There are other candidates, but if one is looking for an
indictment of what is wrong with the FCC's approach to regulation, there is no
need to look further than the agency's handling of "special access"
services.
Never heard of them? It is not surprising because these are
not services used by ordinary residential consumers, but rather they are
"private lines" or "dedicated lines" used primarily by
large corporate users and other communications carriers.
In the late 90s, the FCC largely got out of the business of
regulating the rates for special access services provided by the incumbent
local exchange carriers because the agency determined that, at least in many
places, competition existed in this market segment. This was a somewhat hopeful
sign that the Commission was prepared to relax its traditional regulatory grip
as competitive market conditions developed. Unfortunately, ever since the
Commission's deregulatory action, some users of special access services have
been agitating for the Commission to reverse course and re-regulate.
This special pleading regarding special access is especially
counter-productive – and the FCC should reject it.
Over the years – unfortunately, when you refer to FCC
proceedings, more often than not you are talking about "over the years,"
not months – I have written much, often in considerable detail, about why the
ongoing campaign to re-regulate special access is wrong-headed. I don't propose
to do so again today. But here is a piece
published in June 2007, and here is one
published in February 2009.
These two pieces are both still instructive. Indeed, the
rationale for not re-regulating special access is now even more persuasive,
especially as the communications marketplace has become ever more competitive
and as our nation is trying so hard to stimulate new investment.
AT&T's Bob Quinn makes these points, and others, nicely
in a blog
posted today.
This is the only point I want to emphasize here, which I
made back in 2007, and since: No one argues that special access is a natural
monopoly. Competitors have been seizing, and continue to seize, opportunities
to enter the "special access" market segment and build out new
network facilities – even though they are clever enough not to market their
competitive services under the "special access" moniker. Bob cites
recent examples.
But if the FCC were to reverse course and require the
incumbent providers to reduce the rates for their special access services, the
incentive for competitors to continue investing in the build-out of new
facilities would be suppressed.
Thus, perversely, through new regulation, would the FCC
undermine the policy, which ought to be especially important now, of
encouraging new investment.