By Dow Jones Business News, October 28, 2013, 02:45:00 PM EDT
AT&T Delays Fee Change Amid Complaints
AT&T Inc. ( T ) is postponing an effective price increase on some of its dedicated data and voice lines after the move
was met with strong opposition from customers and competitors who buy the service.
AT&T announced earlier this month it would no longer offer extended contracts, and the discounts that come with it,
for older types of high-capacity network connections for businesses known as "special access lines." Sprint Corp. and
other telecommunications companies that buy the connections claimed the move was anticompetitive and complained to the
Federal Communications Commission.
AT&T and Verizon Communications Inc. control 80% of the special access market, Sprint and other rivals say. The
connections are used mostly by businesses that need dedicated network connections for such purposes as hooking up ATMs
or connecting field offices to a company headquarters. Wireless carriers use them to connect cell towers to the broader
network, and the connections are also bought by AT&T's competitors and resold to businesses.
On Friday, AT&T sent a letter to business customers saying it will postpone the changes for 30 days in order to "
address questions and concerns that customers have raised."
AT&T must notify the FCC of any changes to its special access lines. The changes will take effect automatically unless
the agency decides within 15 days to halt their implementation for further review. AT&T says it will notify the FCC on
Nov. 25 of its intended moves, and expects the changes to take effect Dec. 10.
"This additional time will enable discussion of your questions and concerns and exploration of alternative
arrangements," AT&T wrote.
AT&T wants to stop offering these older types of connections, known as TDM, in favor of faster Ethernet connections
that use Internet Protocol-based technology. Many companies are already relying on IP-based connections, and AT&T says
it plans to complete its network transition from TDM to IP by 2020. AT&T wants to stop offering TDM contracts longer
than 36 months. Previously it offered TDM contracts up to 7 years that came with a discount.
"The IP network will be modern--more efficient, more versatile, and more resilient than a traditional TDM network,"
AT&T wrote. "Eliminating long-term commitments to TDM services is a necessary part of that modernization process."
But IP-based connections can be more expensive than TDM connections, which are subject to rate regulation.
"A 30-day delay does not address our concerns with AT&T's exercise of market power or their ability to unilaterally
raise the rates," said Sprint spokesman John Taylor.
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