AT&T: BDS 'Compromise' Is Giveaway - Broadcasting & Cable

AT&T: BDS 'Compromise' Is Giveaway

Says Verizon is offering up sleeves off its vest
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AT&T says the Verizon/INCOMPAS compromise business data services (BDS) proposal is "a sleeves off the vest" giveaway to Verizon that will slash AT&T prices and prove a "death knell" to broadband investment and 5G fiber deployment.

FCC chairman Tom Wheeler as recently as Tuesday argued that the BDS revamp was needed for the competitive backhaul pricing needed for 5G and thus key to universal wireless coverage.

In a filing with the FCC, which is basing its BDS reform proposal on the "compromise," AT&T said that proposal is "comically one-sided" in favor of Verizon.

It said that while Verizon is supposed to represent the incumbent exchange carriers (ILECs) in the proposal, it has been getting out of the wireline business and is "almost certainly" now a net purchaser of BDS, so its interests are more aligned with INCOMPAS, which represents competitive carriers, than with AT&T, which is the other major ILEC.

It says Verizon charges more for BDS than AT&T and would continue to be able to do so, while AT&T's rates would be cut well below the market price, and the competitive carriers (CLECs) INCOMPAS represents would be able to seek deep discounts of AT&T's lower rate.

Given that Verizon's BDS footprint is shrinking, says AT&T, the CLECs are willing to accept Verizon's higher rates in exchange for Verizon's support of forcing rate reductions on everyone outside Verizon's shrinking footprint.

“It is no surprise that Verizon’s business continues to evolve and focus on new technologies and new services that customers want," said a Verizon spokesperson. "The balanced compromise we reached applies a common framework to competing services.”

AT&T calls it a "conceit" that Verizon and INCOMPAS are on opposite sides of the debate and says the FCC should reject the faux compromise.

Cable operators are with AT&T in opposing the proposal, which could result in rate regulation for cable operators where there has been none before.

In April, the FCC proposed new rules on BDS "in an Internet Protocol environment"—rooted in the Verizon/INCOMPAS proposal—in which services or providers would potentially face regulation regardless of whether or not a carrier is considered an incumbent or a competitor. That raises the prospect for the first time of price-cap regulation for cable operators' business services, in the category now called BDS and formerly called special access.

Special access lines are dedicated connections used by businesses and institutions to deliver voice and data traffic, including for ATMs and credit card transactions. The regs have been applied to the ILECs, but the chairman thinks they should apply across the board where the FCC concludes more competition is needed.

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