Groups protest Verizon's proposed special access rate hikes

Verizon wants to raise rates for middle-mile broadband access about 6 percent

Members of the NoChokepoints Coalition will ask the U.S. Federal Communications Commission to stop Verizon Communications from raising the rates for middle-mile broadband connections that many businesses rely on.

Verizon has proposed to raise the rates on its so-called special access services by 6 percent, according to the coalition. Special access fees are the rates that businesses and other large telecom customers pay for connections to carriers' central switching facilities.

Members of the coalition planned to file petitions opposing the rate hike late Monday with the FCC, a coalition spokeswoman said.

While global broadband prices are dropping, Verizon has proposed its second increase in less than a year, said Maura Corbett, NoChokepoints' executive director.

"It doesn't take a PhD in Economics to figure out that if a company is able to continually raise prices in a market where the costs keep dropping, that it's probably using that market as its personal ATM machine," Corbett said in an email. "So while the rest of the economy struggles to recover from one of the worst economic downturns in history, Verizon continues to overprice this critical broadband input simply because nobody is stopping them."

Verizon said prices for affected DS1 and DS3 services have declined by more than 15 percent over the past decade, when adjusted for inflation, even after the proposed increase.

"The marketplace for high-capacity services, including special access, is competitive, and it is growing increasingly competitive as wireless backhaul generates increasing demand," Verizon said in a statement.  "Customers have more choices as cable providers, fixed wireless providers, and other competitive providers have expanded their offerings to meet the growth in demand."

Corbett disputed Verizon's numbers.

Members of NoChokepoints include Public Knowledge, Sprint Nextel, U.S. Cellular and XO Communications.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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Grant Gross

IDG News Service
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