Public Safety Served by Enterprise Communications Networks, Not Public Utility Regulation

On March 31, AT&T and the FirstNet Authority announced that total connections to the FirstNet nationwide public safety broadband network increased to 7.1 million across 30,000 law enforcement and first responder agencies during the first quarter of 2025. FirstNet was constructed and is operated by AT&T, and it is overseen by FirstNet Authority, an agency in the NTIA.

As explained in my February 2024 blog post, "FirstNet's Public Safety Communications Network Continues to Grow,"widespread adoption by law enforcement and first responder agencies of FirstNet – as well as competing enterprise networks, such as VerizonFrontline and T-Mobile's T-Priority – undermines the Biden FCC's public safety rationale for its now-vacated public utility regulation of broadband Internet access services. 

 

In the Securing and Safeguarding the Open Internet Order (2024), the Commission officially rebranded public utility regulation as a public safety measure. Public utility regulation has a long history. However, the idea that public utility regulation was vital to public safety and national security appears to have been entirely unknown until late 2023, when the Biden FCC launched its efforts to impose such regulation on high-speed broadband Internet services under Title II of the Communications Act. What a coincidence!

 

The Securing and Safeguarding the Open Internet Order was vacated by the U.S. Court of Appeals for the Sixth Circuit on January 2 of this year. In MCP No. 185 (2025), the court concluded that broadband Internet services are best understood as lightly regulated "information services" under Title I of the Act and not "telecommunications services" under Title II.

 

On April 28, the Free State Foundation filed reply comments in the FCC's Delete, Delete, Delete proceeding. In those reply comments, FSF President Randolph May and I recommended that the newly constituted FCC, under Chairman Brendan Carr's leadership, delete the now-vacated public utility rules from the Code of Federal Regulations. FSF's reply comments also recommend that the Commission delete many other outdated, harmful, and unnecessary regulations of communications services and close proceedings in which the agency previously had recommended additional regulations. FSF's initial comments in the Delete, Delete, Delete proceeding – focused on outdated, harmful, and unnecessary regulations of video services – were filed on April 11.

FirstNet's "Priority and Preemption" Secures Public Safety Communications

On April 26, FirstNet and the AT&T Policy Forum hosted an event titled "Looking Back – The Ultimate Stress Test for FirstNet." The event included a conversation with Congressman Bob Latta and a panel event discussing public safety communications and FirstNet's operations over the past year. The discussion highlighted the importance of FirstNet's "priority and preemption" feature that ensures public safety users have solid connections to communicate in emergencies or for other public safety purposes. 

Paragraph 24 of the FCC's October 2020 Restoring Internet Freedom Remand Order spotlighted FirstNet and its dedicated public safety service:

The record reflects that many public safety entities have access to and make use of dedicated public safety-specific and/or prioritized, specialized enterprise-level broadband services for data communications between public safety officials Perhaps the most important example of a dedicated network is the Congressionally-created First Responder Network Authority (FirstNet). In 2012, Congress passed the Middle Class Tax Relief and Job Creation Act, which in part directed "the establishment of a nationwide, interoperable public safety network" to "ensure the deployment and operation of a nationwide, broadband network for public safety communications" —a resilient network capable of supporting both data and voice communications. The law granted 20 megahertz of spectrum to be used for the network and allocated $7 billion of funding. FirstNet offers service priority and preemption, which allow first responders to communicate over an "always-on" network… The record reflects that "[m]ore and more, public safety is relying on the FirstNet core and public safety’s own dedicated network for critical public safety communications – one that offers faster performance than commercial networks."  

In the next paragraph, the FCC's order offered additional insights into the public safety communications and dedicated or prioritized broadband Internet services: 

"[O]ther service providers have recently begun offering or enhanced their public safety services to compete with FirstNet." For example, Verizon offers services designed for first responders and public safety entities through its public safety private core that include the ability to prioritize public safety communications to ensure that they stay connected during emergencies. Such services also provide an extra layer of assurance that public safety communications will continue to operate during peak times. In addition, public safety users "have access to several … enhanced services" from Verizon, including Mobile Broadband Priority Service and data preemption. These services "provide public safety users priority service for data transmissions" by giving users priority over commercial users during periods of heavy network congestion and "reallocat[ing] network resources from commercial data/Internet users to first responders" if networks reach full capacity. 

The view expressed by the FCC's order are consistent with comments filed in the proceeding by Free State Foundation President Randolph May and I. As FSF's comments stated: "Paid prioritization arrangements offer a valuable option for government agencies responsible for public safety to use communications services that feature higher quality and improved reliability compared to traditional best-efforts broadband networks."

FCC Should Finally Close its Proceeding on Business Data Services

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.

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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).

Consolidated/FairPoint Merger Merits Proper and Prompt Review in States

The proposed merger between Consolidated Communications and FairPoint Communications, if approved by regulators, would likely enhance competition for broadband services. So far, the transaction has sailed through federal agency reviews. Yet the proposed Consolidated/FairPoint merger still faces parallel reviews by several state public utility commissions (PUCs). Surely, the transaction deserves state PUC reviews that are timely and focused on likely competitive effects.

In a transaction worth $1.5 billion, Consolidated Communications and FairPoint Communications would combine their fiber networks, thereby expanding their Ethernet footprint and serving multi-location enterprise broadband customers as well as wireless backhaul customers with faster speeds and better reliability. The proposed Consolidated/FairPoint merger poses no apparent downside for residential or business customers of voice or broadband services. The two providers do not compete head-to-head anywhere. And neither party to the merger ranked in the top 10 for Ethernet ports in the U.S. at mid-year 2016.

