Gigabit speed presents special-access conundrum, Level 3 says

Level 3 Communications may be one of the most aggressive providers rolling out fiber to deliver a host of Ethernet and cloud services, but being a competitive provider it can't bring fiber into every building that wants service.

As the FCC gets ready to rule on a new NPRM related to special access services on Thursday, Level 3 has told the regulator that business data services that surpass 50 Mbps of capacity is a sign of "effective competition."

In a FCC filing, Level 3 said that it can't always build a business case to extend fiber to a business customers' location even if it's close to its fiber network. This is due to a number of factors, including distance from its nearest fiber network point and the amount of bandwidth a customer is requesting.

"The costs of deploying loops are distance sensitive, and per-foot costs vary substantially from area to area," Level 3 said in the filing. "Nevertheless, Level 3 could not typically justify deploying a new loop to a potential customer seeking to purchase dedicated capacity located even just 100 feet from a splice point on Level 3's fiber transport network unless the customer purchases a connection of a capacity that is significantly greater than 50 Mbps, such as 1 Gbps or more."

What this potentially means is that it can't justify digging up a city or town's streets to extend fiber to either a branch office of a multisite or single-site business customer that only needs a 10 or 50 Mbps connection.

In cases where it can't justify building out fiber directly to a customer, Level 3 and other competitive carriers have to purchase last mile circuits from a local incumbent like AT&T (NYSE: T). To ensure greater fairness in purchasing special access circuits from incumbents, Level 3 has also asked the FCC to create rules that allow service providers to "choose the size of the volume commitments they make under the incumbent LECs' harmful volume and term plans." also known as lock-up plans.

The service provider said that such a "policy will lower barriers to competition much more quickly if customers are given "fresh look" rights under their existing plans and overlay agreements while enabling "customers to enter into new purchase arrangements with incumbent LECs so that they can increase the volume of BDS they purchase from competitive wholesalers."

For more:
- see the FCC filing (PDF)

Related articles:
Level 3, Birch and BT Americas say FCC has power to regulate ILEC special access rates
Level 3: Freeing CLECs from ILEC lock-up plans for special access can spur $86M revenue boost

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