The decision includes an order resolving an investigation of existing special access tariffs filed by four major telecommunications companies, known as incumbent local exchange carriers or ILECs: AT&T, Verizon, CenturyLink and Frontier. The order finds that certain terms and conditions of these tariffs were unjust and unreasonable, and had the effect of decreasing facilities-based competition and inhibiting the transition to new technologies. These companies will be required to withdraw the illegal terms of these tariffs and file new tariffs within 60 days.
The consultation looks further at current marketplace conditions, including the location of current infrastructure and the data suggesting in which places and products and for which customers competition is more likely present and for which it is more likely to be not present. Based on this analysis, the Commission proposes to identify competitive markets as those in which material competitive effects are present.
It also seeks comment on a set of de-regulatory measures in competitive markets, where it will maintain only minimal oversight. In non-competitive markets, it proposes the use of price regulation and the prohibition of certain tying arrangements that harm competition. However, tariffs would not be used to regulate broadband data service in either competitive or non-competitive markets.
Finally, the FCC proposed to eliminate the current exemption for certain Verizon services from the basic provisions of the Act governing just and reasonable offerings of telecommunications services.
The FCC's announcement was welcomed by alternative operators, such as BT and Level 3, which often rely on the ILEC networks for access to customers. BT said that "American consumers, businesses, and the US economy have paid the price for the enduring lack of competition in this market". The Competitive Carriers Association, which represents rural and regional providers, also welcomed the news, noting the importance of broadband data services also for for mobile operator backhaul.
The broader Computer & Communications Industry Association also supports the move to regulate, saying "no business should be trapped by unreasonable conditions or unfairly high rates just because there is no competitive alternative". Noting it is usually reluctant to call for regulation, the CCIA said that "we recognize that in places where there is little to no competition, like this one, it can be necessary to prevent abuse.”
The incumbents were less positive. Lobby group USTelecom said the FCC's own data showed the market was competitive. Facilities-based competitive providers are "plenty close enough to compete for nearly every location where a customer wants BDS [business data services]", according to a filing submitted by USTelecom members AT&T and CenturyLink.
CenturyLink said separately in a joint statement with Frontier Communications and Fairpoint that the FCC's deregulatory stance of the past 20 years had already proven "very successful, fostering competitive entry by cable companies and others, network investment, technological advances and much lower prices for capacity". It called on the regulator to continue this policy and not "turn back the clock" with new restrictions.
The operators are against any regulatory rate reductions for broadband data services in the highest cost areas, saying this would prevent or slow competitive growth and make it difficult for current providers to continue with planned upgrades and future investments. "Ironically, the main beneficiaries of such rate cuts would be large wireless providers that sold off their rural properties and can well afford to pay the actual cost of network investments that they choose not to make themselves.”
