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Internet Providers Look to Give BDS Plan the Business

The FCC’s attempt under then-chairman Tom Wheeler to revise its business broadband rules to potentially regulate cable-provided services —if necessary—could be the next casualty of a new chairman with a whole different view.

Ajit Pai, the FCC’s new Republican chairman, took the business data services (BDS) item—among those items that he circulates for a vote outside of a public meeting—out of circulation on Jan. 25 for “further review.” And according to a cable source and backed up by some recent comments, Pai is being pushed to close the docket entirely.

In meetings with FCC staffers, Comcast executives said there is no argument for imposing rate regulations on cable and satellite-TV providers given their lack of market power vs. incumbent providers.

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Under the Wheeler plan, cable internet service providers were subject to rate regulations if found—on a case-by-case, market-by-market basis—not to be providing their service on “reasonable and nondiscriminatory terms.” Cable operators had argued that the FCC first encouraged them to launch business services in competition to incumbent telcos—then rewarded them with potentially regulating their rates.

Reversal of Fortunes

Pai agreed, stating when Democrat Wheeler first proposed the change last April, “The FCC has implored cable operators to upgrade their networks and compete for enterprise customers. Many cable operators obliged, investing billions in new fiber facilities and new technologies like ethernet over hybrid fiber-coaxial cables and successfully competing for new contracts every year at a rapid clip. But now, what is the reward for taking those risks, for entering those markets? How does the agency treat those new entrants who accepted our invitation? By regulating them in the apparently au courant style of Ma Bell.”

That nondiscriminatory language has been applied to incumbent telcos to ensure they made their network available to competitors.

Wheeler tried to push through the BDS item last fall, but ran out of time after the postelection signal from Republicans not to take any 11th-hour actions.

In a letter to Pai last week, American Cable Association president Matt Polka put in his two cents on BDS, asking the chairman to “continue the light-touch regulatory approach for competitive providers of business data services.”