CenturyLink, Frontier Seek 'Nondominant' FCC Treatment of Telco BDS Offerings
CenturyLink and Frontier Communications asked the FCC for "nondominant" treatment of price-capped incumbent telcos' business data services (BDS) at all capacity levels. The proposal would free large ILECs from "stultifying tariffing requirements and ex ante regulation," creating a "level playing field" with competitors that don't face such burdens even when they have higher BDS market shares, said the two incumbent telcos in a filing posted Tuesday in docket 05-25.
They called for scrapping "outmoded tariff and price cap regulation" and certain other obligations of telco BDS offerings. Nondominant treatment "is the next logical step toward the congressionally mandated goal of replacing regulation with competition where possible, and it is compelled by the Commission’s long-standing, bipartisan jurisprudence concerning non-dominant treatment of entities that lack market power," CenturyLink and Frontier wrote: "Competitive BDS-capable facilities already are ubiquitous.”
Incompas, which represents BDS new entrants, scoffed at the proposal. "The suggestion by CenturyLink and Frontier that there is plenty of competition in the BDS market does not match reality," said General Counsel Angie Kronenberg in a statement. "Just ask any small business currently trapped by the monopoly telco where over 3/4 of U.S. locations only have one provider, and they are forced to live under the harsh reality of market power abuse that rigs prices and brings terrible service. Ironically, CenturyLink is in process of purchasing one of the nation’s few competitive providers, consolidating the BDS market even further." CenturyLink plans to buy Level 3.
The FCC is looking to draft a deregulatory BDS order, industry representatives say, and AT&T has made its own detailed proposal for minimal regulation (see 1703140046 and 1703170018). An FCC spokesman and some other BDS stakeholder representatives didn't comment.
Commissioner Mignon Clyburn said she's concerned about BDS competition. "I’ve acknowledged how important this particular market is," she told us Tuesday after a Lifeline speech at a Multicultural Media, Telecom and Internet Council event (see 1703210045). “I don’t think people realize exactly what it enables, and what the elements [are] that a particular entity needs in order to provision service," she said. "I do have concerns whether the market is a healthy, competitive one -- I have heard too many people say to the contrary. Whatever is circulated, I would look through that lens to ensure that there is a robust, competitive and -- as close as we can get to -- equitable market. And that is hopefully the goal of all involved.”
BT said any BDS regime must comply with World Trade Organization commitments on telecom services. Under the commitments, the U.S. must ensure that Ethernet and TDM tariffs are publicly available, reasonable, nondiscriminatory and cost-oriented, and that anti-competitive safeguards are maintained, with no conditions imposed on access to telecom service use other than those needed to protect public service responsibilities, network integrity and proper service by foreign providers, said a BT filing discussed with FCC staffers.
CenturyLink and Frontier said BDS rivals operate in 95 percent of all census blocks where ILECs offer "special access type service." CLECs are the only BDS suppliers in 13 percent of census blocks, and 99 percent of buildings served only by an ILEC are "close enough to competitive facilities" to face "price-constraining" market discipline, the telcos said.
“There are now multiple competitive alternatives to DSn services, including cable broadband and Ethernet provided over existing cable plant and hybrid fiber-coaxial (‘HFC’) plant, which customers view as functional substitutes for DSn services," CenturyLink and Frontier wrote, in a general reference to legacy DS1 and DS3 circuits providing 1.5 Mbps and 45 Mbps, respectively. "Inter-platform competition will only grow when 5G services offer an additional ubiquitous last-mile alternative." They said nondominant treatment would "promote deployment in rural areas, facilitate negotiation by sophisticated BDS customers, further migration to next-generation IP services, and advance the Commission’s commitment to technological and competitive neutrality by placing price-cap ILECs on an even footing" with various BDS competitors.