Critics Call for Pushing Back BDS Order Vote; FCC Delay, Course Change Still Doubted

More critics of a draft business data service order are pressing the FCC to delay a vote planned for the April 20 meeting of commissioners, so far to no effect. The U.S. Small Business Administration and others said more time is needed to address deregulatory BDS proposals in the draft they say would harm business market competition and customers. If nothing else, the agency should create a three-year transition for implementing a new framework, some said. Some are skeptical there will be a pause.

Incumbent telcos said there's strong and growing competition to their traditional BDS (special access) offerings and disputed the need for a lengthy transition. Cable interests offered mixed comments. Parties bombarded the FCC with final pleadings before lobbying restrictions took effect Thursday, in filings in dockets 05-25 and 16-143 posted Thursday and Friday.

The SBA is concerned the draft "would deregulate pricing" in various markets. BDS is a "critical input for many of the country's small businesses," but the draft's "proposed competitive market test" for DS1 (1.5 Mbps) and DS 3 (45 Mbps) "channel terminations may result in reduced choices for small business," said SBA's filing on a discussion with Wireline Bureau staffers. It asked the FCC to delay voting so parties can "raise and resolve their concerns," and to "delay the effective date of any final order for an adjustment period."

Contacts answering our queries Friday continued to doubt the FCC would delay a vote; others voiced similar skepticism after Incompas called for a delay April 10 (see 1704110017). Chairman Ajit Pai apparently sees no reason to delay the vote, said CCMI telecom consultant Andrew Regitsky, with clients on both sides of BDS issues. Pai "obviously thinks his market test is sound, and if you accept that it is, then the Commission's decisions to deregulate are defensible. The only thing that I think would make him pause is if some party actually showed the data he relied on is flawed. Opinions like the SBA letter don't do that. Nor has any other party" done that, Regitsky emailed.

An ex-FCC official "seriously" doubted there would be a delay or major changes. "Maybe a transition related adjustment," said the ex-official, a telecom attorney. "Fully expect the vote" April 20, emailed a telco official. An FCC spokesman didn't comment Friday, the day after the BDS draft was placed on the April agenda; it previously was on the tentative agenda (see 1703300052). Observers have said they expect commissioners to approve a deregulatory order by a 2-1 vote (see 1704030050).

Sprint and Windstream said the FCC made "an unexpected 180-degree turn" in the draft, which would "fail American businesses -- especially small business -- and violate" the Administrative Procedures Act. They urged the commission to convert the draft into a Further NPRM to seek comment on the item's "use of novel and untested theories of competition, reliance on new data sources, unexpected effort to deregulate transport services, and changed conviction that the Commission should eliminate protections even in areas proven to be insufficiently competitive." At a minimum, the FCC should revise its competitive market test for channel terminations to reflect market entry barriers, address transport in a FNPRM and provide a three-year transition for any new rules, their joint filing said. Windstream, BT and Incompas made similar arguments in discussions with Pai, Commissioner Mike O'Rielly, Commissioner Mignon Clyburn, aides and other agency staffers.

Public Knowledge and others urged the commission to seek additional comment. "Failing that, we request that the FCC reexamine its conclusions based on the existing record, before it passes rules that will cause serious harm to small businesses, non-profits, schools, libraries, universities, government agencies, and ultimately consumers," said the filing by PK, the Consumer Federation of America, National Digital Inclusion Alliance, Common Cause, Next Century Cities, New America’s Open Technology Institute, and Institute for Local Self-Reliance Engine.

The Wireless ISP Association called the draft "fundamentally flawed." By proposing to eliminate tariffs and deregulate at the wholesale level, the draft "directly contravenes" Pai's dissenting statement in the FCC's 2015 open internet order when he said, "What I cannot find -- and what our precedent does not countenance -- is any instance where the FCC eliminated economic regulations without first performing any market analysis or finding competition sufficient to constrain anti-competitive pricing and behavior," said the WISPA filing.

AT&T believes there's no need for the transition that others are advocating, and "a three-year transition is completely unwarranted," said a filing on a meeting with a Clyburn aide. The draft "is a measured and appropriately data-driven solution to the issues raised in this proceeding," said a longer AT&T filing responding to previous Sprint and Windstream arguments. USTelecom, CenturyLink, Alaska Communications and others also made filings supporting deregulation.

NCTA criticized Starry arguments for imposing "Title II-like obligations on BDS providers' private carriage offerings." Starry's concerns (see 1704130028) are "wholly speculative" and the firm's "focus on regulating cable operators that offer service on a private carrier basis particularly unwarranted," the association wrote. Addressing contemplated detariffing and a related "grandfathering rule" covering existing contracts, Cox Communications asked the FCC to clarify "that all tariffed term plans" would be grandfathered.