FCC Approves Order to Reform Business Data Services

The FCC is re-examining the regulation of business data services, or the special access lines that offload large amounts of data.  

wireless network infrastructure

The Federal Communications Commission (FCC) is seeking public comment on a new regulatory framework that will affect wireless networks and services—and that has the five-member group split down party lines.

On April 28, the FCC voted, 3-2, on an order of proposed rule making that will jump-start the process of "protecting and advancing competition in the $45 billion market for business data services, also known as special access," the agency said in a May 2 statement.

Special access refers to the infrastructure that makes a wireless network operate, at the point where a cell tower connects to very wired technologies. As FCC Chairman Tom Wheeler explained in his own statement on the order, "A wireless network is mostly wired. Every cell tower needs backhaul to pass along a mobile communication to its intended destination. No backhaul—no call, text or Web surfing from your mobile device."

What's being contested in the order is the regulation around all that backhaul, which Wheeler called, "badly, badly out of date."

Part of the issue is the inclusion of penalties in long-term contracts that make it difficult for users—in this case banks, retailers connecting ATM machines and credit card readers, as well as mobile phone providers and other organizations offloading significant data from wireless networks—to opt out of a service and switch to another.

The adopted item seeks to modernize the rules, based on four principles:

--that competition is best, and where it doesn't exist, conditions shouldn't be allowed to stifle the possibility for innovation or competition;

--that technological neutrality should be at the core of any new framework;

--that policies should remove barriers to the transition to new technologies; and

--that rules should consider the needs of today's and tomorrow's marketplace.

The two dissenting votes came from the commission's Republican members, Michael O'Rielly and Ajit Pai.

O'Rielly, in his statement, marveled at the prospect of protecting the various parties from the penalties written into their contracts.

"This is the very definition of a penalty," he wrote, "designed to act as a legal and reasonable financial deterrent, not just make a provider financially whole."

Further, those parties are some of the nation's largest, and most well-represented, retailers and banks, added O'Rielly. "At the same time, politicians are vilifying our nation's bankers, especially big banks—which own tens of thousands of ATMs nationwide—the commission seems intent on using regulatory process to lower these companies' cost of operations. Oh, the irony."

Pai likened the 193-page order to Alice's Adventures in Wonderland. "Practically nothing in it makes any sense," he wrote.

During the Clinton Administration, the FCC sought to spur competition by "getting rid of central planning," wrote Pai. That framework, he continued, led to more competition in the business broadband market; incumbents lost market share to new entrants; and special access customers are now "on the leading edge of the IP transition as they choose faster, more reliable IP-based services over slower, fading technologies."

Keeping with the Alice in Wonderland metaphor, Pai recalled a poem, read by Tweedledee, in which oysters are invited to walk along the beach, only to be gobbled by their hosts.

The FCC invited cable operators to upgrade their networks and invest billions in new fiber facilities and technologies. But, Pai asked, how does the FCC treat those who accepted its invitation and took those risks?

"By regulating them in the apparently au courant style of Ma Bell," he wrote. "As the oysters in the poem cried, what 'a dismal thing to do.'"

The order is open for public comment until June 28.