Here and There, We Need Competition Everywhere

While presidential candidates debate the need for a wall on immigration, AT&T sure seems dead set on building a wall to keep out competition.

Recently, on its public policy blog, the Bell giant demonstrated its predilection for protectionist policy, arguing that London-based BT (British Telcom’s) U.S. subsidiary based in Irvine, Texas should be forced to pay monopoly rent rather than access fees that reflect a market driven by competition.

While BT set the record straight in this new fact sheet, the AT&T monopoly protection plan is beginning to show cracks in the foundation.

It starts with customers.  By wide margins, Americans want more choices for broadband Internet service providers (Morning Consult poll).  They want more choices at home and at work. According to the FCC, at higher speeds, half of all Americans only have access to one broadband provider, and a vast majority can only choose between two providers.

Customers have seen competition shake up wireless markets – bringing better plans and lower rates.  They have also started to see video markets change with technology innovations like over the top.  But competition for the broadband pipe into the home and office has not flourished.  This is in large part due to the border wall the Bells have built, which continues to cut off last mile networks.

Sometimes the Bell competition-blocking scheme is a blitz, like when they tried and failed to eliminate wholesale competition for new networks during the tech transitions. Other times they play a drawn out game of prevent defense – imposing  lock-up terms and conditions that tie up the market in long term special access commitments that stifle competition, deter new network builds and slow the transition to all-IP.

We all saw Verizon end lock up contracts in the more competitive wireless market this August. Yet it is still using this anti-competitive tool for special access services competitors use to serve the business and wireless markets. We encourage the FCC to launch an investigation into this practice.

And don’t be fooled by the brick AT&T threw at BT. Special access isn’t just an issue that affects global competitors.  It’s critical for all homegrown U.S.-based new network builders – wired and wireless.  It is also an issue for the thousands of schools, hospitals, libraries, and government offices around the nation that rely on competitive broadband options that rely on special access services.

Many of these new builders are based in local communities and invested billions in fiber deployments.  They have bet their business futures on beating the big guys like AT&T and Verizon with innovative products and better customer service.

Clearly AT&T is betting that a xenophobic strategy is the best way to win over the hearts and minds of policymakers in the U.S.  To truly appreciate the irony of AT&T’s attack, you don’t need to cross the Atlantic. Just look south to Mexico.  There, AT&T is not the legacy provider.  But thanks to new competition rules, the company sees an opportunity and plans to invest $3 billion in Mexico so it can be the competition, rather than stifle it.

This summer, AT&T CEO Randall Stephenson went out of his way to praise the Mexican government for new competition rules that make it easier for smaller companies to invest and build new networks, while fighting competition policies with the same effect in the U.S.

Stephenson said: “As we are now seeing in Mexico, business investment increases with thoughtful, responsible regulation. And when companies invest — whether in expansion or improved services for consumers and businesses — they create jobs.  It is a simple, powerful formula.”  The OECD agrees, projecting that the adoption of competition policies in the telecom sector will contribute to a significant growth in the Mexican economy over the next five years.

Current examples like Mexico and our own history show competition is a powerful force for economic growth and investment.  Ending monopoly policy, preventing monopoly rents, and stopping the protection of incumbent companies always leads to greater growth, investment, efficiency, innovation and productivity.

AT&T is lashing out and looking for a new spin because the FCC, led by Chairman Tom Wheeler, is making good on its promise to protect and promote competition.  From the Open Internet Order to the Tech Transitions, the FCC has listened to millions of consumers and thousands of businesses’ customers seeking more competition.

Last month, Chairman Tom Wheeler and the FCC furthered the process to help usher in a new era of competition by allowing for the analysis of market data.  Action to break open the broadband market and unlock competition from terms and conditions that inhibit the ability of business customers to choose a provider and obtain affordable options may finally be at hand.  After all, competition is the future, and the writing is on the wall.

Chip Pickering is the CEO of COMPTEL, the competitive networks association. He is a former Republican Member of Congress from Mississippi. @ChipPickering

Morning Consult