fightingA CenturyLink Verizon business data services feud arose today, with CenturyLink accusing Verizon of “doubletalk” on the issue of business data services (BDS) competition. It’s a topic that is being intensely debated as the FCC considers whether to impose price controls in this market, which includes a wide range of wholesale data services.

CenturyLink notes in a press release that in filings made jointly with competitive carrier association Incompas, Verizon has argued that competition is lacking in the BDS market. But, according to CenturyLink, that point of view is contradicted in a white paper that Verizon submitted in support of its planned acquisition of XO Communications, a competitive provider of BDS services.

“[T]he white paper highlights the intense competition in the BDS marketplace,” comments CenturyLink Vice President of Federal-Regulatory Affairs Melissa Newman in a letter sent to the FCC.

CenturyLink Verizon Business Data Services Positions
Traditionally, large incumbent carriers such as Verizon and CenturyLink have been on the same side with regard to BDS and have fought price controls. But as Verizon’s wireless business becomes increasingly important and the company faces the prospect of purchasing a large amount of data links from other carriers, the company worked out what an Incompas executive has called a “compromise” BDS proposal that supports FCC oversight of pricing for non-competitive markets and services

Verizon’s plan to acquire XO was not driven primarily by a desire to gain XO’s BDS business. What Verizon really wants is XO’s wireless spectrum licenses in frequency bands suitable for 5G deployments. But along with those come the XO BDS business and it’s not surprising that Verizon is trying to assuage FCC concerns that the acquisition would reduce competition in that market.

One other large incumbent carrier besides Verizon that has broken with the pack on BDS is Windstream, which increasingly has emphasized enterprise business services in recent years. Windstream has to buy a lot of circuits from other carriers to gain nationwide scope and according to the company’s chief financial officer, the ratio of Windstream BDS connectivity purchased to BDS connectivity sold is four-to-one.

Verizon Response
Verizon provided a statement to Telecompetitor regarding CenturyLink’s position.

“CenturyLink’s characterization of the Verizon/INCOMPAS joint proposal is wrong,” said Kathy Grillo,  senior vice-president and deputy general counsel, public policy and government affairs for Verizon. “Our joint proposal is not a commentary on the current state of competition.  It is a compromise intended to resolve an issue that has been overhanging the industry for years.”

Grillo went on to say, “We have always maintained that regulation is only necessary where competition does not discipline the market.  Of course, many markets are already competitive.  In markets that are not sufficiently competitive, Verizon and INCOMPAS have offered a framework to address them. Instead of trying to poke holes in the only meaningful compromise on the table, we encourage all stakeholders to work together to find a reasonable path forward.”

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