Nearly a year after it ordered sweeping deregulation of the business data services (“BDS”) market, the Federal Communications Commission (“FCC”) proposed new rules that would allow certain small rural carriers to move from longstanding rate-of-return regulation to price cap regulation for their BDS offerings.  The transition would reduce the regulatory obligations of such carriers, including the need to prepare and file complex cost studies, which the FCC stated would allow carriers to rededicate resources to building and maintaining networks in underserved areas.  The FCC also proposed removing pricing restrictions on lower-speed BDS offerings in areas with sufficient competition and sought input on whether pricing restrictions for higher-speed DBS offerings also should be eliminated.

Unlike prior BDS actions, where the issue was hotly contested for years and deregulation passed on a party-line vote, the proposed rulemaking was supported by all five Commissioners, at least for purposes of gathering a record. It’s not clear if this unanimity will hold throughout the proceeding, but the FCC may be on the verge of turning a page in its focus on these services, which are a bedrock for both retail offerings and for competitive carriers extending their networks.


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fcc_equipEnding a decade-long examination of incumbent carrier special access and related services, the Federal Communications Commission (Commission or FCC), on April 28, 2017, released a Report & Order (the Order) setting forth a deregulatory framework for business data services (BDS).  The Commission found that, in most instances, BDS – “dedicated point-to-point transmission of data at certain guaranteed speeds and service levels using high-capacity connections” – exists in “a dynamic and increasingly competitive marketplace.”  The Order generally eliminates ex ante pricing regulation with the exception of end user channel termination services at DS1 and DS3 levels in counties that fail a competitive market test adopted in the Order, in the hope of stimulating growth and investment in new services.

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