Court lends an ear to complaints against FCC's efforts on special access reform

A coalition promoting the need for special access reform led by competitive local exchange carrier association Comptel is getting some serious attention from the D.C. Circuit Court of Appeals. The court this week issued an order asking for additional materials from the coalition, from the FCC and from the nation’s largest incumbent carriers—AT&T, CenturyLink and Verizon—which have the most to lose from any special access reforms.

The coalition in July filed a petition of mandamus to ask the court to direct the FCC to finish its 2005 special access reform rulemaking within six months. A petition for mandamus is a remedy in which a court directs an agency to take a certain action.

In October the D.C. Circuit Court asked the parties involved for more information—and according to a statement issued yesterday by the Media Access Project, that’s usually as far as it goes. This week’s order is “an unusual and important development,” Media Access Project’s Andrew Jay Schwartzman said in the statement.

In an interview this morning, Schwartzman said the next step is for the petitioners to file a brief to discuss the merits of their arguments, which will be reviewed by a panel of three judges, who have not yet been determined. The petitioners’ brief is due by January 13, with additional briefs from the FCC and the big ILECs due January 27 and February 3, respectively. Oral arguments will be scheduled some time after February 12, Schwartzman said.

“The petitioners would be allowed to talk and the FCC would be allowed to talk,” said Schwartzman. “The [ILECs] may or may not be allowed to talk.”

The special access issue

Special access has been a contentious topic since the service was deregulated in the late1990s. Competitive carriers, wireless carriers and small local carriers need high-capacity circuits to connect to long-distance networks and the Internet and often their only supplier is one of the major ILECs. According to the petition for mandamus filed by Comptel and other coalition members, the “dominant carriers” have been able to “charge inflated monopoly prices and impose anti-competitive terms and conditions on purchasers of special access.”

The petition has equally harsh words for the FCC. It argued that the commission “has failed to perform its core function of ensuring that the rules governing special access result in just and reasonable rates, terms and conditions, notwithstanding increasing evidence of the severe harms to competition, the national economy, and consumers resulting from the agency's inaction. The agency's continued delay has surpassed unreasonable.”

The ILECs’ and FCC’s response

In their response to petitioners’ charges, the large ILECs argued that there is competition in the special access market and that special access prices have come down since the service was deregulated.

The FCC in its response denied that it has unreasonably delayed taking action on special access, arguing that “issues cannot adequately be addressed until the Commission itself compiles an evidentiary record that is sufficient to evaluate current conditions in the special access market.” The commission also argues that it has “diligently sought to collect the data it needs” and that some parties have not produced information clearly documenting claims that special access rates are unreasonable.

The FCC noted that it has “broad discretion” to allocate its scarce resources by “prioritizing other pressing policy objectives that . . . merit more immediate attention.” Examples of more pressing policy objectives include Universal Service and inter-carrier compensation reform, the FCC said.

Joining Comptel and the Media Access Project in the petition for mandamus were consumer group Public Knowledge, competitive carriers TW Telecom and BT Americas, the Rural Cellular Association and others.