WASHINGTON, June 23, 2009 - Wireless carriers and consumer advocates joined forces Monday to open a new front in the battle over pricing for "special access" markets.
The newly-formed NoChokePoints coalition brings together a number of unlikely bedfellows that usually clash on many topics, most notably Sprint Nextel and Public Knowledge, in order to battle the "chokehold that these huge phone companies have on the special access market."
The markets in question are located in rural areas where large wireline carriers are required to lease "backhaul" capacity to both wireless carriers and other internet service providers at "special access" points along the so-called middle mile. Coalition members say this creates "chokepoints" are underregulated, providing opportunities for incumbent carriers to overcharge competitors.
While the telecommunications sector has very little competition in general, there is even less in the special access world, said Public Knowledge president Gigi Sohn. "We are taking special access out of the shadows and into the light where it belongs," she said.
And while the Obama administration, Congress and the FCC have highlighted the importance of broadband to the nation's economic recovery, a coalition spokesman said "it defies explanation that we are still fighting this market abuse" on the middle-mile.
The FCC has done little to solve the problem despite years of notice, said Ad Hoc Telecommunications Users Committee representative Colleen Boothby. "The former FCC [under Kevin Martin] ignored the facts, deregulated these services, and did nothing as prices and profits rose to unprecedented levels," she said. The incoming FCC must prioritize the problem to end "price-gouging by the incumbent telephone companies," she added.
Sprint Nextel senior vice president Bob Azzi said high special access rates, which his company pays in approximately 90 percent of markets it served, reduce broadband availability and create a "broken market."
The U.S. can look to other nations for an easy solution, said New America Foundation Fellow Sascha Meinrath. Meinrath compared the special access problem in the U.S. to the gasoline market: "Imagine if gasoline had a 13,000% mark-up." He said New America will release a report comparing the two markets in detail later this week.
The Obama administration, specifically FCC Chairman-designate Julius Genachowski, can take action to solve the problem "if we are to meet President Obama's challenge for broadband in the United States and create the innovation... that will, ultimately, play a vital role in leading America out of this recession," said TW Telecom Public Sector Vice President Ken Folderauer.
- Advocates for Antitrust Enforcement Say Consumer Welfare Standard Only One Layer of Competition Law
- In Law More Than a Year, MOBILE Now Advocates Say Act Requires Further Implementation for 5G Deployment
- Broadband Roundup: Texas Reaches T-Mobile Settlement, Closing the ‘Homework Gap,’ Broadcast Ownership
- UTOPIA Fiber Announces Completion of Latest Round of Funding, a $48 Million Network Expansion
- Prakash Sangam: China’s Huawei Clones Are Greater Threat to National Security than Huawei
Signup for Broadband Breakfast
Intellectual Property4 months ago
In Congressional Oversight Hearing, Register of Copyrights Says Office Is Responding to Online Users
Broadband Data6 months ago
California Report: Income Most Significant Factor in Low Broadband Adoption
Privacy and Security3 months ago
Comparing Privacy Policies for Wearable Fitness Trackers: Apple, Fitbit, Xiaomi and Under Armour
Antitrust3 months ago
Addressing the Impact of Big Data Upon Antitrust is More Complicated Than a Big Tech Breakup
Expert Opinion5 months ago
Geoff Mulligan: A ‘Dumb’ Way to Build Smart Cities
Antitrust3 months ago
Broadband Roundup: Everyone (Almost) Gangs Up on Google, Muni Broadband Fact Sheet, SHLB Anchornet Conference
Broadband Roundup4 months ago
Cable Industry Touts Energy Efficiency, Next Century Highlights Open Access Fiber, Aspen Forum Set
Broadband's Impact5 months ago
Law Enforcement and Advocates of Facial Recognition Technologies Battle Misconceptions