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Carriers Want FCC to Address Wholesale Prices

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November 09, 2009

Carriers Want FCC to Address Wholesale Prices

By Gary Kim, Contributing Editor

Eight competitive communications providers and Comptel have asked the Federal Communications Commission to adopt rules that would lead to lower prices for broadband access and transport.
Comptel, 360networks, Broadview Networks, Cbeyond (News - Alert), Covad Communications, NuVox, PAETEC, Sprint Nextel and tw telecom have asked the FCC to create new procedures that would require the former Bell Operating Companies to offer wholesale access at going-forward rates, plus a “profit margin or markup” of about 22 percent.

For anybody but a communications attorney, the background is tedious and arcane. Put simply, when the former RBOCs were granted entry into the long distance market, they agree to offer wholesale access to their access networks by competitors, something the petitioners argue has not happened in a robust way.
Competitive providers can buy standard retail access products such as T1 loops, at standard retail prices, but that makes the business case difficult to impossible, the petitioners would argue, pointing to the Omaha, Neb. market, for example, where PAETEC (News - Alert) was forced to withdraw as it cannot make a business case when paying retail access rates for high-capacity access and transport.
PAETEC likely is not the only competitive provider who has found the Omaha market inhospitable after Qwest (News - Alert) was granted regulatory relief and was able to raise wholesale access prices about 30 percent.
Heated disputes between the former RBOCs and competitive local exchange carriers about wholesale pricing are anything but unusual. But it has been some time since competitive providers perceived a chance to change the existing order of things.
The perhaps unstated hope is that the forthcoming national broadband plan might address terms and conditions for mandatory wholesale access to optical broadband facilities owned by the former RBOCs, something competitive providers would dearly like to win, and which existing rules do not support.
Still, the petitioners do not expect immediate action, as the request has to be circulated for public comment, and will, as usual, face heated opposition from Qwest, AT&T and Verizon.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Erin Harrison

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