ILECs, Critics Spar as BDS Comments Due at FCC; AT&T Hits Incompas/Verizon

Parties skirmished over the business data service market and regulation, as comments were due Tuesday in the FCC BDS proceeding in docket 16-143. ILECs and their allies urged the commission to recognize the BDS market is competitive and reduce regulation, while rivals and other critics said the agency should fix what they see as a broken marketplace. AT&T also panned what it said was the supposed "compromise" between Incompas and Verizon, which it called a "sometimes ILEC."

Meanwhile, Sprint opposed and USTelecom supported an ILEC motion to strike "flawed" cable data and related analysis from the record, and a consultant said the motion put commission proposals at risk. In their motion, AT&T, CenturyLink, Cincinnati Bell, Consolidated Communications, FairPoint Communications and Frontier Communications cited recent cable filings showing much more BDS competition than previously thought (see 1606170038).

USTelecom said its survey and FCC industry data showed business customers were benefiting from competition and "shifting frequently" among providers and services "in a market characterized by rapid technological change and exploding demand" for greater capacity. "What the nation needs is additional facilities-based investment in fiber infrastructure and IP technology if it is to remain competitive in the global marketplace and take full advantage of new 5G wireless services," said President Walter McCormick in a release. "The goal of this proceeding should be to encourage that investment, encourage facilities-based competition, and to eliminate regulatory barriers to investment and competition."

The Fiber to the Home Council Americas said the FCC is faced with the choice of continuing policies that had "resulted in increased supply and falling prices" for access to high-capacity fiber, or imposing "regulatory red tape" that impedes investment in such deployment. "The FCC’s own notice in this proceeding found that for above 50 Mbps -- BDS 'competition is present…in many circumstances,'" emailed FTTH CEO Heather Burnett Gold. "In support of this premise, the Council is submitting additional data as part of its filing. Since all-fiber networks are new deployments in most instances, no provider has an inherent advantage in providing fiber-based services. Further, because all-fiber networks are critical infrastructure for the provision of high performance BDS to commercial and institutional customers, mobile and fixed wireless providers, and wholesale carriers, the Commission should be attempting to facilitate (rather than erect barriers to) investments by providers to deploy these networks."

But Competify said the BDS market may finally be poised to get some relief. "The comments filed today by COMPETIFY’s many Partners for the Cure outline the competitive prescription for the cure," emailed the group. "For well over a decade, the chronic broadband access control plaguing the BDS market has cost the economy $150 billion and for the first time, we have a framework that will deliver the benefits of competition, innovation and good health to this critical broadband input." Competify members include: Ad Hoc Telecommunications Users Committee; Broadband Coalition; BT, Competitive Carriers Association; Computer & Communications Industry Association; Incompas; Institute for Local Self-Reliance; Level 3; Open Technology Institute at New America; Public Knowledge; the Schools, Health and Libraries Broadband Coalition; and Sprint.

CCA urged the FCC to move forward “expeditiously” to complete the proceeding, in a news release. “For too long, the largest dominant local exchange carriers have been charging supra-competitive prices,” said President Steve Berry. “Coupled with onerous and anticompetitive contractual terms, competitive carriers have suffered at the hands of their biggest competitors. CCA supports the FCC’s action to break this cycle, however, the FCC must ensure that all BDS, including high-capacity Ethernet services, is available at competitive rates.”

AT&T said the record evidence provides no basis for reregulating BDS, or mandating price reductions, which Incompas and Verizon suggested in filing a proposed framework (see 1606270058). "It is that evidence, not preconceived assumptions that are belied by the facts or pretend 'compromises' between a CLEC and a sometimes ILEC -- both of them net purchasers of BDS -- that must control the decision in this docket," AT&T said in its comments, a summary of which it emailed to reporters. "Having shed substantial portions of its wireline operations, and with a pending purchase of XO Communications, Verizon, like Sprint, has become a net purchaser of BDS. Its joint proposal with Incompas is thus not a compromise, which requires two parties with divergent interests. It is simply joint advocacy to advance their common interests."

The ILEC motion to strike cable data and analysis is the "latest effort to delay action on the massive overcharges and oppressive terms and conditions that BDS purchasers have suffered for more than a decade," said a Sprint opposition. "Incumbents have failed to identify any valid reason why cable operators’ supplemental data submissions should deter [FCC] consideration of a new framework for regulating the broken BDS marketplace, and have not identified any prejudice the supplemental cable data have caused or will cause them."

But USTelecom said the motion picked up on a recent filing it made and further showed why the FCC should have granted more time to file BDS comments, as requested by NCTA. "Despite clear evidence that key data showing the presence of facilities capable of providing BDS were missing from analyses in the record on which [FCC proposals and analysis] were based, the Wireline [Bureau] tersely denied NCTA’s motion," the ILEC trade group said in a recent filing. "This Motion explains in greater detail why the Bureau should have not only granted more time for analyses to be rerun and comments to be filed, but that its failure to do so would be reversible error if the Commission were to proceed to a Report and Order that relies on reports and analyses based on flawed, incomplete data."

The "entire FCC proposal was placed in serious jeopardy" by the ILEC motion because its proposed rules "were based on inaccurate industry data which significantly understates the number of competitive markets," said CCMI consultant Andrew Regitsky in a Monday blog post. FCC Chairman Tom Wheeler "has stated that he plans on completing the BDS proceeding by the end of this year. If he grants time for the industry to analyze the new data it would put the kibosh on that hope. It is an interesting dilemma for him and the entire Commission and is the first serious barrier this year to his expansionist plans." Regitsky said. "It could be a rocky Fall."