Not surprisingly, the transaction speedily received antitrust clearance by the Federal Trade Commission. A review by the Federal Communications Commission, which elicited only one public comment, will likely be concluded in short order. However, the proposed Consolidated/FairPoint must still undergo a multiplicity of regulatory reviews by state PUCs. It has been reported that the transaction must receive approval in 17 states.

Mergers that are pro-competitive on their face should not be slowed down by numerous and overlapping reviews by federal and state regulatory agencies. More particularly, parallel state PUC reviews of merging telecommunications providers ought to consider only merger-specific competitive effects and be conducted in a timely manner. State PUC merger reviews that fail to follow such a course are highly problematic. As I explained in a March 6 blog post regarding the proposed CenturyLink/Level 3 merger:

State PUC regulators can succumb in merger reviews to many of the temptations that have plagued FCC reviews. Regulators can become preoccupied with non-merger specific issues and use their leverage to impose regulatory conditions on their approval that are unrelated to the transaction or perhaps more fit for industry-wide rulemakings.

Going forward, state PUCs reviewing the proposed Consolidated/FairPoint merger should consider only the transaction’s competitive impact. State PUCs should not impose unnecessary conditions and they should conclude their reviews promptly.

Focus on CenturyLink/Level 3 Merger Benefits Should Lead to Prompt Review in States

The proposed merger between CenturyLink and Level 3 Communications, if approved by regulators, would likely enhance competition in the market for enterprise broadband services – with no effect on residential broadband services. The FCC is in the midst of conducting its review of the merger. At the same time, states in which CenturyLink and Level 3 provide service are conducting parallel reviews. While public utility commissions (PUCs) in states such as Ohio and Utah have already approved the proposed CenturyLink/Level 3 merger, other states, such as New York and perhaps Washington, apparently intend somewhat lengthier and more detailed reviews.

The parallel state reviews can be problematic unless conducted properly and without delay. So, state PUCs now considering the proposed CenturyLink/Level 3 merger ought to act with dispatch and focus on merger-specific competitive effects only. The FCC can provide PUCs encouragement in these respects by directing its review of the proposed CenturyLink/Level 3 merger to the likely public benefits and by completing its review proceeding with dispatch.

As explained in my Perspectives from FSF Scholars paper, the “CenturyLink/Level 3 Merger Should Bring Pro-Competitive Public Benefits” in the enterprise broadband market. Enterprise broadband services deliver high volumes of data with performance quality guarantees using dedicated network facilities. These services typically are negotiated at arms-length and used by sophisticated business customers, not residential consumers.

A combined CenturyLink/Level 3 would be better able to serve business customers in multiple geographic locations, relying more on its own fiber network and less on capacity leased from third-party providers. Increased on-network capabilities and end-user connections offer superior technical performance and responsiveness to business customers. Many business customers prefer use of a single provider relying on a single network to meet their enterprise broadband needs. Importantly, the proposed merger presents no genuine concerns for residential broadband or video consumers, since Level 3 serves neither of those residential markets.

By combining resources and thereby creating new efficiencies through economies of scope and scale, mergers enable providers of enterprise broadband or other services to better serve consumers through enhanced offerings, lower prices, or both. It is therefore important that proposed mergers subject to review – particularly transactions that are pro-competitive on their face – be considered promptly and properly. On its face, the proposed CenturyLink/Level 3 certainly appears to be pro-competitive. It ought not be bogged down by multiple regulatory reviews that move slowly or that become preoccupied with issues unrelated to the transaction. 

My 2010 FSF Perspectives from FSF Scholars paper, “Multiple Government Regulatory Reviews Burden Telecom Mergers with Too Many Conditions,” explained how state PUC reviews of mergers can result in costly, time-consuming, redundant reviews by multiple regulators. State PUC regulators can succumb in merger reviews to many of the temptations that have plagued FCC reviews. Regulators can become preoccupied with non-merger specific issues and use their leverage to impose regulatory conditions on their approval that are unrelated to the transaction or perhaps more fit for industry-wide rulemakings. 

As I’ve previously written, “[t]he individualized nature of mergers means that onerous conditions amount to company-specific regulation that may result in unequal and unfair treatment.” Lengthy merger reviews become particularly susceptible to interest group special pleading rather than sound analysis of potential competitive effects. And by imposing conditions on merging providers of IP-enabled broadband services, state PUCs can engage in de facto regulation outside their typically narrow scope of delegated authority. Given that one or more federal authorities – such as the U.S. Department of Justice, the Federal Trade Commission, and the FCC – routinely review major proposed mergers, there is indeed reason to question whether state regulators should be conducting such duplicative reviews.

State PUCs reviewing the proposed CenturyLink/Level 3 merger should exercise self-restraint. They should avoid issues unrelated to the transaction and not impose needless administrative expenses or lost market opportunity costs through drawn-out proceedings. For those state PUCs that examine the proposed CenturyLink/Level 3 merger, it should be evident that the transaction will likely improve competitiveness in enterprise broadband services and that residential broadband and video subscribers will not lose a provider – or be impacted at all.

Thus, the states should not allow their reviews to place unnecessary conditions or shackles on what looks to be a pro-competitive merger, or to unduly delay its consummation.