NCTA urges FCC to reject Verizon/INCOMPAS BDS proposal, consider its regulation plan instead

NCTA CEO Michael Powell (Credit: NCTA)

The NCTA has written the FCC, asking the agency to put aside the current plan for business data services (BDS) regulation based on input from Verizon and INCOMPAS, and consider a new proposal.

According to the new plan put forth by the National Cable Telecommunications Association, regulations should only apply in areas where there is only one BDS provider; the tract has fewer than 10 BDS customers and not enough demand to attract more BDS competition; tracts where no customers purchase fiber-based Ethernet BDS.

Regulation would sunset in 2025 if at least one provider offers Ethernet services in the census tract by that time, NCTA said.

In April, the FCC voted 3-2 to approve the Tariff Investigation Order and a Further Notice of Proposed Rulemaking proposing a new regulatory framework for the provision of “special access services” — which FCC Chairman Tom Wheeler now calls business data services. 

The foundation of that regulation come from input provided by Verizon and INCOMPAS, a tech group that counts Google in its tent. 

“This new framework is far superior to the ‘regulate everything’ approach that Verizon and INCOMPAS have sought to advance,” NCTA said in a blog post announcing its new regulatory plan. “That proposal and the expansive new regulation it advocates ‘lacks support in economic theory, in regulatory experience, and in the record on BDS’ according to a separate letter filed today by seven of the economists participating in this proceeding, including two former chief economists at the FCC.”

Indeed, along with a new proposal, the NCTA’s communications assault also included a letter to the FCC attempting to undermine the need for more BDS regulation.

“The record shows that large numbers of service providers have invested billions of dollars to increase the output and quality of BDS throughout the country, and have expanded into new markets to meet growing demand,” NCTA said in a letter signed by four UC Berkley economics professors. “Such competitive expansion is highly likely to produce competitive benefits to customers in the BDS marketplace. Indeed, Ethernet prices have been declining sharply, as have been prices for BDS more broadly. Moreover, as several of us have found, the BDS marketplace exhibits multiple characteristics.”

For more:
- read this NCTA proposal (PDF)
- read this NCTA letter (PDF)

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