CenturyLink, Frontier lead new special access coalition targeting BDS proposal

CenturyLink (NYSE: CTL), Frontier Communications and a group of service providers have formed the "Invest in Broadband for America" coalition as the latest effort to encourage FCC to reconsider its business data services (BDS) proposal.

Joining CenturyLink and Frontier in this effort are Cincinnati Bell, Consolidated Communications and FairPoint Communications. The group, which represents mid-sized service providers, says that by combining their efforts they can preserve critical network infrastructure and competition in the business broadband market.

John Jones, CenturyLink senior vice president for policy and government relations, said in a release that the FCC needs to make decision by getting the most "accurate data."

"What is at stake here is the definition of 'competition,' Jones said. "That definition will have a substantial impact on the telecom and national economy for years to come."

Kathleen Quinn Abernathy, senior VP of external affairs for Frontier, took it a step further to say the FCC's BDS proposal is designed to benefit wireless operators' future 5G deployments, which will require fiber-based backhaul facilities.

"This is the same wireless industry that increasingly relies on our robust fiber build-out to move data traffic from smartphones to the public network and has as much as 10 times the earnings of the wireline industry," Abernathy said. "Without investment into the backhaul infrastructure by the wireline industry, the future of 5G technology could be rendered useless."

In June, this group of providers filed a motion to strike what it says is an "irretrievably flawed" data framework in the FCC's BDS proposal, saying that cable operators understated their capabilities to serve the Ethernet services market.

The group said that several major cable providers, including Charter Communications (NASDAQ: CHTR), Comcast (NASDAQ: CMCSA) and Cox Communications, did not clearly or fully report that they were able to provide at least 22 times more business data services using metro Ethernet than were reflected by the original data in 2013.

Comcast revealed that it had not reported locations connected to nodes that it updated to provide Ethernet-over-HFC service as of 2013. The MSO later filed a list of all business locations that could be served via Metro Ethernet-enabled head ends. Likewise, Cox Communications, which was one of the first MSOs to enter the business services market in the 1990s, had 28,000 fiber-lit buildings and 300,000 HFC-serviceable buildings as of early 2014.

According to data collected by the coalition, the cable industry's capital investment over the past two years was estimated at $6 billion and competitive fiber providers invested an estimated $9 billion during that same time -- totaling a $15 billion in competitive investment over two years.

Later, in a filing made by AT&T and a separate joint filing from CenturyLink, Consolidated, FairPoint and Frontier Communications, the group criticized the joint Verizon/Incompas BDS proposal.

Joined by AT&T (NYSE: T), the five service providers said the Verizon/Incompas proposal emerged as an effort to advance their own interests at a time when Verizon and Sprint (NYSE: S) had sold off their key wireline assets. As a result, the group contended that Verizon and other Incompas members would start purchasing more special access services to deliver business services and for backhauling wireless traffic.

AT&T said that the Verizon/Incompas proposal is "simply joint advocacy to advance their common interests."

However, competitive carriers like Level 3 Communications, which have built out sizeable fiber networks, said that the challenge lies in extending facilities to serve business customers that need sub-100 Mbps services.

Level 3 said one of the key issues in making a business case work for sub-100 Mbps services is that the fiber splice points on its network "usually exceeds the construction feasibility limits for bandwidths of 100 Mbps and below."

For more:
- see the release

Related articles:
CenturyLink: Cable operators have 22 times more Ethernet-capable locations than BDS data lists
Level 3: Verizon/Incompas proposal will help the FCC establish a sound business data services regulatory regime
AT&T, CenturyLink slam Verizon/Incompas special access pact
Verizon, Incompas propose new 8-point special access plan, encourage facilities-based competition
CenturyLink sounds off on special access debate, wants cable operators included as competition