FCC Draws Cable Industry Wrath Yet Again With Latest Regulatory Plan
The Federal Communications Commission moved ahead on Thursday with a proposal to regulate prices in the $20 billion market for business data services, drawing criticism from AT&T ( T ) and cable TV rivals. The FCC rules would regulate new entrants in the market — cable TV firms such as Comcast ( CMCSA ), Charter Communications ( CHTR ) and Time Warner Cable ( TWC ) — as well as the biggest providers of business data services, including AT&T, Verizon Communications ( VZ ) and local phone companies CenturyLink ( CTL ) and Frontier Communications ( FTR ). “The FCC is likely doing this as long-term insurance in case cable does eventually become dominant in any business markets,” said Paul Gallant, analyst at Guggenheim Partners, in a report. The high-speed connections are used for retail outlets, ATM machines and cell towers. Smaller telecom firms such as Level 3 Communications ( LVLT ) and Cogent Communications ( CCOI ) sometimes rent the “special access” lines to serve their customers. Some of these have complained over long-term contracts and termination fees. AT&T has lobbied against the new price regulation, while Verizon has been less opposed. Verizon plans to deploy 5G wireless services and may gain from lower prices for cell tower connections, analysts say. “Never before has the FCC sought to saddle new entrants with such heavy-handed pricing mandates — in any arena, let alone the broadband marketplace, (FCC) Chairman (Tom) Wheeler promised to shield from such regulation,” David Cohen, a Comcast executive VP, said in a blog. Wheeler’s FCC last year approved new “net neutrality” rules opposed by the cable TV industry. Cable TV firms have been been squabbling with the agency over broadband privacy issues, as well as the agency’s plans to open up the set-top box market to more competition. The new rules for business data services could be approved by the end of 2016. “Cable’s entry into the market for business data services over the last few years has resulted in improved services and lower prices for businesses all across America,” said the National Cable & Telecommunications Association in a statement. “It is disappointing that Chairman Wheeler is responding to this unquestionably positive development by asking the commission to consider imposing onerous new rate regulation on these competitive services.”