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Sprint, Windstream Sue FCC Over BDS Order

Sprint and Windstream have filed suit against the FCC's business data services (BDS) reforms, adopted April 20, saying the decision was illegal and that the court should strike it down.

In that decision, the FCC under new chairman Ajit Pai declared the broadband business data services market generally competitive—a distinct departure from the more regulatory proposal of Pai's predecessor, Tom Wheeler, and deregulated the rates incumbent providers like AT&T and CenturyLink can charge for services like wireless backhaul, credit card readers, ATMs and institutional hookups to schools and libraries.

The suit was filed May 8 with the U.S. Court of Appeals for the District of Columbia, which has principal jurisdiction over challenges to FCC decisions.

"Sprint has made its position on the state of the BDS market clear and, in light of the Commission’s decision, we have decided to exercise our right to seek a review of the FCC’s decision by filing a Petition for Review," the company said in a statement.

Sprint and Windstream pointed out that the Wheeler proposal was based on the conclusion that competition was "stubbornly absent" in many parts of the data services marketplace and that the ensuing pivot to the BDS decision under the new chairman was arbitrary and capricious, illegal and unconstitutional. And just to make sure it could not get up off the mat, as it were, they asked the court to "reverse and hold unlawful, vacate, enjoin, annul and set aside" the FCC decision.

There had been plenty of last-minute pushback by critics of the BDS proposal, from the European Union and competitive carriers like Sprint and Windstream to Democrats and consumer groups, but the two FCC Republicans had the votes to push through the deregulatory item, asserting that competition in the marketplace was "strong."

The vote was two to one, with Democratic commissioner Mignon Clyburn offering a scathing review. "[T]his Order is one of the worst I have seen in my years at the Commission. It is abhorrent that the policy goal is deregulation at all costs, and the entire Order—facts, policy, and law—are all calibrated to achieve that goal."

She was part of the Democratic majority that supported Wheeler's BDS notice of proposed rulemaking (NPRM) that had concluded the marketplace was not sufficiently competitive.