FCC Pricing Rules on Internet Lines Spark Industry Protest

Lobbyists for major phone and Internet providers are telling the Federal Communications Commission that its proposal to curtail the price of high-grade network lines will temper large companies’ willingness to invest. In August, the agency voted 3-2 along party lines for a proposal to regulate telecommunications companies’ transition from old copper lines to higher quality fiber lines. The proposed rules would obligate companies with existing fiber facilities -- generally legacy companies like Verizon or AT&T -- to sell replacement fiber services to their copper-using competitors at regulated rates. The regulations are aimed at keeping prices from going too high. But some argue that they could negatively impact how, or even if, bigger companies invest in their own networks.

“The mere consideration of these and other new regulations has decelerated investment,” said Bruce Mehlman, co-chairman at the Internet Innovation Alliance, an advocacy group for broadband issues. “We’ve seen a deceleration of investments because of regulations.” The FCC’s price restrictions on fiber sales would be temporary, according to the proposed rule. They would only be in effect until the FCC finishes its broader assessment of price regulations on telephone and Internet lines. The FCC has been analyzing the market to see whether regulators need to impose new regulations to allow smaller providers to compete on a level playing field.