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FCC Re-Regulation of “Special Access” Services Will Hurt Investment and Economy

Washington, D.C. (PRESS RELEASE – June 30, 2009) – A variety of special interests are calling upon the Federal Communication Commission (FCC) to re-instate stringent price regulation for dedicated broadband transmission circuits (“special access” services), thus reversing the successful, decade-long policy — which began under President Clinton — that has enabled investment and innovation in the industry. According to the Small Business & Entrepreneurship Council (SBE Council), the long-term policy of allowing pricing flexibility has led to greater access to broadband services for small business owners, lower prices and more robust networks.

“Particularly during these economic times, our country needs more business investment, not less. This certainly is the case with respect to investments that yield greater efficiencies and cost savings for U.S. entrepreneurs,” said SBE Council President & CEO Karen Kerrigan.

According to SBE Council, there is no reason for the FCC to change course by intervening in this market. Special access services are high capacity dedicated transmission links used to distribute voice and data traffic. Abundant data and studies continue to demonstrate that competition is strong and growing with respect to special access services. The Government Accountability Office (GAO) concluded that from 2001 to 2006, prices have dropped. Private sector companies/providers have also submitted extensive data proving that special access prices have been falling for years in an increasingly competitive environment. Of course, small business owners have greatly benefitted from these declining prices.

“Small business owners throughout the country have a vested interest in stable telecommunications policy as entrepreneurs stand to gain the most from technological advancements and tools that come with robust investment in this sector. In addition, entrepreneurs, and small to mid-size businesses and their employees that are helping to deploy and service our nation’s broadband infrastructure will continue to benefit from the certainty that comes with a steady policy environment. The economy desperately needs the activity of these growth-oriented firms, and an uncertain and damaging investment climate will no doubt affect the innovation and job creation that is generated by them,” adds SBE Council Chief Economist Raymond Keating.

SBE Council says that there is no reason for the FCC to radically change course as proponents are advocating. Special interest players pushing for the re-imposition of price regulation have not provided meaningful data or information to the FCC about their networks, and have not proven that “a problem” exists to warrant such intervention.

The evidence and data clearly demonstrates that the FCC should re-affirm its long-standing policy of giving phone companies flexibility where competition exists to set prices as market conditions warrant. Such policy certainty will continue to encourage network investment, and in turn small business owners and the economy will benefit. Conversely, the re-imposition of price regulation will hurt broadband investment, innovation and job growth, and undermine the very competition that policymakers are aiming to foster in the high capacity services market,” concludes Keating
SBE Council is a 70,000-member national, nonprofit small business advocacy organization dedicated to protecting small business and promoting entrepreneurship. For more information, please visit www.sbecouncil.org.