The Federal Communications Commission on Friday began an investigation into the prices AT&T, Verizon, CenturyLink, and Frontier charge businesses for certain data services.

So-called "special access" service (primarily delivered over copper) is purchased by wireless carriers including Sprint, which has accused the sellers of anticompetitive pricing and conditions. Special access connections are also used by "small businesses, government offices, hospitals, medical offices, schools, libraries, ATMs, and credit card readers," the FCC has noted.

The order for an investigation concerns only special access lines that use older time-division multiplexing (TDM) technology that is still subject to price regulation and tariff requirements, unlike consumer broadband services and newer business offerings. This covers a market of more than $20 billion per year.

“Almost every American relies upon these high-capacity, ‘special access,’ broadband lines each day—usually without even knowing it," the Computer & Communications Industry Association said in a statement applauding the FCC's investigation. "But the only thing ‘special’ about them is that the two biggest providers ‘lock-up’ their customers into long-term, exorbitant contracts, preventing them from seeking alternative choices and using innovative new products."

The FCC was collecting data on special access before deciding whether to launch a broader investigation. The record in the proceeding "raises sufficient questions regarding the lawfulness of certain terms and conditions contained in certain special access tariff pricing plans offered by AT&T, CenturyLink, Frontier, and Verizon to warrant their investigation," the FCC said.

Special access sellers essentially have local monopolies in various areas where there isn't competition and allegedly use their market power to lock buyers into giant contracts. XO Communications complained that the contracts "effectively lock up demand not only in areas where the price cap LECs [local exchange carriers] provide the only facilities-based option... but extend into those areas where other providers do have network facilities.”

The investigation will focus in part on "percentage commitments" that lock buyers into purchase levels "rang[ing] from 80 to 95 percent of the buyer’s previous purchase levels," the FCC said. These deals allegedly force purchasers to keep buying the older TDM services, making it harder to upgrade to fiber and IP-based data services. (T-Mobile US has managed to upgrade nearly all of its backhaul to fiber, however.)

The sellers have argued that "their pricing plans are not anticompetitive because such plans are voluntary, [and] purchasers have a number of options to meet their needs," the FCC said.

The USTelecom industry association, defending AT&T and Verizon, noted that cable companies don't face similar regulation in delivery of business data services. "Yet, at the very time the commission is expressing concern over the growing dominance of cable in the overall broadband marketplace, and acknowledging that burdensome legacy regulation of telecom companies is misdirecting investment and hindering competition, it launches an old-fashioned 'tariff' investigation of the only competitors in the marketplace who are required to operate under last century’s antiquated rules," USTelecom said in a statement.

Carriers that buy from AT&T, Verizon, and others want the investigation to proceed, however. Sprint said "the FCC must take steps to address the stranglehold a few companies have on these basic inputs," while Windstream said that "the FCC should review terms and conditions forced upon smaller, competitive providers and ensure that competition isn't being unfairly constrained.”