FCC stalls AT&T move to end discounts for wholesale clients

Reuters

NEW YORK, Dec 9 (Reuters) - The U.S. Federal CommunicationsCommission on Monday said it was suspending a plan by AT&T Inc to end certain discounts for so called special-accessservices for wholesale clients after some of its customerscomplained.

The decision came a day before AT&T, the country's biggesttelecommunications service provider, had planned to eliminatecertain long-term contracts for high-speed network connectionsbased on older technologies. The plan was part of its effort toupgrade its network to Internet Protocol technology.

But some customers had objected as they would no longer beable to avail themselves of the discounts that came withlonger-term plans.

As a result of the FCC, the U.S. telecommunicationsregulator, said it was suspending AT&T's plan for five monthsand opening an investigation due to "substantial questionsregarding the lawfulness of AT&T's tariff revisions that requirefurther investigation."

In an order published on its website the FCC cited petitionsfrom companies including Sprint Corp, Level 3Communications Inc and Windstream Holdings Inc.

These companies had asked the FCC to reject or suspendAT&T's proposed revisions as they argued that it wouldeffectively result in substantial price increases because a lackof competition in this area would give them no other choice.

Sprint, the No.3 U.S. mobile service provider, welcomed theFCC decision. It said AT&T had sought to raise its prices by asmuch as 24 percent and noted that the disputed services areessential to financial services, retailers, manufacturers andeducational institutions as well as wireless service providers.

After the FCC filing AT&T said on Monday that it would continue to meet its customers and "remain flexible inattempting to meet their needs" as it upgrades its network.

Stifel Nicolaus analyst David Kaut said in a research notethat he doubted the FCC would ultimately block AT&T's move toInternet-based services.

But he said that AT&T would likely end up having tonegotiate with its customers over what they consider areasonable transition period from the older technologies.

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