Incompas, Verizon Press 3-Tiered BDS Approach; FSF Cites Investment Concern
Incompas and Verizon pushed business data service (BDS) regulation proposals they had made to the FCC. In a meeting with commission officials, "We focused on the need for the three-tiered approach to the competition test and the need for a…
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
one-time adjustment to TDM [time-division multiplexing] rates in areas served by price cap ILECs to account for the freeze in rates under the CALLS [Coalition for Affordable Local and Long Distance Service] Order" of 2000, said a joint filing Friday in docket 16-143 on a meeting with FCC General Counsel Howard Symons and other staffers. Incompas and Verizon in June proposed creating three tiers of BDS offerings based on their data speeds, with the lowest tier (below no lower than 50 Mbps) deemed noncompetitive and subject to regulation, the highest tier (above 1 Gbps) deemed competitive and not subject to regulation, and the middle tier subject to commission review by census blocks (see 1606270058). "We also discussed the need for an Ethernet benchmark in relevant markets that are insufficiently competitive, which would involve price regulation on a technology-neutral basis," said the Friday filing. "The FCC would apply the benchmark to constrain prices and ensure that providers could not abuse their market positions by imposing rates, terms or conditions that are unjust or unreasonable. The benchmark would be adjusted each year to ensure that rates are reduced over time." Separately, Free State Foundation President Randolph May said BDS regulation would deter network investment that he said already had been undermined by the net neutrality and broadband reclassification order. "The reason is simple -- and widely-acknowledged by regulatory economists: Rate regulation mandating that incumbent telephone company providers give competitors access to their facilities at below-market rates discourages investment in facilities by both incumbent providers and new entrants," he said in a Friday blog post. "This depressive investment effect is the likely result of any Commission action in the BDS proceeding that forces the telephone companies to reduce the rates for network inputs sought by competitors." He cited recent "dismal figures" for U.S. business investment, a report by economist Hal Singer on broadband investment, and an opinion by Supreme Court Justice Stephen Breyer in a 1999 AT&T v. Iowa Utilities Board ruling as supportive of his broader arguments.