BDS Reform: An Opportunity for Washington to Give Americans What They Demand

Last week, Americans went to the polls and voted to elect Donald Trump the 45th president of the United States. While much has been and will continue to be written about Trump’s unexpected victory, what is clear is that most Americans are unsatisfied with the status quo, fed up with business as usual in Washington and want policymakers to take decisive action to improve their lives.

This week, the FCC will hold its monthly open meeting, and the commission has a rare opportunity to respond to the voters and give them exactly what they’ve asked for. One of the items on this month’s agenda is the little known issue of business data services (BDS), and the commission has before it the chance to give Americans what they want, shake up the status quo, and make an immediate impact that will boost small businesses and make life a little more affordable for American consumers.

Business data services are the dedicated high-capacity broadband lines, which are critical to all aspects of our broadband economy. They power everything from large, global enterprises operating worldwide to new startups just emerging from mom and dad’s garage. They empower schools with the broadband connections needed to teach our children. They provide libraries the bandwidth to connect those without broadband access so they can find jobs, participate in civic life and join the digital economy. They support our most basic institutional structures from city hall to your local bank. These high-capacity services are vital to each and every community, but while they are vital to the everyday operations of businesses and consumers alike, they are also very costly.

Data collected by the FCC this year found that 97 percent of this high-capacity broadband market is controlled mostly by one — or, less often, two — providers. This lack of competition has cost the American economy billions of dollars and slowed investments in next-generation broadband technologies. In fact, according to the Consumer Federation of America, the BDS market has cost the U.S. economy $150 million over the past five years alone. This lack of choice has resulted in higher prices for businesses, which then pass along these exorbitant costs to consumers; less access to broadband services; and a decrease in network investment by competing network providers. It’s why organizations like ours have spent the last 10 years urging the FCC to take action.

Just a few weeks ago, we finally saw some real progress. After years of tireless work, the commission took an important step to restore competition in the long-broken BDS market by proposing a new framework that would provide much needed price relief.

However, while the proposal is an important first step to reforming this market, it is not a perfect item. We believe that the FCC must do more to establish clear data collection procedures in order to fix Ethernet services and bring down the exorbitant prices charged by monopoly providers. As the FCC looks toward the future of BDS competition, it is critical that they use this opportunity to build a foundation that will address the entire BDS marketplace.

While there is more work to be done to provide rate relief to Ethernet services, the chairman’s proposed reform is critical. The demand from voters to shake up the status quo was clear. By ending the monopoly and duopoly reign over BDS services the FCC can move quickly to begin delivering decisive action that will improve the lives of all Americans. Excessive BDS pricing costs jobs, economic growth, limits investments and strains local government budgets. A vote to open the market to competition would provide an immediate incentive for companies to reinvest in America by encouraging competitive providers to build wireless networks to better connect rural communities and close the digital divide.

The commission has made tremendous progress righting the wrongs of this broken, $40 billion market, but it means nothing unless the FCC passes this item. Our citizens, our institutions and our country deserve better. I urge Chairman Tom Wheeler and his fellow commissioners to move forward and approve this item without delay.


Phillip Berenbroick is a senior policy counsel of Public Knowledge, a nonprofit dedicated to the public’s access to knowledge and an open internet.

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