In late January, FCC Chairman Ajit Pai wisely withdrew the Commission’s proposal for subjecting certain business data services (BDS) to onerous price controls. As described in my Perspectives from FSF Scholars paper, “Proposed BDS Rate Controls Are Anti-Investment, Arbitrary, and Fact-Challenged,” the misguided proposal would have diverted financial resources of regulated BDS providers away from construction of new fiber facilities. Although withdrawal of the BDS price control proposal is highly commendable, the BDS proceeding remains open. A problematic recent order by the FCC’s Wireline Competition Bureau points to the need for the Commission to finally close its BDS dockets.The March 15 order granted California Public Utility Commission (PUC) staff’s significantly-belated request for access to confidential proprietary data collected by the FCC in the proceeding. Previously, the FCC required BDS providers turn over massive amounts of information regarding their service locations and facilities. But now that the rate control proposal has been withdrawn and no new rounds of comments are scheduled, the FCC should at long last close the BDS proceeding. At the very least, the confidential data access request should be held in abeyance until such time as the FCC makes a more definitive decision about what to do next regarding BDS.
The request for confidential data is rather dubious given that the California PUC never requested access to that information during the proceeding’s comment periods. Nor did the California PUC file public comments with the FCC. Why seek such data now? The California PUC staff request for access to confidential BDS data is also odd given that California Public Utilities Code Section 710 provides that the state regulatory agency “shall not exercise regulatory jurisdiction or control over Voice over Internet Protocol and Internet Protocol enabled services,” except in certain limited circumstances.FCC closure of its BDS proceeding will prevent future dubious requests from other parties for access to sensitive proprietary data. FSF President Randolph May and I have previously described how “The FCC’s Special Access Proposal Is Infected With Special Pleading.” The FCC should not expand opportunities for special pleading by prolonging other parties’ ability to access BDS providers’ confidential information.
Moreover, closure of the BDS dockets constitutes the soundest policy approach to promoting investment and competition in the market. As the Free State Foundation’s comments in the BDS proceeding explained:
Given market advancements and ongoing competitive entry and investment, the wisest and preferred course of action is for the Commission to refrain from imposing new regulatory burdens on BDS services. Cable operators are investing significant amounts of private capital to compete in the BDS marketplace. Such investments pose far better potential for enhancing BDS competition and consumer welfare than new regulation.
Prior FSF writings on the FCC's BDS regulatory proceeding:
Seth L. Cooper, “Proposed BDS Rate Controls Are Anti-Investment, Arbitrary, and Fact-Challenged,” Perspectives from FSF Scholars, Vol. 11, No. 40 (November 14, 2016).
Reply Comments of the Free State Foundation, Regarding Business Data Services in an Internet Protocol Environment (August 9, 2016).
Randolph J. May and Seth L. Cooper, “The FCC’s Special Access Proposal Is Infected With Special Pleading,” Perspectives from FSF Scholars, Vol. 11, No. 26 (July 15, 2016).
Comments of the Free State Foundation, Regarding Business Data Services in an Internet Protocol Environment (June 28, 2016).