FCC Chairman Tom Wheeler disclosed in a blog post last Friday that he has begun circulating a draft further notice of proposed rulemaking (FNPRM) among his fellow commissioners that would eliminate tariffing requirements for most providers of “special access” business data services while retaining price cap regulation of special access carriers in non-competitive markets. Scheduled for a vote at the FCC’s April 28 open meeting, the draft FNPRM would constitute the first step in the FCC’s efforts to update the agency’s special access regulatory framework to facilitate the transition from legacy circuit-switched services to IP-based, packet-switched services.
On the eve of Wheeler’s announcement, a number of interested parties urged the FCC to replace the existing special access regulatory regime with “a permanent policy framework for all dedicated services” that would be “technology-neutral.” The draft FNPRM would also address this recommendation by extending the rules—which, until now, have applied to business data facilities co-located in incumbent local exchange carrier offices—to providers of special access services in the cable industry. While Wheeler offered few specifics on how the FCC would define non-competitive markets where price cap regulation of special access services would remain in force, Wheeler said such markets could be defined based on geography, data service speed, or the types of customers served.
At the same time the FCC conducts its vote on the FNPRM, the agency will also vote on a related draft order that corresponds to a recent FCC investigation into the special access tariffing practices of various large carriers. That investigation was triggered by competitive carrier complaints regarding special access tariff pricing policies that were instituted by the carriers in question and that require large volume commitments and carry high termination fees. According to Wheeler, provisions of the draft order would “bar certain specific contractual practices that slow down the switch from legacy TDM services to newer IP-based services.” The draft order would also prohibit all-or-nothing contract provisions, early termination fees, and short-fall penalties that discourage special access customers from switching to alternate providers or business data technologies. The draft FNPRM, meanwhile, would solicit comment on how the contractual practices outlined in the draft tariff investigation order should be treated under the FCC’s proposed special access regulatory framework.
With respect to the FNPRM, Wheeler said the FCC’s goal is to “move forward to adopt a final order in 2016.” Predicting that rules contained in both the draft FNPRM and draft order would “end [an] enormous drag on our economy,” Sprint said it “looks forward to working with the Commission as it moves to adopt a competitive, sustainable framework.” A spokesman for the National Cable & Telecommunications Association urged the FCC to “reject any call to impose new, onerous regulations on an industry that is stepping up to offer meaningful choices to business customers,” warning: “the FCC will not achieve competition if it burdens new . . . entrants with regulation.”