AT&T At Odds With BellSouth Over Special Access

Telecom Policy Report, July 7, 2004

The failure of the so-called Intercarrier Compensation Forum (ICF) to deliver to the FCC an industry-wide consensus plan for reforming the interexchange access regime appears to have spilled over into the realm of "special access." Late last week, AT&T filed a formal complaint with the FCC charging BellSouth with engaging in anti-competitive conduct in the way it provides "special access" services to its wholesale customers. "Special access" refers to the high-capacity local links, such as high-speed T-1 and T-2 lines, local phone companies provide to businesses and other heavy volume generators of telecom traffic. The FCC considers special access to be fully competitive and, therefore, does not regulate prices for the service.

This argument over special access has been simmering for a very long time, according to AT&T spokesperson Claudia Jones. She told TPR that AT&T has made numerous attempts to resolve its problems with Atlanta-based BellSouth, all of which have failed. A source at the FCC who asked to remain unnamed also confirmed that the AT&T-BellSouth special access dispute has been going on for "many, many months."

The FCC source added that over the past few weeks, AT&T has made several visits to the Commission in order to discuss its concerns with FCC staff. However, the agency has -- until now -- been unable to investigate AT&T's allegations inasmuch as the FCC had no formal complaint in its possession upon which to base such a probe. "Now we do," the source said.

In essence, AT&T is accusing BellSouth of providing steep discounts on BellSouth's special access services exclusively to customers who "lock-up" nearly all of their special access needs on BellSouth's network. This sort of pricing policy enables BellSouth to "starve its special access competitors of demand for their services," and at the same time prevent its wholesale customers from diverting traffic to special access facilities operated by BellSouth's competitors, AT&T said in its complaint to the Commission.

Last Friday (July 2) BellSouth spokesman Bill McCloskey told TPR that AT&T's complaint is not really about the legality of BellSouth's pricing plans. "In fact, these plans are no longer available for new subscriptions," he said. "What AT&T really wants is for the FCC to force BellSouth to tailor these plans specifically to AT&T's position in the marketplace."

McCloskey said AT&T's position is "especially egregious in light of the fact that AT&T has received hundreds of millions of dollars in benefits from these plans over the last six years." He described the FCC complaint as "a calculated competitive move that has nothing to do with the appropriateness of BellSouth's special access plans."(see Telecom News Digest, July 2, at www.TelecomWeb.com).

Earlier this year, a coalition of entities involved in the growing debate over special access filed a mandamus petition with the D.C. Circuit Court of Appeals, asking the court to compel the FCC to take action on an unrelated AT&T special access petition that has been lingering at the regulatory agency for more than two years.

The coalition, which includes AT&T, AT&T Wireless, the CompTel/ASCENT Alliance, the eCommerce & Telecommunications Users Group (eTUG), and the Information Technology Association of America (ITAA), claims that regardless of whether businesses pay for special access directly or indirectly, excessive charges for special access are passed on to consumers in the form of higher prices for everything from groceries to cars to computers to legal advice to brokers' commissions.

AT&T and the other members of the coalition want the FCC to return special access pricing to the regulatory regime.

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