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ACA To FCC: Keep 'Light Touch' Regulation Of Non-Dominant BDS/Special Access Providers

Agency Should Promote Competitive Investment In Lieu Of Regulation

PITTSBURGH, August 10, 2016 -  The American Cable Association called on the FCC to abandon its effort to regulate non-incumbent providers of Broadband Data Service (BDS), also called Special Access, because the record shows there is no economic rationale to regulate these providers and the cost of regulating non-incumbents would far outweigh any benefits, undermining the FCC's goal of spurring competition.  Further, the record demonstrates that the FCC should not be concerned that non-incumbents will offer BDS in non-competitive areas at rates, terms, and conditions that are not just and reasonable and are unjustly or unreasonably discriminatory.

"The FCC's abrupt decision to consider whether to regulate the rates of non-incumbent BDS providers runs counter to sound economics and antitrust policy and would undermine past and future investment and innovation in a service so critical to American businesses.  Moreover, it would reduce the very competition the FCC is trying to create.  In brief, the FCC's consideration of rules that would reverse course is an idea that only an incumbent would love," ACA President and CEO Matthew M. Polka said.

ACA explained its position in reply comments filed Aug. 9 in connection with the FCC rulemaking in which the agency is considering imposing rate regulation on non-incumbents in non-competitive markets.

In the reply comments, ACA said no party that submitted initial comments contradicted ACA by providing a cogent economic rationale for regulating the rates of non-incumbents.  ACA stressed that regulation is warranted only where a provider has market power resulting from a grant of monopoly rights from the government, and regulation should be reduced when that market power is diminished. 

ACA urged the FCC to adhere to limited regulation of non-incumbent providers, building on a policy framework established four decades ago.  Reversing course now, ACA warned, would put at risk about $300 million annually that non-dominant providers invest in BDS facilities. ACA noted that BDS providers have decreased their prices by 50% on average across all geographic areas and all customer segments - with some prices decreasing more than 70%.

In lieu of regulation certain to harm consumers and competition, ACA said the FCC should advance BDS competition by:

§  Recognizing that its non-dominant carrier regulatory policy has contributed significantly to entry by cable and other BDS providers;

§  Lowering barriers to deployment, such as by ensuring competitors have access to multi-tenant environments at reasonable rates, terms, and conditions, by adopting a "one-touch" make ready process for attachments to poles, and by requiring cost-based access to public rights-of-way; and

§  Reducing paperwork and other compliance requirements, which can be disproportionately costly for smaller BDS providers.

"The FCC has no basis to reverse course and regulate the rates of non-incumbents BDS providers anywhere in the country. Rather, the FCC should double-down and focus on facilitating additional investment," ACA's Polka said.

About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 750 smaller and medium-sized, independent cable companies who provide broadband services for nearly 7 million cable subscribers primarily located in rural and smaller suburban markets across America.  Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business.  For more information, visit http://www.americancable.org/

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