On June 22, 2009 a group of mostly regional telecom carriers formed a new coalition called NoChokePoints. They are on a mission to get the FCC to reform the fee structure for special access to the large bandwidth pipes mostly owned by incumbent carriers as AT&T and Verizon.
According to NoChokePoints, companies like AT&T and Verizon have misused their powerful presense in large markets by “demanding outrages prices, because they can”.
Maura Corbett, spokeswoman for the NoChokePoints coallition said “Releasing the broadband economy from the chokehold these huge phone companies have on the special access market will be a catalyst for innovation and investment in the broadband marketplace, something we desperately need.”
“The Obama administration, Congress, and the FCC repeatedly emphasize the importance of broadband to our economic recovery and, frankly, it defies explanation that we are still fighting this market abuse,” Corbett continued. “Huge companies like Verizon and AT&T control the broadband lines of almost every business in the United States. The virtually unchallenged, exclusive control of these lines costs businesses and consumers more than $10 billion annually and generates a profit margin of more than 100 percent for the controlling phone companies, according to their own data provided to the FCC. This hidden broadband tax results in enormous losses for consumers and the economy, and this country cannot afford it; especially now.”
tw telecom’s Public Sector’s VP Ken Folderauer (tw telecom also is a NoChokePoints member) stated:
” In the current regulatory environment, policies often keep us from serving all of our customer’s locations. Why? Because it’s either too expensive for us to build our network to a remote location or we cannot purchase wholesale Ethernet services from the incumbent provider, either due to a lack of availability or because the incumbent carrier has prohibitive pricing. In some cases, we can serve first, second and third locations, but cannot get our network to fourth, fifth and sixth locations.”
Ken Folerauer later continued: “And we simply must end the chokepoints if we are to meet President Obama’s challenge for broadband in the United States and create the innovation that spurs growth, creates jobs, solidifies market-based competition and that will, ultimately, play a vital role in leading America out of this recession.”
Here is a collection of statemens from members of the NoChokePoints coallition:
- NoChokePoints Coalition
- Association of College & University Telecommunications Administrators (ACUTA)
- The Ad Hoc Telecommunications Users Committee
- BT
- Media Access Project
- Public Knowledge
- tw telecom
- Sprint Nextel
Obvious self interest, but do they have a point?
It is more than obvious that companies like tw telecom and Sprint Nextel want cheaper access to have access to more customers at a lower pricelevel. But do they have a point and are AT&T and Verizon overcharging and abusing their regional monopolies? Or is the NoChokePoint coallition being overly dramatic and trying to maskerade a business case into a public interest case?
I for one think that the coallition’s spindoctering is hurting their case more than it helps people to take the initiative more seriously. Please join the discussion and share your view below.
Nochokepoints opposing view – USTelecom
USTelecom, a trade association representing several service providers, disagrees with the NoChokePoints statements.
The following statement is from Walter B. McCormick Jr., President and CEO of USTelecom:“These are the same old tired and discredited arguments we’ve heard for years, simply wrapped up in a new package. “The facts remain unchanged. These companies have refused to provide the data to substantiate their claims. That’s not only our view, the fact is that GAO, the FCC, NARUC and virtually every other policymaker who’s been hit up by this call for special treatment has been unsuccessful in obtaining competitive data from many of these companies.
“Most of this market remains under price controls. Those regulations have only been lifted where the FCC has determined there is adequate competition. For example, Verizon has, on average, nine fiber competitors in each of its top 25 markets. Additionally, prices in the high-capacity services market have come down substantially from 2001.
AT&T has shown that the prices its customers pay fell by more than 20% from 2004 through the first quarter of 2007 in real inflation-adjusted terms. Finally, at the same time these companies are asking for this windfall they are also issuing press releases touting their contracts and new offerings in high-capacity services.
“Between the mounting public evidence that competition is rising, and the telling, deafening silence from the other side when policymakers ask for information on their competitive offerings, it’s quite clear that the allegations are frivolous.
“We have today a balanced, pro-competition policy – one that was established under a Democratic FCC Chairman and a Democratic President. We also have an important, unifying national objective of promoting universal broadband deployment, which is bringing everyone together and will make a very meaningful difference in people’s lives.
We need to keep our eyes on the prize and continue to focus on constructive ways to encourage robust, ubiquitous investment in broadband. It is our hope that the new FCC will not be intimidated into ill-considered action in the absence of basic facts.”
A couple of posts from USTelecom explaining their view:
Setting the Record Straight: High-Capacity Business Service
USTelecom Statement on High-Capacity Services
Who’s side are you on? NoChokePoints or USTelecom? Please comment below.
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