T-Mobile, Sprint Get To Benefit With FCC’s Vote To Reform Special Access Lines

The Federal Communications Commission (FCC) has voted (3 to 2) to proceed with reforms of special lines. This move by the FCC looks to be beneficial to a couple of major US wireless carriers -- T-Mobile and Sprint -- and may even preempt price hikes in light of the upcoming commercial deployment of 5G networks.

Specifically, the FCC voted to approve an order that bars incumbent local exchange carriers (ILECs) -- examples are industry leaders Verizon Wireless and AT&T -- from slapping early termination fees on T-Mobile, Sprint, or other mobile users of fixed line services. Moreover, the order prohibits demand lock up contracts that hinder users from opting for other alternative mobile service providers, and pushes for the formation of a new technology neutral structure in which the regulations are expanded to mobile markets considered uncompetitive.

Special access lines make up about $25 billion worth of the $40 billion market for business data services. This is where fixed line telecommunications send immense volumes of information for mobile network service providers, plus ATMs, banking institutions, hospitals, factories, plants, and more. In wireless backhaul, special access lines play a huge part, connecting wireless networks together by way of fixed line equipment and structures.

As pointed by the FCC via a publicly released statement, business data services serve an important role in the daily routines of not only consumers but also businesses and industries, especially in the age of mobile. However, information gathered by the FCC seems to suggest that competition in this market not balanced. Furthermore, rules already instituted by the FCC has not effectively identified which markets have lacking competition, not that they have much success in detecting which markets are indeed actually competitive.

Verizon Wireless, AT&T, CenturyLink, and Frontier were specifically mentioned by the FCC. According to an investigation conducted by the agency, certain terms and conditions from these entities were found to be unfair, unreasonable, and causing decreasing competition and difficulty in shifting to newer wireless technologies. As stated by the FCC, these companies will have to withdraw the illegal terms of these tariffs, and then file new tariffs within a couple of months of release of the order.

The FCC believes that the demand for special access lines will increase dramatically in the next few years, especially that various 5G network offerings will become more available to mobile users, exponentially boosting the amount of mobile video and Internet of Things related data transmitting through the lines.