Earlier this month, the trade press reported that FCC Chairman Julius Genachowski was circulating an order among his fellow Commissioners that not only would re-evaluate how the agency de-regulates special access services provided by incumbent local exchange companies (“ILECs”) but would also “temporarily suspend consideration of pricing flexibility pending the development of as new framework.”  In a recent blog, Phoenix Center Chief Economist George Ford criticized this plan, arguing that the admitted failure of regulation is not a valid reason to suspend deregulation, and that this “regulate first mentality” threatens investment in the industry.  As George stated, “the agency’s decision to suspend deregulation and extend …
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As both the courts and the Federal Communications Commission have consistently recognized, price regulation is “far from an exact science”.  For this reason, since the late 1980s, the FCC has slowly and steadily sought to eliminate the direct price regulation of communications services at nearly every possible opportunity.  (See, e.g., the FCC’s Competitive Carrier paradigm, which culminated in the total forbearance from tariffing requirements.)  Given this long-standing policy, it is indeed curious that the FCC is reportedly circulating an order among its Commissioners that not only would re-evaluate how the agency de-regulates special access services provided by incumbent local exchange companies (“ILECs”) but, more importantly, …
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In 1999, the FCC began to grant incumbent LECs pricing flexibility on special access services in some Metropolitan Statistical Areas (“MSAs”) when specific evidence of competitive alternatives were proven to be present.  Ever since, whether or not the Commission was justified in following the path toward deregulation of special access services has been disputed.  A proceeding initiated in 2002 on the topic of special access pricing flexibility remains open today. Recent press reports indicate that FCC Chairman Julius Genachowski is now circulating a proposal that would transform the way the FCC regulates such high capacity services.  Among other things, this agency’s review of the regulatory …
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