.
Critics of the current regime complain that large incumbent carriers such as AT&T and Verizon, which control the bulk of the nation's middle-mile infrastructure, charge smaller providers inflated rates for use of their networks.
On Thursday, the FCC issued a detailed notice requesting comments from the public on how it should proceed with an inquiry into the market, a move that could lay the groundwork for a fundamental reform that would see the agency impose pricing restrictions on incumbent carriers.
"This was a necessary prerequisite," Charles McKee, Sprint's vice president of governmental affairs, told reporters on a conference call this morning. "It indicates that they're taking it seriously."
Sprint is a member of a group of smaller carriers, business groups and consumer advocates that has coalesced around the issue in the form of the No Choke Points Coalition, a not-so-subtle name intended to paint the incumbents as toll collectors charging unreasonable fees for high-speed Internet access.
Through the special access market, smaller carriers and businesses buy connections into the larger broadband Internet infrastructure from the incumbent telecom providers. Critics have argued that the marketplace has become distorted, with prices escalating unchecked following a period of deregulation.
"It's long overdue. The commission has been on notice for more than a decade that the special access is broken," said Colleen Boothby, a partner with the law firm Levine, Blaszak, Block & Boothby who represents the Ad Hoc Telecommunications Users Committee, a member of the No Choke Points Coalition.
"This is an issue that costs American businesses a lot of money day after day after day," Boothby said. "They can't afford to have their pockets picked."
AT&T and Verizon, as well as the trade association U.S. Telecom, have each shot back at the No Choke Points campaign, claiming that the coalition has failed to produce credible data to back up its claims of price gouging.
The notice the FCC issued on Thursday seeking comment aims to bring clarity to the murky data surrounding the special access market, and Sprint's McKee said he took the "level of granularity" in the notice as an encouraging sign.
The FCC opened its proceeding in the special access market in November, seeking comment about whether the current rules are working. The commission also included special-access reform as a recommendation in the national broadband plan it released earlier this year.