FCC’s Pai puts another nail in the BDS reform coffin

Ajit Pai (FCC)

FCC Chairman Ajit Pai has removed business data services (BDS) price reform from its list of active proceedings on proposed rules, marking another sign of the new Republican-dominated leadership’s light-touch regulatory mentality.

“The items could be put back on circulation following modifications,” an FCC official told Morning Consult in a report, adding that action is “typical” when a new presidential administration takes office.

While the commissioners could revise the BDS rules, if they do they would likely be radically different than what Wheeler proposed. Fellow Republican Commissioner Michael O’Rielly also opposed the BDS proposal.

When the FCC switches to a 3-2 Republican majority, BDS and other key issues like set-top box reform will be further endangered.

BDS reform was one of several key issues that Pai’s predecessor Tom Wheeler championed for during his three-year tenure as FCC chairman.

After Republican Donald Trump was elected in November, a group of Republican lawmakers asked FCC Chairman Tom Wheeler to refrain from acting on "controversial" issues such as BDS during his final months in office.

RELATED: Pai’s ascension to the FCC chairman throne heralds direct threat to net neutrality, BDS reform

BDS covers a set of wholesale services that traditional telcos and, increasingly, cable operators sell to competitive providers to address off-net locations for their services.

Wheeler’s goal was to ensure incumbent telcos would not impose high wholesale service prices and challenging terms on smaller operators, and not surprisingly his proposal received mixed reactions from traditional telcos and competitive providers.

On one hand, 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.

Chip Pickering, CEO of INCOMPAS and a former Republican member of Congress, said in a statement that abandoning BDS reform could result in higher business service prices.

“Failure to fix the broken business broadband marketplace has saddled America with consolidation, not competition, and poses a serious threat to infrastructure goals necessary to putting America first in the race for faster, more affordable networks of the future,” Pickering said.

Pickering added that “without real broadband choice, business customers—including hotels, schools, hospitals and libraries—will remain trapped by monopoly rents.”