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Internet Innovation Alliance: Time for BDS Deregulation

Friends and foes of FCC chairman Ajit Pai's broadband business data services (BDS) deregulatory proposal were battling down to the wire as the FCC prepares to vote on the proposal April 20. 

Bruce Mehlman, cochairman of the Internet Innovation Alliance, was among those arguing, as does Pai, that the marketplace is competitive and price dereg of incumbent local exchange carriers (ILECs, the broken-up former Bells) should be the order of the day.

“The simple and unavoidable truth is that the Business Data Services market is robustly competitive today," Mehlman said. "Competitive networks now reach almost 99% of business customers. It’s easy for CLECs to compete if they want to: Already, more than 60% of next-generation BDS are provided by CLECs and cable companies, rather than incumbent carriers."

Foes of the proposal have called for a three-year transition period if the FCC votes, as expected, for the deregulation.

Mehlman was having none of it. "A few short months ago, some companies and groups were advocating wrapping up the proceeding by January 1; now, they seek a three-year delay. The facts of competition in the BDS market have not changed."

Opponents of the proposal say that counting duopoly markets and markets where there is "nearby" competition as competitive is way off base, and that Pai's conclusion—based on the same data that led former FCC chairman Tom Wheeler to conclude that the marketplace was unevenly competitive and regulation was still needed—was arbitrary. They want the three years to let those nearby competitors and next generation competitors start competing.

The FCC has been trying to reform BDS (then called special access) for a dozen years. Mehlman thinks that is long enough. "[T]here is not reason to delay," he said. "The FCC has the data to act. If CLECs [competitive local exchange carriers] truly want to participate in this market, it’s time for them to invest and compete by building modern networks, not complain. And it’s time for the FCC to adopt reforms that will encourage investment in modern BDS networks and promote facilities-based competition.”

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.