FCC unveils updated reforms for business internet connections

FCC unveils updated reforms for business internet connections
© Greg Nash

The Federal Communications Commission (FCC) on Friday proposed new rules that would bring reforms to a lucrative market for broadband connections used by some of the country’s biggest businesses.

The rules concern the so-called special access market for dedicated, high-capacity broadband connections. Such a connection might be used to link an ATM to a bank’s network or to bring broadband to a cell tower.

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It’s an obscure but lucrative field where some companies have long complained that major players dominate the market and abuse their market power.

“This is about consumers,” FCC Chairman Tom Wheeler said earlier this year when the commission voted to formally consider his proposal, which has been modified. “This is about winning the 5G future.”

Under the rules, the FCC would regulate the prices for special access connections that use legacy technology. In general, these legacy technologies are slower than the more modern Ethernet systems but still account for a substantial portion of the revenue generated in the market, according to a senior FCC official.

Ethernet connections will not be regulated in the same way. Instead, there will be a complaint process if the public feels that there are abuses in the market for those connections.

The senior official said the commission had determined that there was enough competition in the market for Ethernet connections that it did not need to implement strict price regulation over those deals.

Industry groups said they were glad to see the FCC has not put price caps on Ethernet but expressed dismay over the price caps on legacy services.

“Chairman Wheeler’s draft order appropriately recognizes that companies are investing and competing in BDS, and that price regulation of packet-based IP technologies is both unwarranted and unwise,” said Walter McCormick, president of the trade group USTelecom, in a statement.

“We are concerned, however, that the order appears to apply indiscriminate price regulation to legacy TDM services without regard to the state of competition in the local market, or economic factors such as company size, demographics, and geography of the service area.”

There are others who may think the FCC has not gone far enough. Some public interest advocates earlier this week said in a letter to Wheeler and other commissioners that they should impose rate regulation on Ethernet service as well.

The draft proposal has been circulated to all members of the commission. But officials there have yet to decide when to bring it up for a vote — but they could do so as early as late October.