FCC Chairman Tom Wheeler’s business data services proposal is facing opposition from the SHLB Coalition (Schools, Health, Libraries Broadband Coalition) who say that the proposal needs to regulate Ethernet pricing, a key factor for its cash-strapped constituency.
A key point of content for SHLB is that Wheeler’s proposal only applies to TDM-based services. The organization has asked the FCC to consider developing a technology-neutral regulatory construct that takes into consider IP-based Ethernet and existing TDM services.
“The record evidence shows that TDM and IP services are not two separate markets -- they are substitutable services,” SHLB Coalition said in a letter to the FCC. “The very first paragraph of the Commission’s Tech Transitions Order discusses how IP-networks are replacing TDM-based networks and calls for a “technology-neutral” policy.
SHLB pointed out that “Ethernet services are sometimes delivered over TDM circuits illustrates the difficulty of establishing different regulatory rules for these two technologies.”
Not surprisingly, a particular concern SHLB cites is service cost, which is a major issue organizations that reside in rural markets. Schools and rural anchor institutions in rural markets often are limited to just one provider, inhibiting their choice for competitively priced services.
HLB said that by creating a common regulatory framework for TDM and Ethernet services that are either at or under 50 Mbps “would help smaller and rural anchor institutions obtain more affordable broadband connections.”
“Small and rural schools and libraries do not have the competitive choices available to larger and urban institutions,” SHLB said. “A survey conducted by the Consortium for School Networking (CoSN) found that 54% of rural schools had only one provider of broadband service. 6 Thus smaller and more rural schools, libraries, health providers and other rural anchors may be especially vulnerable to overcharges when purchasing low-bandwidth services from incumbent providers.”
SHLB is not the only organization that has spoken out about Wheeler’s proposal. Earlier this month, 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.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.