Proposed BDS Changes Are a Deregulatory Step Too Far for Some Carriers
USTelecom and other commenters warned the FCC against abruptly detariffing legacy business data services (BDS), as is proposed in an NPRM that commissioners approved ahead of their August meeting (see 2508050056). Unlike most deregulatory proposals from the FCC, industry groups mostly aren’t on board with the BDS changes. Comments were posted Tuesday and Wednesday in docket 21-17.
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The commission “should not, and need not, adopt the NPRM’s proposal to eliminate remaining pricing regulation and tariffing obligations for legacy BDS at this time,” USTelecom said. “Allowing the marketplace to continue its natural transition, bolstered by sound Commission policy, will ... protect providers, and best serve the Commission’s long-term policy goals.” The group argued that quickly detariffing BDS could cause disruption and instability in the market and “delay the evolution away from legacy BDS, rather than speeding the transition.”
NTCA agreed that the NPRM's proposed changes to the BDS framework could do more harm than good. The framework for rate-of-return carriers is a key part of promoting and maintaining universal service in high-cost, rural areas, the group said. “Unraveling this framework” could undermine universal service, “increase costs for carriers as well as consumers” and “slow the IP transition by inadvertently creating regulatory uncertainty, stranding costs, and stifling investment.”
Smaller providers have operated under the current rules for years and “have become far more efficient in doing so over time, and they have made substantial investments that rely in significant part upon the certainty and pooling/scaling capabilities facilitated by these frameworks,” NTCA said.
A group representing numerous small carriers, billing itself as the “Concerned Rural LECs,” said data from some 150 rural local exchange carriers demonstrates why the FCC should keep the current rules. For many small rate-of-return carriers, “eliminating the costs associated with cost studies and tariff filings does not outweigh the benefits of the current regulatory regime for BDS, and is generally not the driving factor in a decision to elect deregulation and detariffing, or incentive regulation.”
The typical WTA member serves fewer than 5,000 customers per service area and has fewer than 50 employees, the group said, and many participate in National Exchange Carrier Association tariff pools for BDS services. “The situation is not as simplistic as the NPRM suggests,” WTA warned, noting that it doesn’t discuss the benefits of NECA tariff pools. “Importantly, pooling provides for risk sharing among the small telephone companies that make up the pool, which is a very important consideration to those small companies.”
NCTA warned against change while the time division multiplexing to IP transition is still underway. “None of the large price cap incumbent LECs, including AT&T, Verizon, Lumen, Frontier, and Windstream, have completely transitioned to fully IP networks, and all these companies require local traffic exchange in TDM at certain points in their networks.”