Sprint has fired the latest shot in the business data services (BDS) battle, challenging ILECs and cable operators’ claims that Ethernet over HFC (EoHFC) will drive further competition in the sub 50 Mbps wholesale services market.
The carrier said in an FCC filing that a large portion of cable companies’ HFC networks are mainly located in residential areas outside the reach of businesses.
“The mere presence of HFC network infrastructure does not mean that a provider can deploy a BDS-equivalent service throughout an area, much less that a provider can do so quickly, efficiently, and to scale,” Sprint said. “To the contrary, as the cable industry acknowledges, expansion of EoHFC services faces both buildout and capacity-related barriers.”
Cable operators’ presence in the BDS market has been a cornerstone of the ILEC community’s argument that the FCC does not need to impose new regulations on the BDS market segment.
In June, CenturyLink and a group of ILECs filed a motion to strike what it says is an "irretrievably flawed" data framework in the FCC's recent business data services (BDS) proposal, saying that cable operators understated their capabilities to serve the Ethernet services market. Other ILECs that joined CenturyLink in the motion to strike included AT&T, Cincinnati Bell, Consolidated Communications, FairPoint Communications and Frontier Communications.
The group of ILECs cited updated filings made by Charter Communications, Comcast, Cox and Time Warner Cable, which suggested that there are 22 times more Ethernet-capable locations than the data on which the FCC based its May 2 further notice of proposed rulemaking (FNPRM).
William Zarakas, principal of The Brattle Group, noted in a supplemental declaration following a study he made on the distribution of BDS providers by service locations and census blocks. This study assumed that cable was present in every building and census block where BDS was reported to be sold.
“This study shows that there are four or more competitors present in just 0.5 percent of locations with BDS demand and only 2 percent of census blocks with BDS demand,” Sprint said, citing the Brattle Group study. “In contrast, customers in 90 percent of locations and 86 percent of census blocks with special access demand would only have two choices. In short, neither the recently submitted data regarding the presence of cable EoHFC facilities, nor the assumption of ubiquitous deployment of cable EoHFC facilities, materially impact the Commission’s finding that BDS offerings of 50 Mbps and below should be treated as presumptively not competitive.”
Sprint cited a Comcast filing in which the cable operator said its EoHFC products were developed to be "gap fillers" for customers with hard to reach off-net locations. The MSO added that “vast majority of businesses seeking Ethernet services demand full carrier-grade performance and SLAs that EoHFC cannot provide.”
The service provider's comments came as it expressed support for the latest Verizon-Incompas joint BDS proposal. Under the new plan, the two players suggested that the FCC apply a one-time rate adjustment in two phases for BDS.
“The proposal continues to represent a balanced and administrable approach to the reform of the business data services market,” Sprint said in a letter to the FCC.
Despite its protest of the ILECs' claims, Sprint does see value in EoHFC and other alternatives, particularly as it looks to expand the availability of Ethernet services.
In a previous interview with FierceTelecom, Sprint said that it would bolster its Ethernet service strategy by offering customers the option to access two new options -- Ethernet over Copper (EoC) and Ethernet over DOCSIS (EoDOCSIS) -- via its growing array of access network partners. While it did not provide an exact timeline, the provider said it would begin offering these options sometime this summer.
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