Windstream asks FCC to ensure ILECs’ TDM-to-IP transition won’t strand small businesses with high costs

Windstream Business
Pai previously removed BDS price reform from its list of active proceedings on proposed rules.

Now that Ajit Pai has been firmly established as the new FCC chairman, Windstream has made a new plea asking that he consider how business data services (BDS) reform will affect competitive carriers and their business customers.

In a new FCC filing (PDF), Windstream said the FCC should retain safeguards for lower-speed BDS services.

The service provider added that any reform should include a provision that ILECs should provide equivalently priced IP-based replacement services when they decide to turn off a legacy TDM service.

“Consistent with its prior filings in the above-referenced dockets, Windstream expressed its concern that small businesses will be harmed by steps to scale back or even eliminate existing last-mile access guardrails, including regulation of TDM-based special access and the Technology Transitions requirement that ILECs, as a condition of discontinuing a TDM-based service, provide competitive carriers reasonably comparable wholesale access to the Internet Protocol-based (IP-based) replacement service on reasonably comparable rates, terms and conditions,” Windstream said in its filing.

Hybrid off-net, on-net

Windstream has been taking various steps over the past year to expand its last mile fiber network to businesses. The service provider has launched fiber expansions in three key cities—Dallas, St. Louis and Cleveland. Each of these metro fiber expansions leverages existing fiber facilities that were already in the ground.

RELATED: Windstream’s Thomas: On-net building fiber enhances our competitive business service stance

But even with all of those efforts, there’s still a large portion of Windstream's network where it’s not cost-effective to build out fiber. This means it still has to rent facilities to provide lower-speed services to smaller businesses or smaller locations of its larger customers.

“Windstream reiterated that competitive providers need to purchase last-mile connectivity to many locations because it often is not economical to overbuild last-mile facilities, particularly to consumers with business data services demand at or below 50 Mbps,” Windstream said. “This last-mile access is necessary to provide many small businesses, government locations, rural healthcare networks, schools and libraries with a competitive option for business data services.”

During the process of expanding on-net fiber network to serve more customers, Windstream told investors during its fourth-quarter earnings call that it sees itself delivering business services in a “hybrid” mode that includes a mix of off-net and on-net fiber facilities.

BDS reform in danger?

While BDS reform was a key tenet of former FCC Chairman Tom Wheeler’s competition mantra, the reforms were not completed before President Donald Trump took office in January.

Competitive providers voiced support for Wheeler’s proposals, while traditional telcos like AT&T and CenturyLink, as well as large cable operators like Comcast and the new Charter, said the reforms would chill investment in new last-mile facilities.

Critics of Pai are concerned that he could just scrap the reforms altogether, but he has not yet provided any clear answer on what direction the new FCC will take.

Pai previously removed BDS price reform from its list of active proceedings on proposed rules. However, an FCC official told Morning Consult in a January report that these actions are “typical” when a new presidential administration takes office.

He was also one of the two opponents to Wheeler’s proposals to reform the BDS market, saying that there was plenty of competition from CLECs and cable operators.

“Our goal should be ubiquitous competition, not universal rate regulation,” Pai said in prepared remarks in April when the FCC voted to further review the BDS issue. “Our guide should be the data—wherever it leads us—not an ideological drive to regulate.”