CenturyLink, Frontier say FCC’s backing off on BDS proposal was the right thing to do

FCC headquarters
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A coalition led by CenturyLink, Frontier and other mid-tier telcos called Invest in Broadband for America has praised the FCC’s decision to not make a decision on its business data services (BDS) proposal during its November monthly meeting. 

FCC Chairman Tom Wheeler took BDS and other key issues like set top box reform off the FCC’s November meeting agenda on Thursday following calls from Republican lawmakers to not act on complex issues as the new presidential administration takes hold.

“The FCC did the right thing by not pushing this proposal through before the next administration takes office,” said Kathleen Abernathy, EVP of external affairs for Frontier Communications, in a release.

RELATED: FCC takes BDS proposal off November agenda as presidential transition ramps

Citing President-elect Trump’s campaign statements about creating jobs being a priority, the coalition said the new administration should consider preserving businesses’ ability to invest in broadband in all parts of the U.S.— particularly in rural areas—“as an effective strategy to not only ensure that existing jobs are safe, but to help to create new ones.”

Since it emerged in October, Tom Wheeler’s revised BDS proposal had been nothing but controversial. Traditional telcos and cable operators argued that the new regulations would cause them to reduce network investments, while competitive providers said the measures would ensure fair pricing for business customers. 

While the proposal called for a light-touch regulatory regime for next-gen Ethernet and packet-based services, for which new competition from cable and CLECs is emerging, TDM services would continue to be governed by existing “price cap” regulation.

CenturyLink and Frontier have been outspoken critics of Wheeler’s BDS proposal, saying it could reduce investments in new broadband business service facilities.

Frontier said in a recent filing (PDF) that the FCC’s draft BDS proposal could “unduly affect mid-size ILECs like Frontier that do not have a wireless or significant CLEC presence,” adding that it “would be deeply harmful to investment in American broadband connectivity and jobs.”

Dan McCarthy, CEO of Frontier asked the FCC to consider an additional transition period for midsize ILECs as well as a lower rate of reduction.

CenturyLink claimed the BDS proposal would have forced it to reduce Ethernet rates in the telco’s eight interstate service guides by between 37 percent and 89 percent.

Other regional telcos like Cincinnati Bell, which operate mainly in Cincinnati and a few other areas, took it a step further by suggesting that mid-sized telcos should be exempt from FCC’s BDS rate reduction proposal. The service provider said that the large wireless operators that purchase wireless backhaul circuits have greater leverage over small carriers in terms of dictating pricing, for example.

Wheeler’s BDS proposal could potentially be altered or reworked completely when Donald Trump takes office and appoints a new chairman of the FCC. It is expected that Tom Wheeler will likely step down after President Trump takes office in January.