WASHINGTON, D.C.—The FCC may be on the verge of relaxing regulations on business data services, including how much they can charge customers. A vote is scheduled for April 19 on a deregulation plan that has been in the works for more than a decade.
Business data services are point-to-point connections used by businesses, non-profits and government institutions that need to send large volumes of data via secure lines. Traditionally, the local exchange carriers that provide these services have been subject to price regulations.
In his proposal before the Commission, FCC Chairman Ajit Pai said the proposed deregulation "recognizes the strong competition present in the business data services market and modernizes the commission's regulatory structure accordingly to bring ever new and exciting technologies, products and services to businesses and consumers."
Womble Carlyle Telecom attorney Doug Bonner tells Law360 that while some may not be happy with the proposed changes, the FCC needed to update its rules to reflect the evolving marketplace.
"That's just a fundamental market reality that I think is really influencing the commission here to deregulate that shrinking market," according to Bonner. "And what they've essentially done here, and I guess where there's any controversy in their proposed order, is the commission is essentially relaxing what their competitive market test is for ex ante price cap regulation to the presence of simply one potential competitor within essentially one half-mile."
Under the Pai plan, if a market has two service providers with a half-mile, then that area is considered competitive and, thus, subject to deregulation.
Bonner said that while some say that test isn't strict enough, there doesn't appear to be a "groundswell of opposition."
Also, Bonner says, "To the FCC's credit, whether you agree with the conclusion they're reaching or not, or whether or not even their test is perfect or not," the plan will provide clarity to a debate that has been going on for 12 years.
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