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FCC scraps most business data service regulations

21 April 2017

The U.S. Federal Communications Commission on Thursday voted 2-1 to significantly ease regulatory requirements in the $45 billion business data services market, a win for companies like AT&T Inc, CenturyLink Inc and Verizon Communications Inc that could lead to price hikes for many small businesses. The data showed that approximately 97 percent of business customer locations had access to two or fewer BDS providers, with almost three-in-four locations with only a monopoly provider. The regulations require incumbent local exchange carriers (ILECs) to lease portions of their networks to smaller competitive local exchange carriers (CLECs) like Sprint and Level 3 at regulated rates to boost competition.

The current FCC under the Trump Administration changed its trajectory after Wheeler's FCC originally agreed with the European Union and said the competition in the BDS marketplace is "uneven".

"I could not be more pleased with Chairman Pai's leadership of the FCC in the short time he has taken the helm", Johnson added.

"In 2014 and 2015, the FCC collected data on the BDS market in the largest data collection in the agency's history".

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The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website . The business had revenue of $215.70 million for the quarter, compared to the consensus estimate of $215.66 million.

In delivering the order, the FCC claimed that legacy regulation inhibits the investment required for the transition of BDS from legacy TDM networks to high-speed Ethernet connectivity. "Such networks are often deployed by lightly-regulated competitive carriers, which now account for almost half of the $45 billion BDS marketplace".

"For more than a decade, the Commission has investigated excessively high rates and anti-competitive conduct in the BDS market".

Clyburn complained that the new rules define a market as competitive even if it has only one bulk broadband provider, as long as a competitor has access lines within half a mile. Seventy-five percent of the census blocks in a county have a cable provider present, though opposition groups including the pro-net neutrality think tank Public Knowledge argue cable BDS isn't as powerful as services from traditional BDS providers.

Chip Pickering, CEO of Incompas, said that the FCC's action reflects that it is "out of touch with consumers, out of sync with businesses and out of step with our nation's internet infrastructure goals". The agency's 2011 Information Needs of Communities Report (INC Report) recommended such action, and in a statement accompanying the 2012 proceeding, former Chairman Genachowski said, "Allowing noncommercial stations to partner with charities, churches, and other religious organizations, schools, and other non-profits to raise money for worthy causes will enable these stations to help meet the needs of their local communities".

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The FCC is proposing the elimination of the 2015 Technology Transitions Order, which was created to ensure consumers and competition are protected as carriers swap their networks from legacy services to modern networks. Prices are going up, and customer service is going down.

The decision will "open the door to immediate price hikes" for "cash-strapped hospitals, schools, libraries and police departments", particularly in rural America, she said. Kerpen said, "The FCC under Tom Wheeler tortured the data to make sure they could continue pushing for onerous regulations like this that pushed their liberal ideology". "Regulators will always struggle to set the right price".

In the day's final reversal, the agency rolled back a vote a year ago to limit the number of TV stations a broadcaster can own in each market. Currently, Sinclair Broadcast is said to be nearing a potential deal to acquire Tribune Media's 42 TV stations, and large broadcast powers like Nexstar Media and CBS have both expressed interest in expanding their broadcast TV footprints should the FCC revert back to the old ownership rules.

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FCC scraps most business data service regulations