June 22, 2009, 8:41 PM — A group of public interest groups and regional telecom carriers has launched a new campaign to reform the fees paid to large telecom carriers for so-called special access to large-pipe connections between buildings and central switching facilities.
The new NoChokePoints coalition, launched Monday, has nearly 20 members, including Public Knowledge, Sprint Nextel, TW Telecom and the New America Foundation. The groups called on the U.S. Federal Communications Commission to reform the fee structure for special access to those large-capacity pipes owned by large carriers such as Verizon Communications and AT&T.
Reasonable special access rates are critical to broadband deployment across the U.S., members of the coalition said.
"Releasing the broadband economy from the chokehold these huge phone companies have on the special access market will be a catalyst for innovation and investment in the broadband marketplace, something we desperately need," Maura Corbett, spokeswoman for the coalition, said in a statement. "Every time you send an e-mail, withdraw money from an ATM, or use your wireless phone, your information travels on these high-capacity lines. Excessive pricing and other market abuses by these companies have long been an issue of concern at the Federal Communications Commission."
U.S. President Barack Obama, plus members of Congress and the FCC, have made broadband deployment a top priority, Corbett noted in a news release. "Frankly, it defies explanation that we are still fighting this market abuse," she said. "Huge companies like Verizon and AT&T control the broadband lines of almost every business in the United States."
USTelecom, a trade group representing large carriers, disputed the need for major changes in special access fees.
"These are the same old tired and discredited arguments we've heard for years, simply wrapped up in a new package," Walter McCormick Jr., president and CEO of USTelecom, said in a statement. "Most of this market remains under price controls. Those regulations have only been lifted where the FCC has determined there is adequate competition."
Verizon has an average of nine fiber competitors in each of its top 25 markets, and prices are falling for many AT&T customers, USTelecom said. The trade group also accused competitive telecom carriers of refusing to release market data to support their calls for special access reform.
But changes to special access would increase competition, said Ken Folderauer, public sector vice president at TW Telecom, a managed network services provider.
"In the current regulatory environment, policies often keep us from serving all of our customer's locations," he said in e-mailed comments. "Why? Because it's either too expensive for us to build our network to a remote location or we cannot purchase wholesale Ethernet services from the incumbent provider, either due to a lack of availability or because the incumbent carrier has prohibitive pricing."
The pricing leaves customers to "rely on antiquated ... solutions from the incumbent carrier -- ultimately the consumer loses the ability to access new and innovative solutions that only Ethernet delivers, and we lose the opportunity to grow our business," he added.