US Regulators Reject Amended Interconnect Agreement for Amazon Data Center

Introduction

The Federal Communications Commission (FCC) has rejected the amended interconnect agreement between the Washington-Oregon Interconnect Region (WOIR) and an Amazon data center in Ashburn, Virginia citing ongoing concerns about the agreement's impact on local competition and the lack of adequate reciprocal compensation.

Details of the Amended Interconnect Agreement

The amended interconnect agreement proposed a settlement to an ongoing dispute between the WOIR and Amazon, which had previously been rejected by the FCC in 2021.

The latest settlement would have allowed the WOIR to exchange traffic with the Amazon data center at a price of $4.25 per month, per port, with Amazon offering a reciprocal rate of $0.50 per month, per port to the WOIR for access to its network.

FCC's Decision

The FCC determined that the reciprocal compensation rate proposed by Amazon was inadequate, as it did not reflect the relative value of the two companies' networks and would have given Amazon an unfair competitive advantage.

The FCC also rejected the proposed settlement, stating that "it does not adequately address the competitive concerns associated with this transaction." The FCC concluded that the settlement "would not serve the public interest" and rejected it.

Implications for Amazon and the WOIR

The FCC's rejection of the amended interconnect agreement is a setback for Amazon, which had been seeking to expand its data center presence in Ashburn, Virginia.

The decision also leaves the WOIR without an agreement to exchange traffic with the Amazon data center, which could lead to higher costs for customers.

Conclusion

The FCC's rejection of the amended interconnect agreement between the Washington-Oregon Interconnect Region and an Amazon data center underscores the importance of ensuring fair competition and adequate reciprocal compensation in the telecommunications industry.

The decision also highlights the FCC's commitment to protecting the public interest and ensuring that all providers have the opportunity to compete on a level playing field.