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CenturyLink: An Unfortunate ‘Legacy’

Amidst overseeing the transition from legacy telephone services to all-Internet-protocol networks, why would the Federal Communications Commission put competitive broadband services back under legacy telephone regulations? Or rather, why would it single out one provider of broadband services for legacy regulations?

Regrettably, that’s exactly what the FCC is doing when it comes to CenturyLink’s broadband enterprise services.

Just this month, the FCC took public comments on a proposal to keep those services under the thumb of last-century telephone regulations. But forwardlooking communications policy should reflect technological advancements and competitive market realities. And just administration of those policies should scrupulously avoid disparate treatment of market participants. The FCC’s proposal fails on both accounts.

The enterprise broadband market is highly competitive. There are no dominant carriers. CenturyLink’s rivals have long since been granted forbearance from dominant-carrier rate regulations and Computer Inquiry tariff requirements. Straightforward application of FCC precedents calls for forbearance relief from dominant carrier regulations for CenturyLink. At long last, the FCC should grant CenturyLink forbearance from those outdated regulations, and stop singling it out for disfavored regulatory status.

Enterprise broadband services offer high data speed and capacity capabilities through Ethernet and other IPenabled technologies. Such services are highly sought after by enterprise customers with unique communications and information technology needs. Enterprise broadband customers are typically sophisticated and informed, soliciting customized offerings and bargaining with providers.

Nationwide, the broadband enterprise services market has numerous competing providers, including AT&T, Cox Communications, Charter Communications, Frontier Communications, Verizon Communications, Comcast and Level3 Communications.

Through its Enterprise Broadband Orders (2006-08), the FCC expressly concluded that the market for packet-switched broadband services was “highly competitive.” The FCC likewise recognized that the demand for such services is sufficient to incentivize deployment and entry by competitors absent such regulation. The Enterprise Broadband Orders granted Section 10 forbearance relief to several incumbent local-exchange carriers, including AT&T, Embarq, Qwest Communications International and Verizon.

There is no evidence that CenturyLink has market power. Discarding agency precedents set in its Enterprise Broadband Orders and continuing to single out CenturyLink for disparate treatment would epitomize arbitrariness and capriciousness.

Seth Cooper is an adjunct fellow at the Free State Foundation.