FCC

FCC's BDS Vote Draws Mixed Reviews

Agency both hammered, applauded for deregulatory move 4/20/2017 12:26 PM Eastern

The FCC heard it from both sides after its vote Thursday (April 20) to deregulate the broadband business data services market on the conclusion that marketplace competition for was generally strong, defining duopolies and "nearby" competition as sufficient.

Related: FCC Approves BDS Reform Item

"[A] robust record, collected during the investigation into Business Data Services, demonstrated that sufficient competition exists in these markets to justify reduced regulatory oversight, which will further incent fiber deployment for these high capacity services," said the Fiber Broadband Association.

For her part, FCC Commissioner Mignon Clyburn, who strongly dissented, saw the issue very differently.

“Instead of taking action to promote competition and deployment, serve the public interest, and prevent the exercise of market power that is a drag on the U.S. economy, chairman Pai and commissioner O’Reilly have approved an Order that doubles down on incumbent market power, forcing businesses, hospitals, schools, and ultimately consumers to pay more for essential connectivity," said Phillip Berenbroick, senior policy counsel at Public Knowledge.

“Wireless networks, which rely on BDS for carrying a portion of their traffic, are also likely to deploy more slowly and reach fewer Americans due to higher prices," Berenbroick added. "Ultimately, these price hikes will be passed on to consumers, and American families and businesses will pay dearly for the green light the FCC has given to the unfettered exercise of market power by dominant telecommunications providers.”

“With today’s vote on business data services, the FCC now stands for Forgetting Choice and Competition,” said Senator Ed Markey (D-Mass.). “Despite data collected by the FCC indicating that approximately 73 percent of BDS locations may only be served by one provider, and the Small Business Administration [it was SBA's independent small business advocary office] raising serious concerns about its impact on small businesses, the Commission has forged ahead to the detriment of consumers.”

INCOMPAS CEO Chip Pickering also disagreed with the vote.

"The pro-monopoly FCC just voted to kick American small businesses where it really hurts, in the wallet," Pickering said. “The FCC is out of touch with consumers, out of sync with businesses and out of step with our nation’s internet infrastructure goals. We must build faster, more affordable networks of the future. But the FCC’s ‘one is enough’ monopoly policy threatens to end decades of innovation and hinders the streaming revolution.

“Outside of the FCC, and a handful of AT&T lobbyists, there is not a single person on the planet who believes we currently have enough broadband competition," Pickering added.

Verizon, one of the incumbents who will get deregulatory help, was pleased.

“Verizon congratulates the FCC and Chairman Pai on concluding the long-running and complex proceeding on business data services," said Will Johson, SVP at Verizon. "This action reflects the intense competition for business communications services that exists in most areas today and will promote investment and the transition to new technologies. We hope the FCC will continue to focus on reforms that promote building tomorrow’s networks.”

CenturyLink, another of those incumbents, was also pleased.

“CenturyLink commends the FCC for recognizing the widespread competition in the business data services market and aligning the commission’s regulations to reflect competitive market realities,” said CenturyLink SVP of public policy and government relations John F. Jones. “Right-sizing these regulations based on a fact-based, data-driven analysis will promote investment in next-generation broadband facilities and help spur economic growth across America.”

Comcast, which could have had its BDS rates regulated under the proposal of Pai's predecessor, saw the new chairman's approach as a net positive.
 
“Today’s action by the FCC is a positive step toward ensuring continued investment in new broadband facilities, driving economic growth, and creating jobs," said Comcast senior EVP David Cohen. "Businesses today have more options for data services at better prices than at any other time in history, and we want the market to remain competitive and innovative for both the benefit of business customers and consumers.  We applaud the FCC’s decision to help the business data market continue to flourish by minimizing burdensome and investment-killing regulations, specifically on new entrants.  As a newer entrant in many markets, Comcast is committed to bringing more services to more business locations throughout the U.S. in the months and years ahead.”

NCTA: The Internet & Television Association said that the BDS deregulation "will further speed the deployment of broadband networks so that all consumers can enjoy the transformative benefits of the internet.”

The American Cable Association saw the BDS dereg as a continuation of pro-competitioin policy.

"ACA applauds today's FCC action to continue its decades-long policy of applying light-touch regulations to competitive providers' offering of business data services (BDS). This longstanding light-touch approach has been a resounding success," said ACA CEO Matt Polka. "Over the past decade, hundreds of ACA's smaller members have entered the BDS market, offering more innovative services at lower prices, and they are now investing billions more to expand their networks and offer even more robust services. By maintaining its policy direction, the FCC will ensure that ACA members' business, community anchor, and wireless provider customers will reap the benefits of all the investment its action will generate."
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