FCC Moves To Make Life Easier For Business Broadband Monopolies

from the do-not-pass-go,-do-not-collect-$200 dept

By now, most people understand that the residential broadband market simply isn't very competitive. They also understand that's in large part due to the lobbying and financial stranglehold many providers have over both state and federal lawmakers and regulators. But however uncompetitive the residential broadband market is, the business "special access market" (often called Business Data Services (BDS)) is notably worse. This important but overlooked segment of the telecom market connects schools, cell towers, ATMs, retailers, and countless others to the internet at large.

But consumer groups and smaller companies for years have complained that this segment suffers under an absurd amount of monopoly control, resulting in many companies and organizations paying sky-high rates for basic connectivity. According to the FCC's own data (pdf), in the lion's share of markets, 73% of the special access market is controlled by one provider (usually AT&T, CenturyLink or Verizon), 24% usually "enjoys" duopoly control, and only a tiny fraction of markets have more than two choices of BDS providers providing this key connectivity.

After ten years of industry bickering and lobbying, Tom Wheeler last year began seriously exploring changes to special access rules, including price caps on how much these monopolies and duopolies can charge smaller companies (and in wireless, smaller competitors). By and large the FCC avoids broadband price caps like the plague, and the effort to impose limits on the BDS market reflected just how incredibly uncompetitive the special access market had become. But the rules were never finalized, and new FCC boss Ajit Pai was quick to throw away the decade-long reform effort.

Instead, Pai has proposed deregulating this captive market even further, a massive win to the incumbent monopolies and duopolies that control it. In a blog post, the FCC boss was quick to insist that competition in this sector is actually growing, and his (read: AT&T and Verizon's) proposal will be sure to keep regulations in place in areas where it isn't:

"The extensive record compiled by the Commission’s excellent staff shows substantial and growing competition in many areas of the country, thanks to new market entrants like cable companies. Where this competition exists, we will relax unnecessary regulation, thereby creating greater incentives for the private sector to invest in next-generation networks. But where competition is still lacking, we’ll preserve regulations necessary to prevent anti-competitive price increases."

But, as with much of Pai's particular brand of FCC leadership, what the FCC boss says -- and what he does -- are often very different things. Ars Technica is quick to highlight that Pai's proposal has a rather unique definition of "competition." Namely, the proposal declares a market "competitive" if there's just one additional broadband provider anywhere in a half mile radius:

"Pai's definition of "sufficient competition" has drawn fire. The plan would treat an entire county as competitive "if 50 percent of the locations with BDS demand in that county are within a half mile of a location served by a competitive provider." A county would also be considered competitive if 75 percent of Census blocks in the county have a cable provider."

Pai is part of a segment of revolving door regulators and other industry allies that often comically deny any competition issues in the broadband space -- whatsoever. Their solution is consistently blind and blanket deregulation, laboring under the belief that less regulatory oversight -- combined with no real competition -- somehow magically forges telecom Utopia. And while deregulation certainly does aid competitive, innovative markets, blind deregulation of the telecom market time and time again only serves to make competition issues worse. Just ask a Comcast customer.

The FCC is poised to vote on the deregulation of the uncompetitive BDS market on April 20 (and likely already voted to approve this effort by the time you read this). Lawmakers like Senator Ed Markey and Rep. Ed Doyle had urged the FCC to delay the vote:

"In the BDS market, we need more protections for competitors and small businesses, not great market control by incumbents,” they wrote. “We are concerned that the proposed BDS Report and Order does not adequately promote competition or apply appropriate pricing protections where competition does not exist."

BDS being an important but wonky and under the radar market for consumers and the press -- Pai should be able to ram this vote through without much public scrutiny. As such, Pai's moves to gut rules governing the BDS market are set to join a growing chorus of other "accomplishments" we've seen so far under Pai, such as making it easier for prison monopolies to rip off inmates, the dismantling of efforts to improve cable box competition, the erosion of efforts to bring broadband to the poor, and his looming attempt to kill net neutrality. You'll notice one, consistent beneficiary to Pai's agenda -- and it sure as hell isn't you.


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  • identicon
    Anonymous Coward, 20 Apr 2017 @ 6:40am

    Cox sucks .. just like everyone else.

    I pay $110.00 a month to Cox for 25x5 "Business" internet service at my house *just* so that I can run my own email servers et al.

