Courts

Eighth Circuit to Hear Challenges to FCC's BDS Decision

Appeals had been filed in three federal courts 6/23/2017 10:40 AM Eastern

Legal challenges to the FCC's business data services reforms have been consolidated in the U.S. Court of Appeals for the Eighth Circuit.

Petitions to deny some or all of the FCC's BDS Report and Order updating the framework for regulating business data services had been filed in three separate federal appeals courts.

Those appeals came from from CenturyLink, Citizens Telecommunications Company of Minnesota and a consortium of telecoms including Sprint.

The D.C. Circuit is the one with primary jurisdiction over telecommunications, but in the case of multiple filings, the U.S. Judicial Panel on Multidistrict Litigation holds a lottery to determine the venue.

CenturyLink told the U.S. Court of Appeals for the Fifth Circuit that the FCC's regulation of rates on DS1 and DS3 service in areas deemed noncompetitive was arbitrary, capricious, an abuse of discretion and otherwise illegal. It said the FCC forced those price caps on competitive carriers despite evidence the cost of service had actually gone down.

Citizens Telecommunications Co. of Minnesota, another competitive carrier, had the same complaint, though it lodged it in the Eighth Circuit.

Finally, Sprint, INCOMPAS, Windstream, BT America, and Granite Telecommunications, filed in the U.S. Court of Appeals for the D.C. Circuit. They said the whole order is arbitrary, capricious, an abuse of discretion, a violation of notice-and-comment requirements, and a violation of the Communications Act and the Constitution.

The FCC on April 20 adopted a BDS Report and Order, under new chairman Ajit Pai, declaring the broadband business data services market generally competitive -- a distinct departure from the more regulatory proposal of Pai's predecessor, Tom Wheeler, who had concluded the market was insufficiently competitive -- and deregulated the rates incumbent providers can charge for services like wireless backhaul, credit card readers, ATMs and institutional hookups to schools and libraries.

Groups like INCOMPAS argued that the final order was sufficiently different from the rulemaking proposal -- for one thing the notice was based on the presumption that the BDS market was insufficiently competitive, while the order was based on the presumption it was generally competitive -- to require gathering new comment it before voting, which the FCC did not do.

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