Verizon-Incompas special access proposal gets support from state and local groups

FCC headquarters

Verizon and Incompas’ joint business data services (BDS) proposal has gotten the support of several state and local trade associations which say it will enhance network investment and provide greater choice to businesses and non-profit organizations.

The letter was signed by the Midwest Association of Competitive Communications, CALTEL, Michigan Internet & Telecommunications Alliance, Northwest Telecommunications Association, and CompSouth.

“The beneficial effects of BDS reform will reverberate throughout the economy,” said the group of organizations. “Competitive wireline and wireless providers will be able to invest more in their own networks and innovative products and services, benefitting customers and competition throughout their communities. Indeed, one study shows that the spill-over effects of price reductions in the broader economy are substantial and an annual boost to GDP 2.6 times as great as the direct reduction in prices.”

The group said that it agrees with the Verizon-Incompas proposal that implementing a “competitive market test using three bandwidth tiers is appropriate” because “it recognizes where it makes economic sense for competitors to build and where it doesn’t.”

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Additionally, the trade groups said that by implementing a 15 percent price cap reduction for TDM, the FCC can achieve its goals to ensure greater competition in the BDS market.

In August, 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 market.

After the pair submitted their initial proposal 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.

However, a number of traditional telcos such as CenturyLink and Frontier have repeatedly criticized the Verizon-Incompas proposal, calling it a self-serving measure.

CenturyLink and Frontier said in a recent FCC filing (PDF) that that the various special access proposals “do not synch with market realities and would produce results that would be deeply harmful to investment in American broadband connectivity.”

In particular, CenturyLink is concerned that the proposal’s suggestion to cut rates by 15 percent over two years – along with 4.4 percent minus inflation annual reductions – would cause real-world harms. While much of the filing was blacked out, CenturyLink and Frontier said that thousands of CenturyLink and Frontier “union jobs are at stake.”

For more:
- see the letter (PDF)

Related articles:
AT&T, Verizon, CenturyLink special access pricing practices face new FCC investigation
Verizon, Incompas may draw fire from AT&T, CenturyLink on new BDS proposals
AT&T, CenturyLink slam Verizon/Incompas special access pact
Level 3: Verizon/Incompas proposal will help the FCC establish a sound business data services regulatory regime


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