Yesterday, just after I left on a trip (naturally), the FCC made a very important but still inconclusive regulatory move. In a party line 3-2 vote, the agency suspended the rules passed in 1999 that allowed incumbent providers flexibility in special access pricing.
Competitive providers have long complained that the competitiveness of the special market was being overstated, with competitive fiber-fed buildings vastly smaller than those of the incumbents. Pricing flexibility therefore has not been doing the job that it was intended for, and has led to less compeitition not more.
This is most obvious these days in the wireless backhaul market, in which Sprint and T-Mobile are at the mercy of their competitors AT&T and Verizon when it comes to backhaul, whether the latter two are taking advantage of the situtation or not.
For its part, Verizon says the FCC should have done more research first – kick the can down the road another year or two as usual. Now the shoe will be on the other foot, as the FCC will do more research second – and perhaps keep the new status quo until it is done. You know, another 13 years later or something like this past interlude.
The independent metro fiber business has been growing rapidly but is still a long ways from making a truly competitive market. That’s why tw telecom is cheering the decision, as their own extensive fiber footprint still leaves them dependent on off-net service from the incumbents to serve enterprises nationally even when they add 500 buildings a quarter. BT also responded positively, as they also serve US customers via others assets and find the market distorted.
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