Why Are AT&T and the FCC in Another Head-to-Head ASSAULT?

AT&T (NYSE:T) and the Federal Communications Commission are set to enter a second big regulatory battle after the former’s denied bid to acquire T-Mobile last year. The agency is voting on an order that will affect how much carriers like AT&T can charge for access to key broadband infrastructure, and according to Politico, an order circulating at the commission denies AT&T’s petition for regulatory relief in the matter.

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AT&T is said to want relief from special access price caps in the San Francisco and San Antonio markets, with the carrier arguing that denying price flexibility will affect the amount of capital carriers have to spend on upgrading infrastructure.

The FCC contends that current pricing flexibility rules are not working as intended. “There are serious allegations that this mismatch is hindering competition, causing real harm to American consumers and businesses, and slowing investment and innovation,” an FCC spokesman said. AT&T is also arguing that the FCC’s handling of the issue is unfair and may violate the Administrative Procedure Act, and suggested it could take the legal route against the agency.

A coalition called NoChokePoints that represents competitive carriers and associations that rely on special access lines, including Sprint (NYSE:S), Cricket (NASDAQ:LEAP), and advocacy organization Computer & Communication Industry Association, filed a legal petition last July asking the FCC to finish its 2005 special access reform rule making within six months. In January, the groups withdrew the petition “based on recent discussions with the FCC regarding its intention and plans to move forward with and complete the special access services rulemaking,” according to a court document.

Shares of AT&T (NYSE:T) closed higher 0.40% to finish Friday at $35.17 per share.

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