FCC Turns Eye to Business Broadband Regulations
Two decisions last week by the FCC could have wide-ranging effects on business broadband services for both corporations and wireless companies. The changes are moving forward thanks in part to a compromise between Verizon and a trade group for smaller telecom firms.
If your organization relies on corporate broadband services, changes proposed by the Federal Communications Commission (FCC) could alter the level of competition for those services.
Last week the FCC moved forward with two changes to the way broadband is sold and distributed to businesses. In a 3-2 vote, the agency decided to ban certain practices such as early-termination fees, which have the effect of tying businesses to specific telecommunications providers. That could be good news for wireless network companies, which rely on business broadband in building out networks, as well as industries such as retail.
The second action, also decided in a 3-2 vote, is a proposal that could be more significant in the long run. As The Washington Post reports, the FCC voted to start the process of overhauling the rules for the business broadband market so as to increase competition and give companies more choices in broadband providers. Ultimately, that could make the market for “backhaul” services, or high-speed connections often used in corporate and enterprise contexts, cheaper and more competitive.
Forging a Compromise
Traditionally, this sort of wireline access has been controlled by providers such as AT&T and Verizon, but in recent years cable companies have begun to make inroads into the business broadband market.
AT&T remains opposed to regulatory efforts focused on business broadband, but Verizon has been more willing to compromise. Last month the telecom giant struck an agreement with the trade group INCOMPAS, which represents internet and competitive network providers, whereby the organizations collaborated on a letter to the FCC requesting that it create a regulatory framework for business broadband [PDF].
In a statement last week, INCOMPAS CEO Chip Pickering praised the FCC’s regulatory actions.
“Armed with the most significant data collection in its history, the FCC is primed to take action so that broadband competition across the nation’s communities is promoted,” Pickering said [PDF]. “We remain committed to working with the commission and all stakeholders to reach a positive outcome for business broadband customers who are seeking more choice, lower prices, and innovation.”
In comments on the plan, FCC Chairman Tom Wheeler made light of the fact that among wireless providers, only AT&T was opposed to the proposal.
“There is a reason why all the major wireless carriers—save one—support this item,” Wheeler said, according to Bloomberg BNA. “Because it’s essential to wireless competition. Competition today, in 5G innovation, and competition tomorrow.”
Cable Providers Raise Concerns
But while the legacy telecom industry appears to be at least partly coming around to the plan, it is a different story with cable providers. Last week the National Cable and Telecommunications Association (NCTA) spoke out against the regulatory efforts, arguing that its members’ entry into the business broadband market highlighted growing competition for the sector.
“Cable’s entry into the market for business data services over the last few years has resulted in improved services and lower prices for businesses all across America,” NCTA said in a statement. “It is disappointing that Chairman Wheeler is responding to this unquestionably positive development by asking the commission to consider imposing onerous new rate regulation on these competitive services.”