AT&T Inc. (T) Draws FCC Attention On Special Access Services Asked By BT Group plc (ADR) (BT)

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AT&T Inc. (NYSE:T) draws Federal Communications Commission (FCC)’s attention on BT Group plc (ADR) (NYSE:BT) request to bring back stricter rate regulation. That was specifically for the special access services provided by the domestic telecom services provider and sold to businesses. The British company expressed its unhappiness over the leading domestic service provider abusing their stronghold in landline to upset their rivals’ plans.

Essence Of BT Position

In a blog post, AT&T Inc. (NYSE:T) SVP for Federal Regulatory, as well as, Chief Privacy Officer, Bob Quinn, reacted to the articles carried in Financial Times. According to him, the BT Group plc (ADR) (NYSE:BT)’s position was that it was shelling out more for special access service compared to other countries in the Western World. Also, the company was getting poor performance and hence sought the re-establishment of strict rate regulation followed by other countries, especially the United Kingdom.

The Britain Company disclosed that it was unable to compete with the rivals because it had to pay hefty fees to use its rival’s networks for carrying data traffic. Its charge was targeted towards AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ). Both are said to be controlling about 80% of the special access network, which runs telephone and broadband lines. BT also charged both the companies of overcharging to the tune of $9 billion per year for the special access networks. As a result, the FCC sought data of last year from telecom firms.

Response from American Firm

Bob Quinn pointed out that the Britain firm never explained how the return to strict rate would encourage any group to invest more in fiber. He suspected that it was because history reminded about a return to such policies will not encourage any investment.  He indicated that the company was committed to establishing 12.5 million fresh fiber-to-the-home connections in the wake of its merger with DIRECTV.

Quinn also pointed out the OECD data and the prices that BT Group plc (ADR) (NYSE:BT) charged in 2014 in Britain. He said that the charges were 50% more than anyone else paying in the United States for similar kind of services. He shared the two charts presented below with the press.

chart1

chart2

Regulatory Regime Like UK

AT&T Inc. (NYSE:T)’S Quinn said that it was quite clear from the attitude of BT that it wants the United States also to follow a similar regulatory regime like the Britain. He said that it would have only meant a less broadband investment but higher price and yet very bad service to customers. He said that the British firm can get cheaper prices for services, which are already lower in America than the United Kingdom. He could not understand the logic behind in following such policy.

Finally, the telecom firm’s SVP said that if at all the Americas have abandoned strict rate regulation; it was because of the problems experienced in Britain. Quinn stated that BT Group plc (ADR) (NYSE:BT) criticized the same policies back home and now wants America to follow.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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