FCC to investigate whether Verizon and AT&T are locking up the market for high speed business broadband after accusations by Sprint, Level 3, and others
Brian Fung / Washington Post :
Context & Ripple Effects
Sprint and Level 3 have accused Verizon and AT&T of using their control of dedicated 'special access' lines to lock up the high-speed business broadband market, and the FCC is opening a formal investigation in response. This puts the commission squarely between the incumbents that own the wires and the carriers and content companies that must lease capacity on them.
The dispute does not end here: the FCC chairman returns to the same market within months seeking new competition rules for special access, and by 2017 Sprint and Windstream go further, filing a lawsuit against the FCC over its deregulation of business data services. The throughline is that whoever sets the rules on these lines effectively sets the price structure for business connectivity.
First-order effects
- Verizon and AT&T now face a federal investigation into their business-broadband practices, putting their pricing and terms for dedicated high-speed lines under direct regulatory scrutiny.
- Complainants Sprint and Level 3 gain a procedural lever: an active FCC inquiry gives their lockup allegations official standing rather than leaving them as market grievances.
Second-order effects
- Other buyers of special access capacity — competitors leasing first-mile connections — can ride the inquiry's findings toward pressure for rate reductions or nondiscrimination terms from the two dominant providers.
- AT&T, already fighting the FCC on other fronts as seen when the commission reached its preliminary conclusion against its DirecTV data cap exemption, faces a widening multi-front regulatory relationship with the agency it would later challenge at the Supreme Court alongside CenturyLink.
Third-order effects
- If the pattern holds, special access becomes a recurring structural battleground: rules tighten, then loosen (as the later deregulation and ensuing carrier lawsuit show), leaving leased-line economics permanently contested between incumbent owners and dependent buyers.
- The episode points toward business connectivity being treated as a market requiring standing oversight rather than light-touch regulation — with each swing in FCC posture redrawing who captures margin on enterprise bandwidth.
The trend: Business broadband built on incumbent-owned special access lines is becoming a recurring FCC battleground, where carriers that lease those lines repeatedly push regulators to constrain Verizon and AT&T's pricing power.