FCC Chairman Calls for 'Fresh Start' in Oversight of Business-Data Services
April 08 2016 - 12:10PM
Dow Jones News
Federal regulators said Friday they will seek to revamp their
oversight of an obscure but important part of the
telecommunications market, the bulk data service that telecom
companies provide to businesses, including each other.
Federal Communications Commission Chairman Tom Wheeler called in
a blog post for a "fresh start" in regulating business data
services that would set aside outdated regulatory distinctions and
be technology-neutral. The agency said it would vote on the plan at
its April 28 meeting and hopes to complete a making a rule this
year.
Mr. Wheeler's announcement gave few details. Yet even before it
emerged Friday, industry groups were battling each other over how
far the new rules should go.
Smaller telecom companies on Thursday reached an understanding
with Verizon Communications Inc. to recommend replacing the current
patchwork of regulation with "a permanent policy framework for all
dedicated services," one that would be "technology-neutral,"
according to a joint statement. The current regulatory system has
been criticized for focusing on older market players and
technologies, leaving them feeling disproportionately targeted.
That announcement prompted a swift response from the cable
industry, which said Thursday that such a move would target their
firms. Some cable companies fear they might now face more
regulation than in the past since they are a newer entrant in the
market.
"The FCC should reject any call to impose new, onerous
regulations on an industry that is stepping up to offer meaningful
choices to business customers," the National Cable &
Telecommunications Association said in its own statement. "The FCC
will not achieve competition if it burdens new…entrants with
regulation."
The recommendation from Verizon and the smaller telecom
companies was short on detail, as was Mr. Wheeler's announcement,
suggesting the debate over new regulations is far from settled.
The so-called special-access market has proved to be a
particularly difficult regulatory puzzle for the FCC to solve, at a
time of rapid transformation in the telecom industry generally.
Some critics believe the FCC went too far in deregulating the
market in 1999, the last time the agency made a major policy
pronouncement.
For years, telecom companies such as Sprint Corp. and Level 3
Communications Inc. have griped that the phone companies such as
AT&T Inc. and Verizon have taken unfair advantage of their
power in the market. AT&T and Verizon, along with CenturyLink
Inc. and Frontier Communications Corp., dominate the special-access
market because they effectively control the wires that were built
by the legacy AT&T monopoly, which was broken up by the
government in 1984.
Some smaller companies, for example, accuse the carriers of
requiring them to make large volume commitments or face big fees.
Sprint, which uses the special access to connect its cell towers,
says it has had to pay huge termination fees to the larger carriers
when it switched several thousand cell towers to alternative
providers.
AT&T and the other large carriers have denied the
allegations and said the market is generally competitive.
Mr. Wheeler's proposal would bar contractual provisions that
discourage buyers from switching to newer providers or
technologies.
In addition, companies of all sizes have complained that the FCC
deregulatory scheme adopted in 1999 was both overly complicated and
ineffective at determining areas where the market still needed
stronger oversight. As a result, the FCC already has taken some
steps toward a new system of stronger oversight.
Mr. Wheeler's plan would go further in streamlining the current
regulatory regime. It also seeks to do away with old
technology-based distinctions that focused oversight on
old-fashioned phone service.
Write to John D. McKinnon at john.mckinnon@wsj.com
(END) Dow Jones Newswires
April 08, 2016 11:55 ET (15:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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