Verizon, AT&T and others argue FCC is too old fashioned

The Federal Communications Commission is investigating AT&T, Verizon Communications, CenturyLink and Frontier Communications for alleged unfair business practices. The FCC’s Wireline Competition Bureau is looking into whether the companies’ used strict contracts to hinder competition, and by proxy, hurt the consumer.

“Competitive [local exchange carriers]allege that incumbent LEC business data services tariff pricing plans incorporate a complicated web of all-or-nothing bundling, loyalty and term commitments, complex enforcing penalties, circuit migration rules and other provisions,” the bureau’s filing said. “They assert that the effect is to lock up substantial proportions of carrier and end-user demand, which locks out competition for such demand and consequently harms both competition and innovation.”

The investigation come after years of complaints by smaller communications companies such as Level 3 and XO Communications. Others, including Sprint and Windstream, also praised the proceedings.

Sprint says incumbent LECs’ pricing plans “include non-negotiable and anticompetitive terms and conditions that serve to strangle special access competition and therefore ensure the ILEC dominance continues,” according to the FCC document.

The FCC filing also sites a preliminary review, which “shows that as of 2013 incumbent LECs received roughly three-quarters of the approximately $20 billion in annual revenues from the sales of [digital signal 1]and [digital signal 3]channel terminations, and received close to two-thirds of all revenue from TDM sales,” the filing said.

DS1 and DS3 channels are standards used in North America and Japan to transmit voice and data between devices.

The investigated telcos say the FCC is being shortsighted.

“Although the FCC says that it wants to be a data-driven agency, promote facilities-based competition, and incent broadband investment, it just can’t seem to get beyond its telephone-era mindset when it comes to regulating 20th century legacy services,” the companies argued.

The FCC plans to gather additional information about the pricing plans from the companies in question and decide whether or not to move forward with the investigation.