Press Release

Public Knowledge Asks FCC To Protect Consumers In Underlying Telecom Service Market

February 25, 2010 , , ,

Background: The Federal Communications Commission (FCC) is trying to figure out how to examine the market for some of the most popular telecom services used by big business – so-called “special access” services.

Public Knowledge (PK) late Feb. 24 called on the Federal Communications Commission (FCC) to make certain that consumer interests are taken into account into as it examines the structure of a market that sells its services to big business. The PK filing is here.

In comments to the FCC, PK argued that the so-called “special access” service prices have an impact on consumers: “This technical and obscure proceeding, that not one in a million Americans has ever even heard of, ultimately has more impact on everyone’s pocketbook and bottom line than billion dollar stimulus and job creation measures debated in the Congress today.”

The PK filing compared special access services used by big business to crude oil: “Consumers do not buy special access services directly anymore than they buy barrels of oil directly from the tanker. But when the price of crude oil goes up, consumers pay more for gas in their cars, more for groceries brought by truck to supermarkets, more to heat their homes, and so forth.”

In order to make certain that consumer interests are protected, PK argued that the Commission should ignore the arguments of big telecom incumbents, who argue that competition exists simply by looking at the number of companies which may or may not offer services over a wide ranging geographical area. Instead, PK said, the FCC should look at whether there are “just and reasonable rates” in any given market.

Commenters in the proceeding, principally large telecom companies, providing a list of possible sources of competition “have provided no test for determining whether the presence of these competitors has any actual impact on pricing and practices, and if so whether the level of competition is sufficient to produce just and reasonable rates without additional regulation,” PK said. PK recommended the Commission conduct an audit of special access prices in a variety of markets, some of which are still regulated, and some of which are under different types of deregulation under existing FCC orders.