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Windstream, Sprint, Frontier Support Verizon Proposal For BDS Price Caps

Regulation

The Verizon/Incompas proposal for expanded price caps on the business data services (BDS), or “special access” market, has gained the support of Frontier Communications, Windstream and Sprint.

In a joint letter submitted this week to the Federal Communications Commission, the telcos said they agree the Commission should move forward with reform of TDM BDS. The Verizon/Incompas proposal recommends that the Commission implement a one-time adjustment to price-cap levels over no more than a two-year period.

Frontier, Windstream and Sprint are recommending the FCC add two modifications to the phase-in of price-cap reductions for TDM-based BDS services.

“In light of the buying and purchasing power that the largest ILECs and their affiliates have in the BDS marketplace, and the uniquely large impact that abrupt regulatory changes would have on the business operations of smaller ILECs, Frontier, Sprint and Windstream have agreed that these proposed transition-related rules should function as a ‘default’ to which certain modifications to the transition mechanism are warranted,” the letter said.{ad}

The recommended default transition would apply to all price cap ILECs that do not qualify for one of the two modified transition mechanisms.

The first modified transition would apply to any ILEC that is not the largest price-cap ILEC in the state, but serves a top 100 MSA (metropolitan statistical area); and provides at least 25 percent of the broadband connections provided by all ILECs in the MSA. The second modification would apply to any price-cap ILEC that does not serve any top 100 MSA in the state, or operates in a non-contiguous area.

“As in these previous proceedings, the record in this proceeding supports the modified transitions proposed herein,” the letter said. “In particular, the record demonstrates that flash cuts to BDS rates may have a greater impact on smaller ILECs given their increased dependence on BDS revenue streams, and that these carriers may need additional time to implement pricing reform proposals.”

This past spring, the FCC proposed a new “technology-neutral framework” to regulate the market for BDS. Under its proposed framework, the FCC would classify a market as either competitive, in which service providers would be subject to little oversight, or noncompetitive. In a noncompetitive market, providers would be subject to “one set of tailored rules” that would include “the use of price regulation and the prohibition of certain tying arrangement that harm competition,” according to the FCC’s May 2 further notice of proposed rulemaking (FNPRM).


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