FCC Puts Five-Month Moratorium on AT&T ‘Special Access’ Rate Hike Plan

The Federal Communications Commission (FCC) has put the brakes on a plan by AT&T to raise prices for "special access" customers, which could have led to a rate hike to businesses and cell phone users. AT&T had planned to make that hike happen today, but the FCC stepped in and suspended the action for five months while it conducts an investigation on the matter.

"There are substantial questions regarding the lawfulness of AT&T’s tariff revisions that require further investigation," the FCC said. This move does not prevent the price increase in perpetuity but makes it possible that the FCC could at least soften the blow a bit. In case you don't know "special access" is what AT&T, Verizon, and CenturyLink charge other businesses for Internet bandwidth. Special access customers include Sprint and T-Mobile, who have to rely on their rivals' for bandwidth. Because of this price hike, the extra charges could potentially affect non-AT&T customers directly.

In a blog post on Nov. 25, AT&T said it planned to make the price change effective on Dec. 10. "[W]e have taken a step to make sure that multi-year commitments we enter into today for aging TDM-based services reflect the ongoing transition to IP and do not extend beyond the expected completion of our transition in 2020," AT&T said.

Sprint called the move anti-competitive and complained to the FCC, along with other competing service providers and telecommunications companies such as TW Telecom, EarthLink, XO Communications, and Level 3. Several members of Congress also lobbied the FCC on the issue. The US Small Business Administration Office of Advocacy raised a red flag as well.

"AT&T has cited its desire to move its customers to Internet Protocol (IP) based services as its rationale for discontinuing its discounted contracts for special access," the office said in an FCC filling. "In effect, AT&T is proposing to shift demand toward more expensive IP-based offerings by artificially increasing the price of its TDM services. Without discounted contracts, purchasers of special access will be forced to pay higher rates for TDM services, and the increased costs will inevitably be passed on to consumers. While the evolution to an all-IP network is something for small business consumers to look forward to, it should not be financed through artificial price increases in the special access market."

AT&T's response to all this? Its special access customers and critics are simply confused.

The FCC said in its decision yesterday that "AT&T responds to Petitioners’ arguments by asserting that they largely reflect confusion over the purpose of the tariff revisions and how the sunset of the five- and seven-year term plans will actually operate. AT&T argues that the mere elimination of a discount plan cannot violate section 201(b) because that section does not obligate AT&T to maintain any specific type of discount plan. AT&T asserts next that this tariff proceeding is not a proper forum for Petitioners to challenge the reasonableness of the rates that would remain following the proposed eliminations of discount plans. AT&T further disputes that this filing is a restructured service since AT&T’s tariff revision does not replace any existing service or option. Finally, AT&T argues that the Petitioners that cited concerns about how these revisions would impact specific contract tariffs misunderstand how these provisions would work."

Ultimately no one familiar with the situation believes that this decision by the FCC does anything more than delay the inevitable rate hike, but some think that the FCC can at least soften the blow by throwing some requirements or conditions AT&T's way.

You can read the full FCC decision here (PDF).

Source: Ars Technica

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