New FCC Rules Seek End to Monopoly Pricing on 'Business Data Services'

By Wayne Rash  |  Posted 2016-08-10 Print this article Print

Because of this, the FCC is planning to take action to fix the problem. "These companies will be required to withdraw the illegal terms of these tariffs and file new tariffs within 60 days of release of the Order," the FCC said in its press release announcing the NPRM. The FCC is also proposing that the existing "fragmented and outdated rules" be replaced with rules that are technology neutral and which foster competition.

The end result of the FCC's plans for the NPRM are the effective re-regulation of the business data marketplace. This would include rate regulation, rules regarding non-competitive terms and conditions and prohibition of practices that limit innovation.

As you might imagine, the new FCC rules aren't popular among the four incumbent carriers, which are AT&T, Verizon, CenturyLink and Frontier, but they are widely supported elsewhere. This is especially true of some of the public interest organizations that have been backing change in this area for years.

"The FCC plan is pro-competition, pro-consumer and pro-innovation," said Ed Black, president and CEO of the Computer and Communications Industry Association. "The FCC's new rules would go a long way toward improving competition and helping all communities, especially those in rural and underserved areas, connect to the Internet for transactions," Black said in a prepared statement.

Phillip Berenbroick, senior policy counsel at Public Knowledge agreed. "Incumbent BDS providers possess immense market power and use it to inflate prices, costing businesses, non-profits, community anchor institutions, wireless carriers, and local governments tens of billions per year in excess BDS charges. Ultimately, these costs are borne by all consumers and taxpayers," Berenbroick said in a prepared statement.

"After a decade-long proceeding and the largest data collection in the history of the FCC, it's now time for the agency to take action to reform the BDS market by promoting competition and protecting consumers, who bear the heavy burden of these costs," he said.

Once the new rules are posted in the Federal Register, the incumbent carriers will be expected to end the practices that the FCC is concerned about. That should happen by the end of this year.

But will it actually change anything? In some cases, you may see change. For example, T-Mobile and Sprint, which are forced to buy network access from their direct competitors, may see prices drop and they may find it easier to move to other carriers.

This in turn will allow those companies to offer more competitive rates to their customers. Other carriers, notably AT&T and Verizon, already either provide their own BDS access, or they have sweetheart mutual deals between them, so customers won't see much change in terms of lower charges.

It's not a sure thing that other BDS users will get a break on charges. Just because the FCC is now allowing competition does not mean competition will actually develop. If it's doesn't, then really, nothing will change.


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