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AT&T, Verizon named in FCC probe into business Internet deals

AT&T, Verizon named in FCC probe into business Internet deals
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The Federal Communications Commission is launching an investigation into competition in the market for dedicated broadband connections sold to businesses.

Two of the companies being investigated are giants Verizon and AT&T, along with CenturyLink and Frontier.

At issue is how the four service providers handle so-called “special access” deals, through wich Internet providers sell dedicated connections to organizations that need to send or receive large quantities of data.

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Special access connections could be used by an ATM communicating with a bank’s central system, for example, or to connect a cell tower to a larger network.

Some companies like Sprint and Level 3 Communications have raised concerns about the deals, which they claim lock them into restrictive long-term agreements with the Internet providers.

Those terms can include lengthy contracts and hefty fees if they terminate the relationship early. Firms that make the agreements with the providers have alleged that the conditions have a chilling effect on competition in the marketplace.

The probe being conducted by the FCC's Wireline Competition Bureau will not examine pricing. Investigators are also examining only certain plans offered by the companies.

Verizon, AT&T, CenturyLink and Frontier now have two months to file their cases with the FCC, at which point others can file responses. The companies then get a chance to offer a rebuttal to the second round of comments.

If the agency decides to take action based on the findings of the investigation, it will have to be approved by a majority of the five commissioners.

AT&T said on Friday that its practices were not out of the ordinary.

“The terms the Commission is reviewing are commonplace in most commercial contracts and in fact are being used by our competitors in their own contracts,” said Frank Simone, AT&T’s Vice President of Federal Regulatory, in a statement.

“Each day the Commission wastes investigating and interfering in commercial agreements between companies that build infrastructure and those that do not is a day it is not encouraging fiber investment or looking boldly towards the benefits those investments will provide to consumers."

But others cheered the FCC’s decision to open an investigation.

Sprint said that for “the nation to realize the benefits of real choices and lower prices for broadband services, the FCC must take steps to address the stranglehold a few companies have on these basic inputs.”