Incompas is firing back at CenturyLink’s claims that its joint business data services (BDS) pricing framework proposal is flawed, calling the telco’s claims “misleading.”
After the pair submitted an initial proposal to the FCC in April, Verizon and Incompas in June outlined eight additional elements that they said provided a framework for BDS. This latest proposal builds on that framework, they said.
In its latest proposal on BDS to the FCC, Incompas and Verizon said that the FCC should set price caps on TDM-based BDS in areas served by price cap ILECS.
Joined by fellow telcos Frontier and FairPoint, CenturyLink filed a letter in response to this proposal in which it claimed that the rate reductions should only be required “if ILECs’ average cost of providing service had declined steeply since 2005.”
The telco added that its “operating expenses have fallen at a much slower rate than the demand for its services causing CenturyLink’s average cost of providing service to steadily climb.”
Incompas countered CenturyLink’s claims by saying that they are “inconsistent with prior statements by CenturyLink leadership” and as a result the FCC should “find that the proposed rate reduction is necessary to correct the failure to make productivity adjustments to the rates of TDM-based services for more than ten years and to restore effective price cap regulation for TDM-based BDS offerings.”
Additionally, Incompas says that the FCC should ignore CenturyLink’s letter because claims of rising BDS costs don’t match the telco’s own financial statements. Specifically, Incompas cites how CenturyLink’s CFO Stewart Ewing called out different facts about its wholesale results.
When asked about the potential impact of BDS reform, Ewing said “it’s the wholesale revenue basically, and its [sic] high margin so there aren’t a lot of continuing incremental expenses associated with providing that service. It’s mostly in the investment that was required to build a service out. There’s some maintenance costs, but it’s probably pretty minimal.”