Mar 30, 2018 10:00:00 AM
Last year the FCC determined that price cap ILEC special access and packet services should be almost entirely deregulated with only DS1 and DS3 transport subject to price cap regulation if the ILEC failed a highly criticized "competitive" market test. This regulatory scheme became effective on August 1, 2017 when the Business Data Services (BDS) Order took effect.
That Order put many rate-of-return (ROR) ILECs in a unique position. More than 200 ROR ILECs now receive universal service support based on a cost model called the Alternative Connect America Fund Cost Model (ACAM). In return for a fixed amount of support, these ILECs are required to meet a specified level of broadband deployment. This method to recover Connect America Fund (CAF) dollars has become very popular among ROR carriers. However, as a result, these LECS are no longer in the NECA Common Line Pool and remain subject to rate regulation only for their special access services. Some parties sought to change that.
Oct 13, 2017 10:00:00 AM
On October 4, 2017, to the surprise of almost no one, Public Knowledge, the Consumer Federation of America, and the New Networks Institute appealed the recent FCC's Business Data Services (BDS) Order to the 8th Circuit Court. The consumer advocate organizations argue that the FCC's competitive market test used to deregulate ILEC DS1 and DS3 special access services is "ludicrous." Specifically, they claim it is inconsistent with competition law, unsupported by the record and will lead to higher prices in the BDS market, which will be ultimately borne by consumers. We believe these criticisms hit the mark.
Aug 11, 2017 10:00:00 AM
The FCC’s Business Data Services Order (BDS) became effective on August 1, 2017 after the Eighth Circuit Court of Appeals denied a Motion to Stay the Order filed by Windstream Services, LLC, Ad Hoc Telecom Users Committee, BT Americas, Inc., and INCOMPAS. The Court gave no reason for its decision.
Although the Order was not stayed, it is important to note that the appeal of the Order itself will now be heard and ruled upon by the Eighth Circuit. That Court determined that it had the appropriate expertise to review the Order and refused a request that it transfer the case to the more experienced DC Circuit Court. It is important to note that a court’s refusal to stay an order does not always mean that it will ultimately find the order lawful. That decision will likely be made on the BDS Order within the next year.
May 26, 2017 10:00:00 AM
On May 15, 2017 the FCC finally released the list of competitive, non-competitive and grandfathered markets it identified in its Business Data Services (BDS) Report and Order (Order) in Docket 17-43. In that Order, the Commission decided to eliminate price cap regulation for ILEC DS1 and DS3 special access services in counties deemed “competitive,” and in counties that previously obtained Phase II pricing flexibility (grandfathered counties), while keeping price cap regulation on DS1 and DS3 channel terminations in “non-competitive” markets.
Mar 17, 2017 10:00:00 AM
In November the FCC was poised to approve a new regulatory paradigm for special access and Ethernet services now collectively called the business data services (BDS) market. The plan would have re-imposed price cap regulations on ILEC special access services with forced large up-front rate decreases and large annual decreases based on ILEC productivity. It was strongly opposed by ILECs.
Nov 18, 2016 10:03:14 AM
What a crazy few days for telecom! It started out in typical fashion for our industry when seeking to minimize the impact of the quickly approaching FCC vote on new business data services (BDS) rules, AT&T and CenturyLink suddenly decided those rules, including the forced price cuts to DS1 and DS3 circuits applied only to channel terminations and not channel mileage. In other words, the ILECs claimed that the rules applied only to the end piece of a dedicated circuit (the part connected to a customer) and not the interoffice mileage between the ends of the circuit.
Nov 4, 2016 10:00:00 AM
It looks like the ILECs are not quite ready to swallow the proposed new rules for business data services (BDS). As you may remember, on October 7th the FCC released a “fact sheet” of its proposed regulations for special access and Ethernet services. The new rules are scheduled to be adopted at the Commission’s November meeting and take effect in 2017. The essence of the proposal is that ILEC DS1 and DS3 special access circuits will be regulated using price caps regardless of the level of competition in a market. Other providers of time-division multiplexed (TDM) special access services would not be have their prices regulated. Ethernet services, regardless of provider, would also not be price regulated. Parties unhappy with Ethernet rates would be able to appeal to the Commission through a bulked-up complaint process. Our summary of the “fact sheet” can be found here.
Oct 19, 2016 10:00:00 AM
On October 7, 2016 the FCC circulated a draft order establishing new regulations for the business data services (BDS) market including ILEC special access and Ethernet services. At the same time, the agency released a summary of the plan which we discuss below. The proposed regulations may be adopted at the Commission’s October 27, 2016 meeting or, more likely in November. The rules are based on the Commission’s finding that ILECs continue to have market power in DS1 and DS3 services but face more competition in packet-based services where they face new entrants such as cable companies. Here are the regulations the Commission is recommending:
CLEC Alert: Fate of Wholesale Network Platform To Be Determined In FCC’s Business Data Services Order
Sep 30, 2016 10:00:00 AM
The Unbundled Network Element Platform (UNE-P) continues to live for now in the form of commercial wholesale network platform services offered by AT&T and Verizon. These services, called Local Service Complete and Wholesale Advantage respectively, provide CLECs unbundled access to ILEC voice loops, switching and transport in one package and provide the most cost efficient method to enter local markets without purchasing costly network facilities. However, they are in danger of ending when the FCC issues its Business Data Services (BDS) Order later this year.
Sep 26, 2016 10:00:00 AM
FCC Chairman Tom Wheeler made it official last week when he announced at a meeting of the Competitive Carriers Association that, before the end of the year, the Commission will release an Order prescribing new regulations for the Business Data Services (BDS) market consisting of special access and Ethernet services. While no one outside of the agency knows exactly what the Order will include, an analysis of the Commission’s Notice of Proposed Rulemaking (NPRM) in Docket 16-143 and its public statements since, enable us to make the following educated guesses: