Making Sausage

Sprint Presses for Cheaper Access to Broadband Linespdf

The dispute centers on the high-capacity fiber-optic lines that provide huge volumes of phone and Internet connections to businesses. The largest telecom companies — AT&T, Verizon and Qwest Communications — have networks that reach most buildings, and competitors such as XO Communications and Level 3 Communications often lease capacity on those lines to serve their customers. Wireless companies including Sprint and T-Mobile also use the capacity to connect calls to their cellphone towers.

But these competitors, led by Sprint, say the giants charge too much for access to the high-capacity lines and want the FCC to more tightly regulate the prices. Sprint says its access fees have risen sharply in recent years. AT&T, Verizon and Qwest argue that their prices are reasonable and that they should not be regulated in markets that have sufficient competition.

[…] In an interview yesterday, McDowell acknowledged the difficulties of determining the extent of competition in certain markets.

“A lot of the fundamental facts are at loggerheads,” he said, noting that more detailed information might be needed. “It makes resolving this issue very challenging.”

[…] The Telecommunications Act of 1996 opened up the local phone market, allowing new competitors to lease part of the incumbent phone companies’ networks. In 1999, the FCC reduced those pricing requirements in markets where there was considered to be enough competition to hold down prices.

Since then, competition has suffered, said Rep. Edward Markey (D-Mass.), chairman of the House subcommittee looking into business broadband prices. He is pressuring the FCC to “recalibrate” regulations to promote competition, which he says will accelerate the deployment of broadband.

“There is a market failure here that’s putting our national broadband aspirations at risk,” he said.