AT&T says CLECs misunderstand special access terms, rates

AT&T (NYSE: T) has responded to the FCC's investigation of its special access pricing regime, saying that competitive service providers' allegations that it locks-in certain volume-related commitments are false.

Echoing similar claims made by fellow ILECs CenturyLink (NYSE: CTL) and Verizon (NYSE: VZ), AT&T maintains in a new FCC filing that CLECs have plenty of choices when it comes to special access circuits, including cable operators.

"Special access customers today can and do choose from a wide array of options, most of which they can obtain from multiple providers," AT&T said. "These include Ethernet services, unbundled network elements, DS3 and optical services. AT&T's legacy TDM DS1 services, at issue here, are merely one such option, and a rapidly declining one at that."

AT&T refutes claims that CLECs have to pay volume commitments to obtain special access discount plans, saying that no "volume commitments are required to obtain these discounts."

The telco added that the term plans offered by AT&T in each of its wireline regions have various time durations, ranging from 1 year to a maximum of five to seven years.

Competitors like Level 3, which have to rent last mile circuits to fulfill multi-site business customer contracts where they do not have fiber, say that the lock-up concept requires them to commit to long-term purchases of incumbents' special access services.

CLECs claim they have no other option but to take service under four DS1 tariffs because of AT&T's "overwhelming control of the special access marketplace."

In an earlier FCC filing, Level 3 said that the ILECs' practice has three effects on their competitors: it stifles competition, slows fiber deployments, and inhibits the transition from TDM-based DSn services to Ethernet.

AT&T called out Level 3 in its filing, saying that it has become one of the largest Ethernet providers in the U.S., according to Vertical Systems Group's U.S. Ethernet Leaderboard.

"Indeed, there are eight providers with port shares of 5 percent or more, including two CLECs, and three of the nation's largest cable companies," AT&T said. "Further, one of the loudest complainers in this proceeding, Level 3, is the second largest Ethernet provider in the U.S. measured by port share,28 and Comcast, which was recently named the fastest growing Ethernet provider for the second consecutive year, is said by analysts to be "well positioned in 2015 due to its extensive fiber network footprint."

For more:
- see AT&T's FCC filing (PDF)

Related articles:
Level 3's Storey: Lock-up agreements are stalling company's growth
Level 3: Freeing CLECs from ILEC lock-up plans for special access can spur $86M revenue boost
AT&T, Verizon, CenturyLink special access pricing practices face new FCC investigation
Verizon joins ILEC chorus against special access, saying Ethernet services should not be regulated
INCOMPAS, CCA oppose USTelecom, ILEC request to extend special access review

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