Verizon's Silliman: Special access regulation should encourage competition for buyers, sellers

DALLAS -- Verizon (NYSE: VZ) took a different path from its ILEC brethren in the special access market segment when it developed a proposal with Incompas have to regulate special access services.

Under the plan that was devised in April, the pair came up with three main elements: Technology neutral regulatory framework; Complying with Title II of the Communications Act; and Technology-neutral price regulation.

At that time, Verizon and Incompas said that there should be a relationship between wholesale and retail pricing for all dedicated services, including TDM-based special access services and packet-based services such as Ethernet.

Craig Silliman, EVP of Public Policy and general counsel for Verizon, told FierceTelecom during the TIA 2016 trade show here that it set a goal that would give it benefits as both a seller and buyer of special access services to satisfy its business customers.

"We want to step back and put in place a regime that says, 'we want to regulate on a level playing field basis across providers and technologies based on an analysis of if there's competition and if there's less competition there will be a lighter touch regime and if there's less competition then you'll have more regulation,'" Silliman said. "We sat down with Incompas and said 'we should come together and support a regime that makes sense, is future proofed and it's not all based on different providers that have different technologies and different rules."

Silliman said Verizon wanted to gain a regulatory regime for special access that will give it benefits as both a buyer and a seller.

To get there, there needs to be a clear understanding of where there is and isn't effective competition and if there isn't enough the FCC could adopt some form of regulation.  

"The other question is how do you measure competition, but for us it felt like good policy and we should get behind it even though it meant giving up potentially some areas where we were beneficially treated," Silliman said. "We looked at it and said we can't just argue for policy based on where we sell, but we also look at it where we buy and that's how we got to it."

As more service providers and their business customers migrate off of legacy copper-based data services, the next question is how the new rules will apply to IP/Ethernet services.

Silliman said that the FCC should also look at how competitive a market is for Ethernet services and ensure that new entrants like CLECs and cable operators can thrive and offer options.

"If the FCC sets up the regime properly, you're going to recognize that competition and you're not going to regulate in those areas," Silliman said. "We certainly don't want heavy handed regulation on markets that are competitive, but the coherent way to do that is look at if the market is competitive and not say we'll use these categories of providers who are by definition are regulated or not regulated."

Similar to purchasing legacy special access services to fulfill out of region requests from its business customers, Verizon also wants to have more choices for Ethernet.

"Even as a buyer of services, we don't want to discourage new entrants coming in building in areas where there isn't competition," Silliman said. "Our goal as a buyer is, we want as much competition as possible, so we want in those areas to set up a regime that encourages competition to come in and overbuild and you can lift the regulatory regime."

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