COMPTEL advocates for special access reform to promote broadband competition

Competitive carriers organization COMPTEL says the FCC's special access reform needs to address that their measures should drive new competition in the wireline and wireless broadband industry segments.

Despite seeing CLECs making investments in their own networks, the industry organization wrote that wireline network providers still need to use special access circuits in areas where they can't immediately justify building out their own facilities to serve their business customers.

Echoing comments recently made by Level 3, Birch and BT, COMPTEL said the FCC needs to address the way the ILECs charge for special access services. In a letter to the FCC, the three service providers said the FCC has "broad discretion" to regulate traditional TDM special access and IP-based services like Ethernet.

"In order to ensure competition -- and consequently growth and innovation -- in the broadband market, the Commission must address the unjust and unreasonable rates, terms and conditions the incumbents impose on purchasers of special access services," said COMPTEL in a filing. "Special access services are inherently critical to the broadband market because only the incumbent has the ubiquitous networks that reach virtually all business locations. Competitors, on the other hand, would have to duplicate the entire ILEC network."

Having access to competitively priced ILEC facilities enables competitive carriers to enhance their reach.

"Without the ability to supplement their reach, competitors' incentive to build their own network where economical would be diminished," COMPTEL said.

One of the key issues that has caused continual debate between ILECs and CLECs is how they will price IP-based services at a higher rate than TDM.

In a letter to the FCC, Level 3 said that incumbent local exchange carriers' demand lock-up plans for DSn-based special access services could a number of harmful effects on competitive carriers. By easing restrictions on who they buy bandwidth from could boost competitive carriers' revenues by as much as $86 million combined.

XO Communications said it faced a similar situation. The competitive carrier said that the shortfall penalties ILECs impose on them for special access services had a "chilling effect" on its fiber deployment plans. As a result, it could build out fiber to certain building locations that met its business case criteria.

COMPTEL said that "the Commission must address the anticompetitive lock-up agreements of the ILECs and complete its special access proceeding expeditiously in order to remedy the unreasonable rates they charge." By doing this, the FCC would be able to "unleash broadband deployment for competitive wireline and wireless networks that serve both residential and business customers."

Perhaps not surprisingly, AT&T (NYSE: T) and Verizon (NYSE: VZ) said in FCC filings say that the FCC can't overturn the forbearance on IP-based Ethernet service regulation.

For more:
- see this FCC filing (PDF)

Related articles:
Verizon joins ILEC chorus against special access, saying Ethernet services should not be regulated
AT&T says TDM, IP-based special access competition from cable, CLEC is rising
Level 3: Freeing CLECs from ILEC lock-up plans for special access can spur $86M revenue boost