PxPixel
Smit: FCC Biz Broadband Regulation Counterintutive - Broadcasting & Cable

Smit: FCC Biz Broadband Regulation Counterintutive

FCC proposing potential rate regs on cable special access service
Author:
Publish date:

Comcast President Neil Smit says it is "counterintuitive" for the FCC to regulate cable business broadband service, as it has signaled it wants to do.

On a call with analysts Wednesday, April 27, Smit pointed out that FCC Chairman Tom Wheeler had recently claimed competition in so-called special access service.

Related: Senate Commerce Passes Bipartisan FCC Reauthorization

Wheeler has proposed to regulate the rates of whoever is providing business broadband, incumbent telcos, competitive telcos, or cable operators--if the FCC concludes there is insufficient competition.

"I can say that we compete every day for that business, and it seems kind of counterintuitive that the FCC would want to impose regulations on a new entrant such as us, who's bringing more competition to the business," he said.

Related: FCC Seeks Comment on ATSC 3.0 Petition

But he added that not having seen the proposal yet, it was premature to say anything more.

The FCC is planning to vote Thursday, April 28 on Wheeler's proposal.

Related: NBCU Cash Flow Rose 10% in 1Q

The FCC is proposing to phase out the presumption of regulating the historically "dominant carriers" -- the ILECs (incumbent local exchange carriers) -- to boost competition from nondominant" CLECs (competitive local exchange carriers) and cable competitors, and instead regulate either or all, as it deems necessary, in the name of boosting price and service competition for the "special-access" services.

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 — Verizon, AT&T, CenturyLink and Frontier — but the chairman thinks they should apply across the board where more competition is needed.

Related: Comcast Pans 'Expansive,' 'Harmful' FCC Set-Top Proposal

Wheeler has called that a tech-neutral approach. The National Cable & Telecommunications Association has called it off base, though it was referring to a compromise special-access proposal from Verizon and INCOMPAS along similar lines.

"[A]ny finding that competitive entry has been insufficient to affect the prices offered to consumers (e.g., because competitors do not offer the same range of services or their networks have limited geographic reach) necessarily means that the incumbent LEC remains dominant and should be regulated accordingly," the NCTA said.

Related: Broadband Labels Draw Eyeballs

Cable operators aren't particularly pleased with being in the FCC's rate reg sights.

The FCC is basing its special-access reforms on a major, years-long data-collection effort. The NCTA, which has had issues with that collection in the past, has said it would be "wholly inappropriate for the commission to reach any tentative conclusions about the state of the marketplace or the appropriate course for regulation based on a non-public analysis prepared by a single entity."

Related