Statement of Commissioner Mignon L. Clyburn
Re: Special Access
While special access may not be that sexy topic everyone is tweeting about or 
some popular new mobile application downloaded by millions, it is indeed important to 
every single consumer.  When they use that ATM machine, swipe their credit card at the 
gas pump, or access those new, fun mobile apps on their smart phone, chances are those 
services are being delivered because of the connections that special access provide.  
These connections ensure a level of quality and speed that millions of businesses rely on 
every day to serve consumers in many sectors of our economy.  
Some argue that special access uses the technology of the past; therefore, we 
should not waste our time discussing it, much less fixing a system that we know is 
broken.  Others say that, until you know what to replace your current pricing flexibility 
rules with, you should leave this imperfect system in place.  I don’t agree with either of 
these views.  First, the evidence we have collected to date demonstrates that our pricing 
flexibility rules aren’t working.  Knowing this, it would be irresponsible and inconsistent 
with our obligations under one of our governing statutes, the APA, for us to continue to 
allow them to operate.  While we don’t have a permanent replacement for the pricing 
flexibility framework ready for implementation at this time, carriers will have the 
opportunity to make individual demonstrations for pricing flexibility under the widely 
accepted market power analysis we use for our forbearance decisions and merger 
analysis, just like the Department of Justice and the Federal Trade Commission do in 
their review of proposed mergers.  Moreover, our staff is in the process of preparing a 
mandatory data request that we expect will result in additional and necessary information 
that will assist us in our reform efforts, including implementing a new, proper framework 
for pricing flexibility petitions.   
As for the claims that there is no harm to leaving a broken system in place, the 
evidence in this Order demonstrates otherwise.  Price cap regulation is designed to ensure 
that rates are just and reasonable.  Flexibility from that regulation (i.e., deregulation) 
should only occur where there are disciplinary forces of effective competition so that 
rates continue to be just and reasonable.  This applies to both flavors of deregulation 
under the current pricing flexibility rules.  Those that obtain Phase I flexibility (which 
allows carriers to offer lower rates than their tariffs on an individualized basis), have the 
capability to not just lower their prices, but they can do so by targeting potential 
competitors, further entrenching their own market positions.  For those that obtain Phase 
II flexibility, they have the capability to unilaterally increase prices in those areas that do 
not have effective competition.  As discussed in this Order, there is significant evidence 
that competition for special access services has not materialized throughout the areas 
granted flexibility.  Given the ongoing demand for special access services and the fact 
that it’s consumers who are ultimately paying those higher prices, I fully support the 
suspension of our pricing flexibility rules and our ongoing review of the prices, terms and 
conditions.  
This agency has devoted significant resources to reform the Universal Service 
Fund over the last two and a half years—which is an approximately $9 billion a year 
system. Estimates of the special access market are anywhere between $12-18 billion 
annually.  Given its size and importance in delivering services to consumers and the fact 
that this proceeding has been outstanding for seven years, I support the efforts that are 
being made to adopt a data collection order within 60 days and the completion of our fact 
finding and decision-making in this proceeding next year.  I want to thank the Chairman 
for devoting staff resources towards these goals and adding specificity of our timeline for 
completion of this proceeding in the Order, including a specific timeframe for the 
mandatory data request.