Default FCC halts AT&T plan to raise Internet prices on Sprint and other rivals

The FCC halted a move by AT&T to artificially inflate market costs for competing carriers like Sprint, Verizon, and T-Mobile. AT&T's plan included tariff revisions that would raise competitors cost for backhaul as much as 24%. The end result would be increased cost to consumers and a less competitive market in which AT&T would be more likely to thrive. AT&T wanted to make the rate increase effective 12/10/13, but the FCC suspended it for five months while it investigates further..."There are substantial questions regarding the lawfulness of AT&T’s tariff revisions that require further investigation," the FCC said.

In a recent congressional hearing, AT&T Senior VP James Cicconi was asked how his company could raise prices 24 percent if it was operating in a competitive market. "I don't think we've raised prices; I think we eliminated some rate plans," Cicconi said.

Harold Feld said the FCC decision shows that new chairman Tom Wheeler "is not going to let AT&T rush him. This was a test." At first, AT&T argued that it didn't even need FCC approval to raise rates, but the FCC forced the company to file a request, Feld said.

That doesn't mean AT&T won't ultimately be able to raise prices, though. Telecom investment firm Stifel said it "doubt[s] the FCC will ultimately prevent the phase-out outright, though we wouldn’t be surprised if it seeks changes to lighten the fallout somewhat."

Read the full editorial by Jon Brodkin here
Watch Harold Feld explain special access here