Creating a More Competitive Broadband Economy: A Timeline
The FCC began examining problems with dedicated broadband access service over ten years ago. The FCC has recognized that addressing this problem is a critical element to creating a healthy broadband economy. However, the largest carriers – AT&T and Verizon – have fought hard to preserve their monopoly powers. These carriers know their control of these broadband access lines gives them the ability to control both the wired and wireless markets. Without intervention from the Federal Communications Commission (FCC), Americans are stuck suffering from the consequences of this non-competitive marketplace. These are the roads that connect the broadband economy and the incumbent’s own the tollbooth.
This timeline explores the regulatory attempts of more than a decade to rein in the huge broadband gatekeepers that have grown so dominant that they easily snuff out any potential competition.
The FCC reforms its rules to rely on competition to bring about cost-based pricing for high-capacity broadband lines.
AT&T files a petition for rulemaking that begins: “The FCC has been duped.” AT&T explains that the dedicated broadband access service market is anticompetitive and enables the largest carriers impose unjust, unreasonable and discriminatory charges for this service. AT&T asks the FCC to impose regulations to protect customers and curb this behavior.
The FCC commences a broad examination into the competitive state of the dedicated broadband access market and the regulatory framework that should apply to the carriers that provide this service.
GAO finds that “in the 16 major metropolitan areas we examined, facilities-based competition for dedicated access services exists in a relatively small subset of buildings.” GAO recommended that the FCC better define effective competition and consider additional data to measure/monitor competition.
The FCC asks interested parties to refresh the record on the dedicated broadband access market to reflect developments including industry mergers and consolidation.
A study by Economics and Technology, Inc. (ETI) finds that special access prices continued to be excessive and unreasonable without regulatory or market constraints. This impact extends beyond the telecommunications industry. ETI projects that overpricing will cost the U.S. economy $17 billion and 95,000 jobs in 2007 — a figure expected to escalate over time.
A group of high-volume purchasers of these services – Ad Hoc Telecommunications Users Committee – files comments with the FCC noting that there is no meaningful competition in special access markets, prices have increased in pricing flexibility areas and the pricing flexibility rules, particularly the competitive “triggers,” are fundamentally flawed.
The National Regulatory Research Institute releases a report on the Competitive Issues in Special Access Markets which was commissioned by the National Association of Regulatory Commissioners. The study summarizes data from 2007 and 2008 that had been submitted by buyers and sellers of dedicated broadband access service and finds that the major carriers have strong market power in most geographic areas.
Free Press issues paper discussing the impact of deregulation on broadband penetration, speed and prices.
A chorus of voices representing educational users, consumer groups, competitive wireline broadband carriers, competitive wireless carriers and high-volume purchasers of high-capacity broadband lines calls on the FCC for reform in the business broadband market. These included: ACUTA: The Association for Information Communications Technology Professionals in Higher Education; Ad Hoc Telecommunications Users; BT; Media Access Project; Public Knowledge; tw telecom; Sprint; One Communications; XO Communications
The group, and others, urges the FCC to gather the data it needs to reform the market.
The FCC opens up a public comment period seeking information on the issue of high prices and a lack of availability for middle mile and backhaul access for wired and wireless broadband providers. The FCC plans to use this information to help develop a national broadband plan that will lay out the framework to increase access to broadband and competitive choice throughout the country.
The FCC asks interested parties to weigh in on the appropriate analytical framework for examining the issues in the dedicated broadband access market.
The condition the FCC imposed in the AT&T/BellSouth merger order requiring AT&T to reduce its prices for dedicated broadband access service expires allowing AT&T to increase rates for this service.
The FCC adopts a National Broadband Plan which recognizes, among other things, the significant role that dedicated broadband access lines play in the availability and pricing broadband services and recommends that the FCC take steps to ensure that the rates, terms and conditions for dedicated broadband access service are just and reasonable.
AT&T announces a rate hike on dedicated broadband access services.
GAO again recommends that the FCC should expand its data collection to better review market conditions and competition for broadband service, including high-capacity broadband lines.
The FCC invites the public to voluntarily submit data regarding dedicated broadband access service to help the FCC evaluate the appropriate analytical framework it should use to evaluate the market.
A study for the U.S. Small Business Administration finds broadband providers were not fully providing sufficient broadband access to rural small businesses. The data from the study indicated that rural respondents may have been paying more for slower service.
House Energy and Commerce Chairman Henry Waxman (D-CA) joined the Government Accountability Office (GAO) in urging the FCC to act quickly on the now multi-year special access proceeding and address the obvious harms to competition, consumers and the broadband economy. He noted, “[…] pro-competitive policies in the special access market are essential to maximize choice, affordability and technological innovation in the wireless market.”
An economic study filed with the FCC conservatively estimates that reform of the dedicated broadband access market would increase national output by as much as $37.7 billion and create as many as 176,000 new jobs across the U.S. economy, seventy percent of them in industries that rely on these connections to run their businesses.
The FCC asks parties to update the voluntary data submissions regarding the market for dedicated broadband access service that the FCC had requested in October 2010.
Reps. Doyle and Eshoo send a letter to FCC Chairman Genachowski urging reform in the business broadband market.
Reps. Eshoo, Waxman, Markey, Doyle and Matsui send a letter to the FCC urging the Commission to analyze the data it has collected and take action to remedy anti-competitive behavior in the market.
Verizon raises its prices for high-capacity dedicated broadband access lines by 6 percent across the board. Numerous customers seek relief from the FCC from the exorbitant, anti-competitive price increases. Verizon withdraws its price increase.
The FCC temporarily suspends its rules for dedicated broadband access service because of “widespread agreement across industry sectors that these rules fail to accurately reflect competition in today’s special access markets.”
The FCC issues a mandatory data request, requiring those providing and those using dedicated broadband access pipelines to submit data, information and documents for a comprehensive evaluation of competition in the dedicated broadband access market.
An economic study by S. M. Gately Consulting (SMGC) examining the potential economic gains from an increase in broadband competition is released. The study finds reform of the dedicated broadband access market would increase network investment by $150 billion per year produce approximately 850 million man years of employment by the end of 2017.
The FCC streamlines its initial Report and Order Data Request on the competitive conditions in the dedicated broadband access market and provides instructions and specifications for submitting data.
AT&T petitions the FCC to raise its prices on high-capacity dedicated broadband access lines. In November the FCC also submitted a request to collect data on the competitive conditions in the dedicated broadband access market to OMB for approval.
Members of Congress – Sen. Markey and Reps. Doyle, Eshoo and Matsui – call on the FCC to investigate AT&T’s proposed rate hikes on high capacity dedicated broadband access lines. The Small Business Administration also express concerns about AT&T’s proposed price increase.
OMB approves the FCC’s request to collect data on the competitive conditions in the dedicated broadband access market.
January – February 2015
Providers and purchasers submit data to the FCC on the competitive conditions in the dedicated broadband access market.
U.S. Small Business Administration recognizes the threat posed by a lack of broadband competition available to American businesses and sends a letter to the FCC urging reform.
FCC Chairman Tom Wheeler speaks at the CTIA Super Mobility 2015 Conference about the FCC’s review of the dedicated broadband access market saying: “It’s something that we are on course and speed to review because it is key to competition. It is key to increase throughput and it is key to the increase coverage that this industry promises.”