CenturyLink Blasts Verizon Competition 'Doubletalk' on XO Deal, BDS Proposals

CenturyLink accused Verizon of engaging in "doubletalk" on competition by selectively stressing the positives or negatives of the business market in different regulatory proceedings for its own advantage. CenturyLink cited a recent Verizon white paper that said Verizon's planned takeover of XO Communications wouldn't harm competition because of a wide range of fiber competitors in the business market (see 1608300036). But Verizon has pointed to the general lack of competition in making proposals with Incompas for regulation of business data services (BDS), CenturyLink said.

“Verizon is disingenuous in playing both sides of an issue to its advantage in two different FCC matters,” said CenturyLink Senior Vice President John Jones in a release Friday from the midsize telco Invest in Broadband for America coalition, which opposes the Verizon/Incompas proposals. “Verizon can’t have it both ways -- arguing that the level of competition is robust when it suits its purposes, then making the exact opposite argument to seek out a government-mandated discount on the rates it pays.”

CenturyLink told the FCC of its objections to the Verizon/Incompas BDS proposals in light of the views Verizon expressed in its white paper arguing for regulatory approval of its XO purchase. "In stark contrast to the dour portrayal of competition that Verizon and INCOMPAS have advanced to justify their draconian regulatory proposals" for BDS, the white paper "highlights the intense competition in the BDS marketplace," said a CenturyLink filing in docket 16-143. The white paper "undermines the factual premises" of the Verizon/Incompas proposals and any claim those proposals are an appropriate basis for new regulation, CenturyLink wrote.

CenturyLink cited Verizon as saying "there will continue to be extensive" BDS competition "provided over fiber, cable, and copper by a wide range of providers" after the planned XO deal. The white paper observations are "particularly relevant" to CenturyLink because XO is "heavily concentrated" in CenturyLink markets, the filing said. The competitive BDS market Verizon describes for its XO acquisition "hardly warrants regulatory intervention" on that deal, but also undercuts the "heavy-handed" Verizon/Incompas proposals in the BDS proceeding, CenturyLink said.

Verizon said CenturyLink's characterization of its proposal with Incompas is wrong. "Our joint proposal is not a commentary on the current state of competition," said Verizon Senior Vice President Kathy Grillo in a statement. "It is a compromise intended to resolve an issue that has been overhanging the industry for years. 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.”

Various parties continued to lobby the FCC in the BDS proceeding, including Lightower Fiber Networks and Unite Private Networks, which met separately with Commissioner Michael O'Rielly and a counsel, and with aides to Chairman Tom Wheeler and the other commissioners. They discussed proposals that could subject competitive fiber providers' prices to regulation through application of benchmarks based on ILEC costs and prices, and how that would harm their efforts to deploy new fiber, including for mobile networks, enterprise customers and community institutions such as schools and healthcare providers, said a Lightower/Unite filing.

Sprint discussed detailed proposals for Ethernet benchmark enforcement, said a filing by the wireless carrier on a meeting with Wireline Bureau staffers. Cox Communications opposed new BDS regulation, but said if there is such regulation, it should apply only to incumbent telco TDM-based services where they have market power. The cable ISP provides BDS on a private-carriage basis and objected to possible adoption of wholesale discounts based on avoided costs, in a filing on meetings with aides to two commissioners. Marius Schwartz, a Georgetown University economics professor, submitted a letter noting that he co-wrote a declaration on behalf of the American Cable Association that said FCC regulation of nonincumbents "based on their attaining market power would be contrary to sound economics and antitrust policy."