Six of the nation’s largest telecom service providers are seeking big changes to the current plans for FCC business data services regulation. At issue is the huge volume of data on which the FCC based its plans and which the carriers says is “irretrievably flawed.”
Carriers making the filing with the FCC last week include AT&T, CenturyLink, Frontier, FairPoint, Consolidated and Cincinnati Bell.
Business Data Services Regulation
The data in question was collected from a wide range of service providers in 2013 as part of a long-pending proceeding originally referred to as the “special access” proceeding. The data collection process was undertaken to gauge the state of competition in the business services market. An analysis based on that data conducted by Dr. Marc Rysman found that many areas lacked competition.
The six service providers say competition existed in 22 times more census blocks in 2013 than the FCC business data set shows. This assertion is based on an analysis of new data recently submitted to the FCC by four of the nation’s largest cable companies – including Comcast, Cox, Charter and Time Warner Cable.
Ethernet Over HFC is Key
The cable companies initially did not include Ethernet over HFC services when they submitted information to the FCC about where they offered business data services in 2013. The data recently submitted by the cablecos includes the Ethernet over HFC data. According to the cable companies, the Ethernet over HFC services were widely available as of 2013.
The telecom service providers’ assertion about wider availability of business data services is based on an analysis that includes the Ethernet over HFC data.
The filing made by the telecom service providers notes that after receiving the data about Ethernet over HFC offerings, the FCC dismissed that data, arguing that Ethernet over HFC was a “best effort” service and therefore should not be included in the analysis of business services competition. But according to the telecom providers, Ethernet over HFC is not a “best effort” service and should be included in the analysis.
Because the business services market would be more competitive if the Ethernet over HFC data were included, the telecom service providers argue that the FCC should rescind portions of the further notice of proposed rulemaking (FNPRM) that is currently under consideration. The filing does not specify which aspects of the FNPRM the FCC should rescind. But it would appear that many of the recommendations in the FNPRM were based on the assertion that competition for business services was lacking in many areas.
FNPRM recommendations would potentially regulate all providers of business data services – including telecom providers, cablecos and others – and all types of business data services would be subject to regulation. In the past, business data services regulation applied primarily to TDM-based services provided by incumbent telcos.
Several years ago the FCC relaxed those regulations in markets that were deemed to be competitive. But the commission later ceased deregulating any new markets while it considered complaints from competitive carriers, who argued that the market was not as competitive as the FCC believed.
In the FNPRM, the FCC also proposes prohibiting certain types of contracts, including contracts requiring volume commitments to avoid a penalty.
Verizon Didn’t Sign
One major telco that did not join with the others in signing the petition filed last week with the FCC is Verizon. That company previously made a proposal with competitive carrier organization INCOMPAS that called for the FCC to play a greater role in overseeing the business data services market, but which did not discuss making certain types of contracts illegal.
Verizon buys business data services from other network operators to support its wireless business, and the carrier apparently has determined that it has more to gain from business data services regulation on that side of the business than it has to lose on the traditional telecom side of the business.