Verizon defends special access discounts for wholesale customers

Verizon (NYSE: VZ) is fighting claims that it is overcharging its wholesale customers for its TDM and IP-based special access services.

In an FCC filing, Verizon said that a recent joint letter filed by BT, Birch and Level 3 does not offer any new evidence that its pricing plans are harmful.

"Verizon has explained that its voluntary discount plans reflect economic efficiencies and offer customers a variety of choices, and we have debunked the recycled mischaracterizations of the plans," Verizon said in an FCC filing. "We've explained that Verizon's discount plans benefit both customers and Verizon. The plans offer customers significant discounts in exchange for term or term-and-volume commitments, and they enhance efficiencies and reduce transaction costs and risk for both the buyer and the seller."

Level 3 said in a subsequent filing that the ILECs' demand lock-up plans for DSn-based special access services will have a number of harmful effects on competitive carriers. 

According to Level 3, these demand lock-up plans require wholesale buyers like Level 3 and other competitive local exchange carriers (CLECs) to commit to long-term purchases of incumbents' special access services.

The competitive carrier said that this practice has three effects on their competitors: it stifles competition, slows fiber deployments, and inhibits the transition from TDM-based DSn services to Ethernet.

Verizon refuted those claims, saying that its "discount plans do not link discounts to commitments to purchase from Verizon a percentage of the customer's total purchases from all sources" and that it "offers customers a range of options when their voluntary discounts expire, including migrating some or all of their circuits away from Verizon."

Now that the FCC is moving forward with making industry data it collected from 2013 on special access available for public review, Verizon said that the "Commission therefore should focus its efforts on the market analysis and allow the parties to do the same, without the burden and distraction of premature activity related to discount plans."

For more:
- see the FCC filing (PDF)

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