Wheeler's special access proposal could be dismantled by Trump administration, says Jefferies

Tom Wheeler, Chairman of the FCC
FCC Chairman Tom Wheeler. Image: Getty

When Donald Trump takes office in January, it’s expected that he will appoint a new FCC chairman who will seek to shelve pro-competition issues like business data services (BDS) reform that were championed by current FCC Chairman Tom Wheeler.

Analysts have theorized that BDS and other controversial reforms like "unlocking" set-top boxes will be effectively shelved.

“We expect regulation of BDS (formerly special access), and set top boxes (STB) to be altered (i.e. watered down), or more likely eliminated,” said Jefferies in a research note.

What makes it likely that the Trump administration will influence the FCC to take BDS off the table is that the president-elect has already named two conservative leaders as his technology and telecom policy advisors.

According to various reports, Trump has tapped former Sprint lobbyist Mark Jamison and economist Jeff Eisenach to manage the transition at the FCC as the president-elect prepares to take office. The two will likely work to shift the FCC to a Republican majority commission that will set a new agenda.

Jefferies said that while Eisenach could be the “front-runner for the Chairmanship, we would not be surprised to see strong consideration given to Commissioner Pai,” a Republican who opposed a number of Wheeler’s proposals like net neutrality and municipal broadband.

Under Wheeler’s BDS reform plan, the intent was to regulate pricing for lower-speed wholesale data services, a proposal that cable operators and incumbent telcos have maintained would chill investment in new last-mile facilities.

The proposal called for a light-touch regulatory regime for next-gen Ethernet and packet-based services, for which new competition from cable and CLECs is emerging. Time-division multiplexing (TDM) services would continue to be governed by existing “price cap” regulation.

While Wheeler’s term does not officially end until 2018, it is expected he will step down after Donald Trump takes office in January.

Interestingly, the FCC took the BDS off its November monthly meeting agenda, a move that was praised by incumbent telcos CenturyLink and Frontier.