The Federal Communications Commission’s (FCC) potential move to regulate the “special access” or business broadband market is not based on sound economic principles or analytic practices, according to Larry Downes, the director of the Evolution of Regulation and Innovation Project and Senior Industry and Innovation Fellow at the Georgetown Center for Business and Public Policy.

Downes, a prominent scholar of technology regulations noted in a recent policy paper that competitive local exchange carriers (CLECs), mobile network operators and other buyers of special access services from incumbent local exchange carriers (ILECs) see the agency’s potential move to regulate the business broadband market as an opportunity to improve their own competitive position as both buyer and now seller (rather than reseller) of special access services. These companies are knowingly or otherwise are aligning themselves with the FCC, an agency that aims to be the sole regulator for the entire broadband ecosystem, Downes said.

“While the agency may be supportive for now of their efforts to hamstring the incumbents, it may only be to enhance the Commission’s larger agenda of establishing regulatory primacy of broadband access from end to end—a goal that could intentionally or otherwise harm the continued growth of competitive markets, Downes added.

Here are some noteworthy excerpts from Downes’ policy paper that address the dangers from the FCC’s interest in the business broadband market.

  • “In the fast-changing special access market, it now seems, enterprise customers who committed to long-term requirements and exclusive purchase when the negotiated terms were attractive to them now regret their decision in light of better and perhaps cheaper alternatives from a growing list of providers offering high-speed, IP-based special access using newer network technologies.”
  •  “The Commission’s continued tilting at the special access windmill reveals just how determined the agency is to insert itself deep inside largely unregulated broadband markets, both enterprise and consumer. And how dangerous that misguided decision may prove to be.”
  • “Though the agency claimed to be reviving the special access proceeding in part to speed up the transition away from what’s left of the analog phone network toward an all-IP infrastructure, the Commission is actually pursuing a very different agenda: creating a role for itself in the fast-approaching digital future . Leveraging the momentum of its decision to vastly expand its public utility authority,22 under cover of saving “net neutrality,” to include the entire Internet, the agency is putting all service providers on notice.”
  • “The FCC’s renewed tinkering with the regulated special access market seems to be little more than a dress rehearsal for future regulation of new cable and fiber-based competitors, all of it considered and applied at the same leisurely pace we’ve seen with the 2005 order.”
  •  “No more compelling evidence of the danger of that folly is needed than the history of the special access proceeding itself, which has dragged on for over a decade, failing at every stage to demonstrate either relevance or an ability for the FCC to conclude it in a way that would enhance, rather than damage, both emerging and legacy services.”