But what would happen in a regulation-free vacuum — essentially the wild west of the communications world — if the nation’s largest telecom company is allowed to operate with impunity? So far, public officials are not asking that question because they’re too busy praising AT&T’s announcements of billions of dollars of investment in new wireless broadband networks, supported with funds from President Barack Obama’s National Broadband Plan.
Because IP networks are regulated differently, they are not subject to rules that encourage universal access by making low-cost options available in under-served communities. The FCC also does not yet have rules for what reasonable exchange costs are with Internet-based communications.
Rules governing the networks that make landlines work prevent AT&T from telling smaller companies that connection exchange rates will suddenly double or triple for calls coming onto AT&T’s network. Without such regulation, AT&T could run an abusive monopoly with these exchange charges, leaving smaller carriers with no choice but to pay up and pass costs onto consumers. This means AT&T’s plan has the potential to drive up prices and drive down competition.