In a motion filed with the Eighth Circuit Court of Appeals on Monday, Windstream joined BT Americas, Inc., Incompas and the Ad Hoc Telecom Users Committee in seeking a judicial stay of the FCC’s April 20 order which relaxes or lifts regulatory requirements for many providers of special access, or business data services (BDS), pending court action on the petitioners’ pending claim that the FCC order should be overturned on grounds that it is arbitrary, capricious, and constitutes an abuse of discretion.
The BDS order is scheduled to go into effect on August 1. Departing from the regulatory approach and tentative conclusions proposed in a rulemaking notice issued last year by the FCC, the BDS order concludes that the U.S. market for BDS services is largely competitive. As such, the FCC decided to lift price regulations for packet-based BDS services that operate at speeds in excess of 45 Mbps. The order also eliminated price regulation of TDM BDS in counties where (1) at least half of the buildings are located within a half mile of a location served by a competitive BDS provider, or (2) 75% of the census blocks have at least one cable network provider.
Seeking review of the BDS order at the D.C. Circuit Court in May, Windstream, Sprint and various other petitioners also charged the FCC with violating the notice and comment procedures of the Administrative Procedures Act. As it highlighted the FCC’s April 2016 statement that “competition remains stubbornly absent in many parts of the [BDS] marketplace,” Windstream lamented that “small and medium size businesses will be unduly harmed by an unregulated [BDS] marketplace in which very little or no competition exists in more than 90% of business locations across the country.”
In seeking a stay of the August 1 effective date, the petitioners argued that their underlying appeal of the BDS order is likely to succeed on the merits because the FCC “erred (1) by arbitrarily and capriciously abandoning rate regulation for low-bandwidth BDS in more than 90% of buildings, (2) eliminating rate regulation of transport services everywhere, and (3) failing to provide adequate notice before sharply departing from the approach proposed in the notice of proposed rulemaking.” The petitioners also warned that they would suffer “massive, imminent and unrecoverable harm” if the BDS order is allowed to go into effect pending further review. Declaring, “a stay will benefit business users that would otherwise suffer the absence of competition,” the petitioners advised the court that “maintaining the status quo will harm no one, including the incumbents that are currently charging regulated rates that guarantee more than a reasonable return.”