AT&T accuses Verizon of special access doublespeak, says proposal contradicts telco's pro-investment stance

AT&T (NYSE: T) is taking another swipe at Verizon's (NYSE: VZ) joint business data services (BDS) proposal with Incompas, accusing its fellow Northeast telco brother of doublespeak.

This development is interesting in that AT&T and Verizon, which represent two of the largest ILECs, typically are aligned on regulatory issues like business data services (BDS).

Caroline Van Wie, assistant VP of federal regulatory for AT&T, said in a blog post that the joint Verizon/Incompas proposal could hinder service providers' ability to invest in fiber and next-gen IP infrastructure.

"Remember, this is the company that appealed the 2010 net neutrality decision only to argue ten months later to re-enact the same rules on the same legal basis which it had successfully appealed," Van Wie said. "But the BDS policy Verizon is now advocating will result in lower incentives for all carriers to invest in fiber infrastructure in this country."

Van Wie added that the possible reason for Verizon's new stance is that Verizon has divested wireline assets in three states -- California, Florida, and Texas -- and that may be a sign that the telco will cut wireline network investments.

"It may be that Verizon's current business plans actually call for lower capital investment having just sold off vast amounts of their wireline infrastructure, but the fact remains that a "less fiber investment" policy is not one the FCC should be pursuing," Van Wie said.

AT&T cited how Verizon itself said in an FCC filing in January how placing regulations on BDS it would not only drive CLECs to purchase more ILEC circuits, a scenario that could hinder new network investments. 

"Even where competitors may find it profitable to deploy facilities of their own, further regulation of ILEC special access prices could create a scenario where the competitor could earn even greater profits using an ILEC's legacy facilities," Verizon said in a FCC filing. "This would impede investment and competition. Second, imposing new price controls on ILEC special access services would also curb ILECs' own incentives to invest."

AT&T is hardly alone in its criticism of the Verizon/Incompas proposal.

CenturyLink (NYSE: CTL) and a group of mid-sized ILECs, including Consolidated Communications, FairPoint and Frontier, noted in a filing that the Verizon/Incompas proposal is "a self-serving attempt to ignore the cost of building tomorrow's infrastructure while seeking below cost rates from the providers who build the nation's networks." 

Earlier, CenturyLink, AT&T and other providers filed a motion to strike the FCC's BDS further notice of proposed rulemaking (FNPRM), citing how cable operators understated their capabilities to serve the Ethernet services market.

In that filing, CenturyLink cited updated filings made by Charter Communications (NASDAQ: CHTR), Comcast (NASDAQ: CMCSA), Cox and Time Warner Cable that revealed there are 22 times more Ethernet-capable locations than the data on which the FCC based its May 2 further notice of proposed rulemaking (FNPRM).

For more:
- see this blog post
- see this Verizon FCC filing (PDF)

Related articles:
Level 3: Verizon/Incompas proposal will help the FCC establish a sound business data services regulatory regime
AT&T, CenturyLink slam Verizon/Incompas special access pact
Verizon, Incompas propose new 8-point special access plan, encourage facilities-based competition

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