uscapitolData filed recently by the major U.S. cable companies should be taken into account when FCC business data service rules are revised, argue nine U.S. senators from rural states in a letter sent yesterday to FCC Chairman Tom Wheeler.

“Rural communities depend on robust investments in business data services to connect small business and anchor institutions, support wireless data service and enable economic development,” the senators said. “Without these investments, our rural constituents will face significant challenges in accessing the 21st century global economy.”

The concern is that providers of business data services may decrease their investment in those services if the new FCC business data service rules require the providers to reduce prices. How extensively that happens may depend, in large part, on the information that the FCC uses to determine markets that lack business data services competition.

FCC Business Data Service Rules
The FCC is planning to revise business data service rules  after an analysis of data collected from service providers and their customers in 2013 showed that many areas lacked competition. Major U.S. telcos and cablecos have argued that competition is more extensive than the FCC analysis suggests.

A key issue is that the cable companies did not include Ethernet over HFC services when they initially reported information about their business data services availability in 2013. According to an analysis conducted by six major telcos, the FCC business services report would have found a considerably higher level of competition if cableco Ethernet over HFC services had been included.

Five of those telcos this month joined together to create an Invest in Broadband for America coalition with the goal of obtaining business data service rules that are less stringent than what the FCC has recommended. The five telcos joining the coalition are large incumbent local service providers — including CenturyLink, Cincinnati Bell, Consolidated, FairPoint and Frontier. AT&T initially joined with the other telcos in asking the FCC to consider the cableco Ethernet over HFC data but has not joined the coalition.

Democratic Montana Senator Jon Tester organized the group of senators signing the letter to the FCC. Also signing the letter were seven other Democratic senators, including Maria Cantwell and Patty Murray of Washington, Heidi Heitkamp (North Dakota), Michael Bennet (Colorado), Amy Klobuchar (Minnesota), Bob Casey (Pennsylvania) and Tammy Baldwin (Wisconsin), as well as one Independent senator — Angus King of Maine.

According to analysts at Bernstein Research, the FCC did not include Ethernet over HFC services in gauging the extent of business data service competition because FCC officials believed those  services do not support quality of service guarantees. But according to several telcos and cablecos, Ethernet over HFC does support such guarantees.

This post was updated later on August 3 to reflect changes made to the letter and press release after earlier versions of those documents were provided to members of the press.

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