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NCTA Makes Its Case to FCC Against Business Data Regs

WASHINGTON — Cable operators still have plenty of issues with Federal Communications Commission chairman Tom Wheeler’s proposal to regulate business data services (BDS).

A couple of weeks ago, the chairman released some details on an adjusted plan that no longer proposed potential before the fact (ex ante) regulation of all incumbent and competing providers, like cable operators, based on geography (census blocks), but instead on a case-by-case approach for competing services in areas where the FCC determined there was not sufficient competition.

The FCC found clear evidence of lack of competition in the legacy BDS market, but the picture is less clear in the Ethernet (cable BDS) market. So the agency proposed price caps on legacy services, but case-by-case reviews of others, though it is seeking comment on whether that is the right thing to do.

The potential after-the-fact regulation (ex post) via a complaint-driven process did not sit well with cable operators, either, and NCTA – The Internet & Television Association was making that pitch to FCC commissioners last week.

Wheeler has circulated the proposal for a vote. The FCC said BDS is a $45 billion market for services including banks and retailers connecting ATM machines and credit card readers; government and corporate users connecting branch offices and data centers; and mobile phone providers offloading calls and data from wireless networks.

The NCTA ticked off the problems it still has with the item:

• Any rate regulation of competitive providers’ service is unnecessary because there are a “wide range of competing providers [who] are investing billions of dollars in facilities to provide these services and prices have been declining steadily as a result of this intense competition.”

• There is no reason to conclude that all BDS services should be considered common-carrier services (the item reaffirms that all Ethernet service is covered under Title II); NCTA noted that some service is provided on a private-carrier basis and said that to eliminate the option of private-carrier BDS could discourage the very competition — new providers and services — the FCC is trying to promote.

• There is no reason to require providers to offer discounted wholesale service.

NCTA argued it is unfair for the FCC to encourage cable operators and others to compete with the legacy phone companies in BDS, then potentially reward them for their capital expenditures with rate regulations.