US FCC scraps most business data service regulations

Getty Images

Getty Images

Under FCC Chairman Pai's business broadband deregulation order, BDS markets with one competitor "nearby" or within "a half mile" will be deregulated, a move critics say essentially allows a duopoly and sometimes a monopoly to meet the new Republican FCC's standard for competition. "Despite data collected by the FCC indicating that approximately 73 percent of BDS locations may only being served by one provider, and the Small Business Administration raising serious concerns about its impact on small businesses, the Commission has forged ahead to the detriment of consumers".

Pai described the the existing rules as micromanagement that thwarts competition and holds back long-term benefits for consumers.

"This proceeding was launched in 2005 - a dozen years of deliberation is enough", Pai said. Additionally, the order allows ILECs to offer volume and term discounts, as well as contract tariffs, which are known as "Phase I pricing flexibility" under the FCC's old rules.

It marked a significant step in FCC Chairman Ajit Pai's aggressive agenda to roll back many existing telecommunications rules and Obama era regulations.

"We truly did not anticipate it, but Lewis Carroll gave us a parable on the dangers of overregulation in the communications sector", Pai said. "For several years, the FCC has longed for something akin Alice's garden by seeking a business data services with an array of competitive options".

Democratic FCC Commissioner Mignon Clyburn called the vote a "huge gift for large broadcasters with ambitious dreams of more consolidation". The regulations require incumbent local exchange carriers (ILECs) to lease portions of their networks to smaller competitive local exchange carriers (CLECs) like Sprint and Level 3 at regulated rates to boost competition. "We must build faster, more affordable networks of the future", said Pickering. "If it's too low, competitive providers won't have an incentive to build their own facilities if they can cheaply use someone else's network". Twenty-First Century Fox Inc in September challenged the FCC rule in court. Comcast Corp said the vote would help minimize "burdensome and investment-killing regulations, specifically on new entrants".

However, criticism of the new order is already mounting even within the FCC itself.

The new make-up of the FCC has drawn the ire of progressives and small business proponents who have seen the commission move to kill off net neutrality, and consistently advocate for the large ISPs.

"Business data services, or special access, are important to the functioning of business and anchor institution in each and every city and town in America", Clyburn said. Clyburn predicted "immediate price hikes", especially in rural areas. "Instead of looking out for millions of 'little guys, ' the majority has again chosen to side with the interests of multibillion-dollar providers", she said in her dissenting opinion.

The FCC's recent shift on BDS deregulation embraces "debunked theories that competition, despite high barriers to entry and more than a decade of evidence, is just around the corner", Phillip Berenbroick, senior policy counsel at Public Knowledge, said this week.

The FCC today made optional a previously mandatory requirement that compelled the officers and board members of noncommercial educational (NCE) stations to report personal information.

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