FCC moves forward with special access reforms, marking a win for T-Mobile and Sprint

A divided FCC voted to move forward with reforms of so-called "special access" lines, marking a big win for T-Mobile and Sprint and perhaps forestalling price hikes as 5G networks eventually come online.

The Commission voted 3-2 along party lines to approve an order prohibiting ILECs (incumbent local exchange carriers) such as Verizon and AT&T from charging early termination fees from T-Mobile, Sprint, or other major users of fixed-line services. The order also bars "demand lock-up contracts" that prevent customers from seeking alternative sources for such connectivity, and calls for the creation of a "new technology-neutral framework" that would extend regulations in markets deemed uncompetitive.

Special access accounts for roughly $25 billion of the $40 billion market for business data services, in which fixed-line telecoms transmit vast amounts of data for wireless service providers as well as ATMs, banks, hospitals, manufacturers and others. Special access also plays a huge role in wireless backhaul, bridging mobile networks with fixed-line infrastructures.

"Business data services are critical in the day-to-day life of consumers, business and industry, and are integral to the competitiveness of the U.S. economy as a whole in the information age," the Commission said in a press release. "Yet data collected by the FCC shows that competition in this essential market is uneven, and that the FCC's existing rules have failed to identify markets where competition is lacking, even as they have failed to identify competitive markets."

The FCC specifically called out AT&T, Verizon, CenturyLink and Frontier, saying an investigation had found "certain terms and conditions" to be unjust and unreasonable and had the effect of decreasing competition and slowing the transition to new technologies. "These companies will be required to withdraw the illegal terms of these tariffs and file new tariffs within 60 days of release of the Order," the Commission wrote.

And the FCC noted that demand for special access "will grow exponentially" as 5G services come online, boosting consumption of everything from mobile video to IoT-centric data. So the Commission hopes to craft rules and policies designed to remove barriers to the transition to new technologies and meet the needs of "tomorrow's marketplace."

The three Democratic Commissioners voted to approve the reforms, while the two Republicans questioned the need for the FCC to intervene. The FCC will seek public comment before a final vote is held.

For more:
- see this FCC press release

Related articles:
Sprint disses ILECs' inflated special access costs as FCC completes comment period
Sprint says it will cut $1B in backhaul costs by transitioning to microwave
AT&T says CLECs misunderstand special access terms, rates
AT&T joins ILEC chorus on copper retirement, says competitors have enough notice

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