Windstream has told the FCC that AT&T's IP transition will hurt small and medium businesses if large telco providers are allowed to raise rates for last mile network services.
Like other providers, Windstream is a supporter of IP-based services such as Ethernet. However, its concern is that if AT&T (NYSE: T) or Verizon (NYSE: VZ) charges higher rates for the new services, small businesses with limited budgets, like the University of Arkansas Medical Service, would have to move more of their capital away from their core business and into paying higher prices for telecom services.
"Business consumers--including the small- and medium-sized businesses that drive economic growth and job creation, state and local governments, schools and non-profit health care providers--will be hurt significantly if the IP transition deprives them of their choice of integrated communications solutions because the large incumbent LECs can raise prices for critical last-mile transmission, whether Ethernet or unbundled DS1/DS3 capacity loops," wrote Windstream in its filing. "For example, the public at large will not be well served if the University of Arkansas Medical Service ("UAMS") must divert more of its limited telemedicine budget toward telecommunications costs, and away from delivering medical services to Arkansas' rural communities."
While Windstream has built out a large fiber network of its own, including those that serve UAMS, it still has to rely on renting last mile copper-based wholesale services from providers like AT&T to connect to multi-site businesses that reside outside of its traditional ILEC territory. The service provider also can't realistically replicate the same facilities of the ILEC's network for every customer request.
But UAMS is only one end user that could be affected if ILECs were able to raise wholesale special access rates. A number of SMBs, including non-profit agencies, that lack the IT staff and budgets could also suffer similar harm.
"Other small- and medium-sized entities similarly will be harmed if AT&T or other large incumbent LECs can use the conversion to IP as an excuse to raise prices for special access services that competing providers today use to provide an alternative to the large incumbent LEC's services," wrote Windstream.
In its filing, the service provider has asked the FCC to enact reform and grant its Petition for Declaratory Ruling regarding the continued availability of unbundled DS1 and DS3 capacity loops after an incumbent local exchange carrier makes an IP or fiber transition.
Windstream wrote that "both of these actions are necessary merely to ensure that competitive carriers can migrate their customers from TDM to IP connectivity without incurring significant price hikes to attain comparable capacity."
The FCC, for its part, is taking up these issues with Chairman Wheeler setting forth a number of proposals that are designed to protect consumers and promote competition during the IP transition, including protections for consumers in last mile access and copper retirement. These issues will be further addressed at the FCC's Open Meeting on Aug. 6.
- see this FCC filing
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