The Most Important Part of the Telecommunications Business You Probably Don't Know About

[Commentary] A hallmark of Tom Wheeler’s tenure as Federal Communications Commission Chairman has been his willingness to take on difficult challenges and push them to completion. Surely one of the most difficult of these undertakings has been to reform “special access,” which the Wheeler FCC has wisely, and more appropriately, renamed “Business Data Services.” Reform advocates argue that BDS prices are grossly excessive and unjustly enrich the former AT&T local phone companies. They maintain that this has stifled competition and dissuaded new entrants into the market. Since these overcharges are passed through to all consumers, the overcharges have arguably increased the prices that we pay for all manner of services seemingly unrelated to telecommunications. To understand the role of these wholesale services, think about how you place a call or send an email on your cellphone. The communication travels only a very short distance via wireless spectrum to a nearby antenna. Your provider must then get the data to a node where it can be entered into the international Internet and telephone networks. The process may work in reverse at the receiving end of the message. Unless your provider is AT&T or Verizon Wireless, the cell phone company must purchase access to these connections, and the “legacy” phone companies still maintain a near-monopoly on these services.

[Schwartzman is the Benton Senior Counselor at the Public Interest Communications Law Project at Georgetown University Law Center's Institute for Public Representation]