Five Democratic senators say FCC's BDS proposal could hamper emerging competitors

FCC headquarters

A group of five Democratic senators sent a letter to FCC Chairman Tom Wheeler saying that the regulator’s proposed business data services (BDS) re-regulation could stop emerging competitors from extending broadband networks to rural markets in states where competition is limited.

The latest warnings come in three new filings with the FCC: One from six U.S. Senators, another from the Governor of Delaware and the last from two U.S. congressmen.

Five senators, including Heidi Heitkamp (D-N.D.), Mazie Hirono (D-Hawaii), Jeffrey Merkley (D-Ore.), Jeanne Shaheen (D-N.H.) and Debbie Stabenow (D-Mich.), signed onto the letter.

In the joint letter, the five senators said that “the policies adopted in the rulemaking must take great care in how it may affect rural areas to make sure it does not deter investments” in broadband infrastructure, particularly in rural areas.

Likewise, Reps. Gene Green (D-Texas) and Bill Flores (R-Texas) said they were concerned that the proposal will delay investment and harm services that rely on the critical infrastructure.

Green and Flores said that the “failure to recognize the extent of competition will likely result in regulations that will deter incumbent, recent, and future providers from investing in BDS, harming providers and consumers alike.”

Separately, Gov. Jack Markell (D-Del.) said it is important for the FCC “to utilize accurate and comprehensive data regarding pricing and availability of broadband within a given geographic area to inform the rulemaking process and ensure that private investment in broadband infrastructure remains strong.”

These letters come after Wheeler distributed his latest BDS proposal. Under Wheeler’s proposal, the regulator calls for a light touch regulatory regime on next-gen packet-based services like Ethernet, but TDM-based services would still be subject to price caps.

Wheeler’s BDS proposal is not listed yet on the FCC’s preliminary agenda for the regulator’s October 27 meeting, but it’s possible an agreement could be reached before that time by taking a lighter regulatory touch.

Lawmakers aren’t the only ones that are speaking out on Wheeler’s BDS proposal.

Besides seeing strong opposition from traditional ILECs like CenturyLink, a number of competitive fiber providers, including Lightower, Lumos, and UPN, also expressed concern over the FCC’s proposals. All three of these service providers have continued to expand their network organically and through targeted acquisitions.

Lightower, for example, just announced 365-route mile fiber expansion project in North Carolina.

As competitors that have been building out new fiber networks over the past five to 10 years in underserved markets, these three service providers say FCC should not impose Ethernet regulations on competitive providers.

“The Business Data Services FNPRM recognizes and articulates that at least since 2002, when AT&T filed its petition that led to these proceedings, the rationale for regulating special access rates has been that, due to the exercise of the ILEC’s market power, the rates have been unjust and unreasonable in violation of Section 201(b),” the three carriers said in a joint FCC filing. “In contrast, the record shows that Competitive Fiber Providers have no market power; rather, they are forced to match or beat the ILEC’s price, unless they offer a compensating enhancement in quality.”

For more:
- see the release
- here’s Markell’s letter (PDF)
- here’s the joint competitive provider letter (PDF)

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