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Bas Burger, the president of British Telecom in the Americas, wants to see the special access market regulated as a way to end the negative effects of the effective monopoly held by AT&T and Verizon in the U.S.
Special access is communication that includes data and voice used by enterprises, carriers and others to connect one point to another. For example, a cell carrier would use special access to connect a cell tower with the central office where calls are routed.
In a Dec. 1 interview with eWEEK, Burger said that his company is facing a number of challenges related to providing broadband communications to his customers. He said that those problems include high prices and difficulty in providing reliable service between BT’s customers and its global backbone network.
However, BT is hardly the only company complaining about the way special access is handled. Communications providers ranging from Earthlink to Sprint have filed complaints with the Federal Communications Commission claiming that the companies providing special access in the U.S., AT&T, and Verizon, are levying excessive charges, failing to provide the service they need and are using their position in the market to keep modern technologies from taking hold as they would if the monopoly didn’t exist.
“Availability is one problem,” Burger said. “Competitive pricing is another.” Burger contends that AT&T and Verizon are manipulating pricing to discourage the move to Ethernet for most companies.
“The issue is that most of our clients are buying bandwidth at 1 to 1.5M bps. Our customers want to move to Ethernet, but at lower bandwidth it’s hard to do it.” The reason, he explained, is that AT&T and Verizon are charging five or six times what it should cost for companies to move from legacy TDM (time division multiplexing) networks such as T1, including faster lines using similar technology.
Currently, the operators of those networks are making profits on the order of 100 percent on the cost. According to Burger, this high cost is discouraging a move to newer network technologies, including Ethernet. Burger said that he wants to see regulation of these networks to improve reliability and to reduce prices.
The question of special access regulation is already being examined by the FCC. The agency sent out a data request in 2013 to examine the pricing and delivery of special access networks. The data collection will end at the end of Jan. 2015, a date that was extended from the first deadline of Dec. 15, 2014.
British Telecom Calls on FCC to Regulate Broadband ‘Special Access’
Once the FCC has the data, it can then make a decision as to the regulation of this part of the network.
This isn’t the first time that the FCC has studied the issue. Public Knowledge addressed the problem in 2009, and noted at the time that special access was the domain of the three remaining parts of the old Bell system.
Things have changed since then as AT&T went from being simply a long distance and cell provider to being one of the carriers after it acquired SBC and Bell South. What’s interesting is that when the FCC began to deregulate special access in 2000, AT&T was one of the companies fighting it.
Since then the Government Accountability Office has determined that the special access market is not competitive and has effectively become a monopoly shared between AT&T and Verizon, who between them control 90 percent of the market.
The result of the concentration in the special access market is that costs are much higher than they need to be and there’s little accountability because there’s no competition.
A company that needs a fast data network, such as a bank that needs access for its ATM network, can’t just go to another carrier because there are no other carriers besides the two dominant providers who don’t offer competitive pricing and service terms.
Burger said that while special access doesn’t have a direct effect on most smaller companies, it does have a direct effect on broadband adoption because it raises the price, especially for smaller users that might not need massive amounts of bandwidth. “If you have lower prices for lower bandwidth, then adoption for broadband services will go up,” Burger said.
Burger noted that BT is a member of the No Choke Point Coalition, a group of carriers, mobile phone companies and advocacy groups that are working to get the FCC to regulate special access again. BT looks to its global experience implementing Ethernet and other services for an indication as to how broadband adoption is being delayed in the U.S.
He said that even incumbent carriers are moving to adopt Ethernet in the UK, where the penetration of Ethernet in the special access market exceeds 50 percent. He said that in the U.S. it’s still below 25 percent because of the deregulated market.
“They’ve extended the date until the 29th of January,” Burger said. “By then the FCC will have a lot of data to determine whether special access reform is needed.” After that, “We hope they will come to some quick conclusions,” he said.
Once the FCC has the data, it can then make a decision as to the regulation of this part of the network.