ILECs: Cable Lowballing Compromises Biz Data

Some top ILECs including AT&T, Frontier and CenturyLink, are telling the FCC that it should scrap the business data services analysis on which it based its refrom proposals, saying that cable operators lowballed the number of locations that should be deemed competitive.

The ILECS (incumbent local exchange carriers) have filed a petition asking the FCC discount as "irretrievably flawed" the data underlying its politically divided vote April 28 to propose remaking the business broadband marketplace and potentially regulating rates for cable operators' special access service.

The FCC is phasing out the presumption of regulating the rates of historically "dominant carriers" -- the ILECs (incumbent local exchange carriers) -- as a way to boost competition from "nondominant" CLECs (competitive local exchange carriers) and from cable competitors, and instead regulate the rates of any of them as it deems necessary.

They pointed to "recent acknowledgements by four of the largest cable providers that they significantly undercounted the number of locations that are capable of providing business data services and thus deemed competitive. In fact, the cable companies’ most recent FCC filings reflect 22 times more Ethernet-capable locations than the data on which the FCC based its May 2 further notice of proposed rulemaking (FNPRM)."

They cited ex parte filings by Cox, Comcast, Charter and Time Warner Cable saying they "had not reported locations connected to nodes that had been physically upgraded to enable the provision of Ethernet-over-HFC service as of 2013," according to CenturyLink et al.

Cable operators say the FCC asked the question about locations in two different ways--where service was provided, then where it could be provided without too much diffulty--and answered both questions fully. Cable operators also asked the FCC to extend the comment period for the proposal, which was denied.

But the ILECs say initially excluding that second, more complete, answer "massively distorted the competitive landscape," particularly the finding of market power by ILECs, which they say is fatally flawed.

“We are extremely concerned that the FCC’s latest business broadband proposal is now based on fatally flawed data that, unless corrected and updated, could have serious economic consequences for the business broadband market,” said CenturyLink SVP John Jones in a statement about the petition. “We’re asking the FCC to rescind the affected portions of its proposal and update its data before pronouncing judgment on what is or isn’t competitive.”

The National Cable & Telecommunications Association, whose members include those four cable operators, had no comment on the petition.

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.