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The $10 billion fight over phone lines rages on
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02/02/10 09:01 AM ET
Today is Groundhog Day, and a coalition of consumer groups, big businesses and a few broadband providers are using the occasion to send a message to the FCC: don't wait another year to change the rules governing access to telephone lines.
The members of the NoChokePoints Coalition have been asking the FCC for years to lower "special access" charges, or the fees smaller phone companies and cell phone carriers to pay to lease access on the major backbone networks operated by AT&T, Verizon and Qwest.
Coalition members, including Sprint Nextel, T-Mobile, universities, major banks and corporations say they pay $10 billion a year--or $27 million a day--in overcharges to lease access on the major phone companies' networks. And they say they have to pass those costs onto their customers.
"Every year, the Punxsatawney Phil of special access has seen its shadow as past FCC's have determined not to act," said Maura Corbett, spokeswoman for the coalition. "But with a new FCC, special access will not see its shadow this year, as the Commission has made special access reform a priority."
The FCC has asked for public input about whether the current special access rules are working.
AT&T and Verizon own the largest phone networks in the country. They often own the only lines that deliver service to big office buildings, apartment complexes and cell phone towers. So smaller competitors must lease access to those lines to provide their own services.
The major phone companies say their rates are fair and that there is plenty of competition in the market. AT&T and Verizon point out that new fiber networks are rapidly replacing their old copper ones, so competition is intense.
They warn the FCC that imposing price caps could impede their abilities to build out bigger fiber networks to reach more consumers.
A group of big firms, from insurance companies to car manufacturers, disagree. The Ad Hoc Telecommunications Users Committee says its members spend $2 to $3 billion every year purchasing communications products and services, an expense second only to health-care costs.
The committee has been pushing the FCC for the past nine years to intervene, saying lower telecom prices will allow them to use that money for creating new jobs or investing in their broadband services.
The members of the NoChokePoints Coalition have been asking the FCC for years to lower "special access" charges, or the fees smaller phone companies and cell phone carriers to pay to lease access on the major backbone networks operated by AT&T, Verizon and Qwest.
Coalition members, including Sprint Nextel, T-Mobile, universities, major banks and corporations say they pay $10 billion a year--or $27 million a day--in overcharges to lease access on the major phone companies' networks. And they say they have to pass those costs onto their customers.
"Every year, the Punxsatawney Phil of special access has seen its shadow as past FCC's have determined not to act," said Maura Corbett, spokeswoman for the coalition. "But with a new FCC, special access will not see its shadow this year, as the Commission has made special access reform a priority."
The FCC has asked for public input about whether the current special access rules are working.
AT&T and Verizon own the largest phone networks in the country. They often own the only lines that deliver service to big office buildings, apartment complexes and cell phone towers. So smaller competitors must lease access to those lines to provide their own services.
The major phone companies say their rates are fair and that there is plenty of competition in the market. AT&T and Verizon point out that new fiber networks are rapidly replacing their old copper ones, so competition is intense.
They warn the FCC that imposing price caps could impede their abilities to build out bigger fiber networks to reach more consumers.
A group of big firms, from insurance companies to car manufacturers, disagree. The Ad Hoc Telecommunications Users Committee says its members spend $2 to $3 billion every year purchasing communications products and services, an expense second only to health-care costs.
The committee has been pushing the FCC for the past nine years to intervene, saying lower telecom prices will allow them to use that money for creating new jobs or investing in their broadband services.
"We thank the FCC for taking this issue out of the shadows and into where it belongs--a functioning, open and competitive market," Corbett said.
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