Verizon Rate Ruling May Hit Small Business

VERIZON RATE RULING MAY HIT SMALL BUSINESS
[SOURCE: Wall Street Journal, AUTHOR: Corey Boles corey.boles@dowjones.com]
Small businesses in Boston, New York and four other East Coast markets could face billions of dollars in added telecom costs if regulators grant a Verizon Communications Inc. request allowing it to charge competing phone companies much more to lease access to its network, critics of the proposal say. The Federal Communications Commission must vote by the end of the year on an attempt by Verizon to be excused from several FCC rules in the commercial telecommunications market. The company has argued there is sufficient competition in the six East Coast markets in question and therefore it should be excused from the regulations. The markets are Boston, New York City, Philadelphia, Pittsburgh, Providence, R.I., and Virginia Beach, Va. Under the current regulations, Verizon is forced to charge rates that are significantly lower than what it would likely charge in an open market. Smaller companies such as XO Communications, which argue the FCC shouldn't consider granting such a request, say it will result in Verizon increasing its dominant position at the expense of competition. XO competes against Verizon in Boston, New York, Pittsburgh and Philadelphia. In a study for XO, QSI Consulting Inc., based in St. Louis, said if the FCC grants the relief, small business customers could face an increase of 20% to 30% in the rates they pay for phone and Internet service. QSI compared the rates Verizon currently charges competitive carriers to use its facilities to the amounts it could increase its prices to calculate a roughly $2.4 billion a year increase. The differences range from $85 million annually in Providence to $1.37 billion in New York City.
http://online.wsj.com/article/SB119362252004574473.html?mod=todays_us_page_one
(requires subscription)