WASHINGTON D.C. — Today, the FCC proposed to extend price regulation of business broadband services to cable and fiber. The Commission voted on a Further Notice of Proposed Rulemaking (not yet public) that places the commission a step closer to imposing a new regulatory framework for the provision of business data services (a.k.a. special access), proposing burdensome new rules for cable and fiber-based providers and ex ante price regulations for their broadband services.
“The FCC is once again shredding long-standing bipartisan consensus,” said Tom Struble, Policy Counsel at TechFreedom. “The Clinton administration recognized that a light-touch approach to broadband regulation was essential to encouraging broadband competition, for both residential and enterprise customers, and that facilities-based competition is the best way to serve consumers. Hardly a year after flipping the script and imposing Depression-era common carrier regulations on broadband providers, the FCC doubles down, proposing to micromanage business practices and impose price caps on special access providers.”
“Until recently, the FCC had respected Congress’s preference for facilities-based competition over top-down regulation, and kept its hands off the special access market,” explained Struble. “Since deregulation in 1999, modern IP-based Ethernet and fiber alternatives have entered the market with huge success in serving buildings and businesses with greater communications needs — like backhaul for wireless cell towers or server farms. New entrants, such as cable companies and middle-mile providers like Cogent, have deployed enough infrastructure to now offer a competitive alternative for 86% of buildings with enterprise customers. Chairman Wheeler constantly invokes the mantra of ‘competition,’ but what he really means is driving prices down as much as possible by regulatory fiat, even if it means discouraging investment in competing networks.”
“The FCC’s actions today cast a pall over the market, with some economists predicting a massive decrease in fiber investment,” concluded Struble. “With 5G services and much denser wireless networks on the horizon, the need for high-speed backhaul will continue to grow. But this new regulation may significantly depress investment in the special access market, decreasing the number of fiber and other high-capacity service options for carriers, and perhaps significantly delaying the rollout of 5G wireless services. We can only hope the FCC appreciates the dire effects its regulation could have, and uses its broad discretion to forbear from applying this new special access framework in most or all markets going forward.”