AT&T: FCC Is 'Economics-Free Zone'

AT&T continued to push back Tuesday on FCC chairman Tom Wheeler's proposed reform of the special access—or as he has rechristened it, business data services (BDS)—market.

In a speech to INCOMPAS (competitive telecoms) in Washington Monday, Wheeler said he was much in accord with a compromise approach to regulating business broadband offered up on the eve of the FCC's proposal by INCOMPAS and Verizon.

That was no surprise since the two dovetailed.

In his speech, Wheeler tied reform of business broadband (his self-claimed rebranding of "special access") to advancing 5G mobile wireless. "[B]ecause 5G will be the first mobile technology to add the use of millimeter wave spectrum at scale, wireless signals will travel shorter distances. This means that 5G cell sites will be much more densely located than traditional networks. We will see a proliferation of new cell sites requiring expanded backhaul capacity – and backhaul is a Business Data Service," he said.

AT&T's senior executive VP Jim Cicconi said Tuesday that he agreed that investment in 5G is essential, but also said in no uncertain terms that the FCC's plan was not the way to promote it. 

"[I]mposing regulation on special access prices and contract terms is not going to produce it. In fact, the entire notion that more layers of FCC regulation will yield more broadband investment is absurd on its face, and proves that this FCC remains ‘an economics-free zone,’" Cicconi said in a statement following the chairman's speech. "The Commission’s proposals will instead lead to far less investment in broadband infrastructure – especially in rural areas – the very opposite of where we should be going as a nation.”

AT&T broke with its fellow incumbent telco (ILEC), Verizon, over the reform proposal. AT&T did not comment on that divergence but likely sees Verizon's interests increasingly allied with the buying rather than selling backhaul services the FCC is regulating.

Cable operators have been pushing back, too, since the FCC—and Verizon and INCOMPAS—are proposing including their business broadband service, which has traditionally been treated as the de facto nondominant competitor to the ILEC's service, in the regulatory mix based on an approach that tries to identify what player lacks sufficient competition, incumbent telco, competitive telco, or cable operator, and regulate accordingly.

It is yet another manifestation of the chairman's "competition, competition, competition" mantra, suggesting that competition, not what service provides business broadband, should be the operative factor.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.