CenturyLink, Frontier criticize latest Incompas-Verizon BDS rate proposal, saying it's flawed

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CenturyLink and other independent telcos, including Frontier, Consolidated and FairPoint are not wasting time taking aim at the latest business data services (BDS) proposal made by Incompas and Verizon, calling it another flawed effort that merely reflects changes in Verizon’s business structure.

“Far from offering a middle ground that accounts for the viewpoints of all stakeholders, the CLEC-oriented framework proposed at the eleventh hour by Verizon and INCOMPAS reflects the mutual worldview of entities whose business interests have recently come into alignment,” said CenturyLink in an FCC filing. “In short, after restructuring its business model by shedding ILEC exchanges it no longer wants – exchanges several of the Mid-Size ILECs stepped up to serve – and moving to acquire one of the largest CLECs (XO Communications), Verizon has become a large-scale purchaser (and perhaps even a net purchaser) of out-of-region BDS. The fact that CLECs (and only CLECs) immediately lined up behind the proposal shows that this framework is no compromise.”

Earlier this month, Verizon and Incompas submitted new pricing reforms and a competitive market test proposal to the FCC to consider, as the regulator completes their analysis of the business data services (BDS) market.

After the pair’s initial proposal was submitted 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.

CenturyLink again was joined by fellow independent telcos Consolidated, FairPoint and Frontier, all of which previously joined CenturyLink in a motion to strike earlier BDS proposals.

Citing UNE-based competition and Ethernet over HFC platforms, CenturyLink says that the new Incompas/Verizon proposal is one-sided is more “extreme than even the proposals set out” in the FCC’s BDS FNPRM. The telco added that  the “proposal’s utility is further undermined by its improper exclusion of UNE-based competition and so-called “best efforts” cable service that compete with ILEC BDS, reliance on census blocks, and application of an unnecessary and investment-killing 4.4 percent annual productivity factor.”

Instead of regulating rates for service packages that involve competitive and non-competitive markets, CenturyLink suggested that the FCC should “clarify that freely negotiated BDS service packages that include areas deemed to be “competitive” and “non-competitive” are outside the scope of price cap regulation.”

As more competitors, including cable operators like Comcast and Cox increase their fiber investments to deliver Ethernet to more businesses customers, BDS pricing continues to drop . By implementing a light-touch regulatory regime, CenturyLink and its partners say that it has driven competitive providers to invest, which has led to lower priced services.

The telco cites how Cox Communications said that “competition is already driving Ethernet prices down so precipitously” that it is “finding it harder to justify the costs of new fiber deployment.”

For more:
- see this FCC filing (PDF)

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