Lariat Tries to Lasso FCC's BDS Item Before Vote

Says FCC should study impact on transport service prices, access

Lariat.net—which bills itself as the first WISP (wireless internet service provider), it launched in 1992—has told the FCC, or at least the staff of lone Democrat Mignon Clyburn, that the proposed broadband business data service (BDS) deregulation order on tap to be voted April 20 needs more economic analysis first.

It joins INCOMPAS and the Small Business Administration's advocacy office in seeking to delay the vote.

In a meeting with a top Clyburn staffer this week, Lariat owner and founder Brett Glass says the order's deregulation does not take sufficiently into account the ability and incentive of the soon-to-be deregulated dominant carriers to price internet transport services to WISPs like the Laramie, Wyo.-based Lariat at above-market prices, if they provide access to it at all.

"Unfortunately, incumbent providers are well aware that if the price of a 'middle mile' connection to the Internet is such that the WISP cannot at least match the retail price of existing service in town, the business case fails and the WISP cannot deploy at all," Glass said in the meeting, according to an ex parte filing with the FCC. "Therefore, incumbent telephone and cable companies often attempt to price wholesale transport (in units of megabits or gigabits per second per month) above the retail price of Internet service. As a result, competitors cannot deploy without duplicating essential facilities – which, by definition, are economically infeasible to duplicate and which have usually been constructed using subsidies not available to WISPs."

Glass is not arguing for heavy regs on retail business service, or even any retail regs at all, saying that a truly light-touch approach would focus on the wholesale transport market.

He says the overpricing and failure to deal at all in some cases is just the sort of thing the new chairman said the FCC needed to take into account. "I expressed our surprise [to Clyburn's advisor] that, given Chairman Pai's recent announcement that the FCC was to perform serious economic and cost/benefit analysis, the draft Report and Order failed to consider these fundamental economic concerns, as well as my hope that the FCC's new Office of Economics and Data would be consulted about them before the item was finalized."

Glass wants the FCC to open up a notice and comment period before voting the order. The order stems from a proposal by Tom Wheeler and the comments on that proposal, which did not get a vote after Wheeler pulled it from the agenda post-election following warnings from Congressional Republicans against 11th-hour regs.

The Wireless Internet Service Providers Association (WISPA) wrote the FCC this week to offer similar criticisms of the item's treatment, or more to the point lack of treatment, of wholesale service.