Industry Ignites Over Special Access Regs
Comment (6)WASHINGTON -- The main theme of the Incompas show here this week is the need for major reform of the US competitive telecom market, focused on making it easier and less expensive for competitive service providers -- those who aren't incumbent telcos -- to reach business customers.
Virtually every major speaker on Monday addressed the competitive issues, specifically around what's called "special access" -- the last-mile connections to buildings and businesses that competitive carriers typically lease from the incumbents. And their message was consistent: The lack of competition in special access prevents them from bringing innovation and new services to a wider range of businesses.
Windstream Communications Inc. (Nasdaq: WIN) CEO Tony Thomas said the wholesale rates incumbents charge his company for those connections are often higher than the retail rates businesses pay, effectively locking Windstream out. Sprint Corp. (NYSE: S) Technology COO Günther Ottendorfer CEO said the US is in the "Stone Age" of telecom competition, compared to places like Europe and Japan. Colin Spence, senior vice president of BT Group plc (NYSE: BT; London: BTA)'s US & Canada operations, cited an instance where the high cost of special access prevented his company from bringing an innovative retail solution to the North American market. And Incompas CEO Chip Pickering repeatedly called the current largely unregulated system broken.
Then Federal Communications Commission (FCC) Chairman Tom Wheeler closed the day with the promise that his agency will fix this situation this year, with new regulations that will address pricing and contractual issues in markets where there isn't enough competition for market forces to keep incumbents in line. This wasn't an empty promise, coming days after the agency launched a notice of proposed rulemaking to seek industry input on special access. This follows months of investigation of special access contracts issued by the three largest telecom operators: AT&T Inc. (NYSE: T), Verizon Communications Inc. (NYSE: VZ) and CenturyLink Inc. (NYSE: CTL). (See FCC's Wheeler: We'll Move Fast on Biz Service Regulations.)
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Good insight, yes. I think that's key, and is probably what I was missing.
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Yeah as for their fixed-line exit I think the only thing left to do is sell off a few more unwanted residential markets (like upstate New York) that it's pretty clear the company has no interest in upgrading since the ROI will be so slow.
There sems to be constant speculation about Verizon leaving the wireline business services realm. They continue to deny that, and it doesn't make sense to me, given that you need a wireline infrastructure for the wireless business, but maybe on the access side, there's some movement.
I just wonder if they think that re-regulation of special access prices is inevitable under the Wheeler FCC and it's better to bite the bullet and try to gain something, in this case forcing everyone to play by the same rules.
Price regs will hit the incumbents much harder, hence AT&T's adamant resistance, because they provide so many more connections.
