A senior Democratic lawmaker on Tuesday urged the Federal Communications Commission to help cut fees that major U.S. phone carriers charge rivals for access to high-capacity lines serving business and wireless customers.
Rep. Edward Markey (D-Mass.), chairman of the House telecommunications subcommittee, said the FCC should reinstate regulations that would force Verizon Communications and AT&T to provide affordable access to high-capacity fiber-optic lines.
"Unless this market failure is corrected, (the fees) could have a negative impact on all wireless broadband deployment...Markey said at a subcommittee hearing.
The FCC is nearing a decision on whether to tighten regulations over the fees that can be charged for the high-capacity, "special access" lines.
The major carriers have been able to get price restrictions relaxed in some U.S. markets that the FCC deems competitive under procedures set up by the agency in 1999.
Rivals such as Sprint Nextel and XO Communications argue that major carriers like Verizon and AT&T have taken advantage of the deregulated market to boost special-access fees in recent years, depriving rivals of money they need to build out competing broadband networks.
Executives with AT&T and Verizon told lawmakers at the hearing it would be a mistake to re-impose regulations because the market for special access is already highly competitive.
"Re-regulation of special access services is unnecessary and inappropriate," Parley Casto, AT&T assistant vice president, told the subcommittee.
The FCC could decide within the next two weeks whether to clamp down on the access fees, as well as a related request by some carriers to lift other network-sharing requirements in some major U.S. cities.
Analysts say the five-member Commission is split over the issue between Republicans and Democrats. One of the three Republicans, Robert McDowell, holds the swing vote.
"The future of competition in telecommunications hinges on whether we address the special-access market failure," Sprint Chairman Gary Forsee told lawmakers. Forsee and some others at the hearing argued that inflated access fees are an "overcharge bonanza" adding up to $7.4 billion a year.
But Verizon and AT&T said the market has a growing number of competitors and declining prices.
"The FCC...should affirm the current special-access policy that removes government-regulated pricing where competition exists in the market," Tom Tauke, Verizon executive vice president, said in prepared remarks.
That argument got a sympathetic response from many Republicans on the subcommittee, including ranking Republican Fred Upton of Michigan.
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