    Why do they charge so much? Because they can. My only other option is AT&T DSL. lol. As that is even an option.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Apr 2017 @ 7:04am

    Angelic Politiicianns & Regulators

    ".... due to the lobbying and financial stranglehold many providers have over both state and federal lawmakers and regulators. "

    _______

    That "stranglehold" is precisely due to the many corrupt "state and federal lawmakers and regulators" who fail to represent the interests of their citizen constituents, but eagerly respond to big-money special interests.

    The private business providers are helpless to coerce & rip off consumers... without government-muscle backing them.

    You are viewing the problem thru the wrong end of the telescope.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 Apr 2017 @ 7:56am

      Re: Angelic Politiicianns & Regulators

      Yea, there is no end to the number of people seeking a politician to save them from "the evils capitalism" when the "evils of regulation" are even worse.

      Even though the "Free-Market" was destroyed a LONG time ago, I still see people ignorantly blaming it like some bogeyman.

      It is amazing how many people here that profess a hate for the telco/isp/cable lobbies but still keep giving them everything they want under the guise of regulation. These guys have perfected the art of making your enemies fight FOR you.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 20 Apr 2017 @ 1:25pm

        Re: Re: Angelic Politiicianns & Regulators

        Or it simply isn't possible to have a competitive marketplace in this industry without regulation. Unless you're willing to let any Mom and Pop company that wants to run an ISP dig up your lawn to put down fiber.

        reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 Apr 2017 @ 11:37am

      Re: Angelic Politiicianns & Regulators

      The crux of the problem has been the monopoly on infrastructure and that monopoly is a consequence of politicians "deregulating" something they didn't understand.

      If it is pro- or anti-regulation that creates the problems/solutions in the first place is irrelevant. The discussion is merely a smokescreen.

      What Pai has done so far will have very little possible effect on competitive markets since the infrastructure problem is unchanged, while it is beyond a doubt, a turn for the worse in uncompetitive markets since it reduces/removes any "consumer protection" in the name of increasing the value of remaining a no choice market.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 20 Apr 2017 @ 12:11pm

        Re: Re: Angelic Politiicianns & Regulators

        More misinformation and ignorance.

        "The crux of the problem has been the monopoly on infrastructure and that monopoly is a consequence of politicians "deregulating" something they didn't understand."

        If a crux fell on your face you still would not know what the crux was. Regulation is every bit as prone to monopoly as deregulation, the difference is that it is harder to fight a regulatory/government blessed monopoly than an unregulated one.

        "If it is pro- or anti-regulation that creates the problems/solutions in the first place is irrelevant. The discussion is merely a smokescreen."

        Smokescreen or not, it damn sure is relevant you nitwit, it's just that the devil is, as usual, in the details! I did not realize Cracker-Jack was packaging surprise FCC regulatory info pamphlets instead of toys these days!

        "What Pai has done so far will have very little possible effect on competitive markets since the infrastructure problem is unchanged, while it is beyond a doubt, a turn for the worse in uncompetitive markets since it reduces/removes any "consumer protection" in the name of increasing the value of remaining a no choice market."

        Finally something I can agree with you on, consumer protections are being removed, in fact, that is what they meant by deregulation to begin with, but it still did not stop the republicans from throwing their necks out sucking party cock!

        And if you need the crux of a problem here it is.

        When government says regulation
        Democrats hear "consumer protections" regardless of reality.
        When government says deregulation
        Republicans hear "consumer liberty" regardless of the reality.

        Everyone is getting double fucked because you party sycophants can't see past the shitty nose on your faces because you heads are up each party's ass!

        The only thing YOU KNOW is what your party mouth pieces have TOLD YOU to know! Otherwise you would not have stated such ignorance!

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Apr 2017 @ 7:06am

    so as long as the ordinary people are getting screwed, not getting any sort of reasonable deal or protection, under this tosser Pai, the FCC is prepared to actually do something possible. if no one in position of power can see it or is bothering to look, it stands out like a poodles plums that the only thing he is concerned with is making sure that big businesses in their various guises are going to get more profit for giving crappier services, gaining more monopolies/duopolies/tripolies (is there such a word?) while tying customers up in more knots than they have ever seen!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Apr 2017 @ 7:19am

    Ajit Pai is the definition of regulatory capture.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 Apr 2017 @ 8:04am

      Re:

      Yes, but so is the FCC. The monopoly state that was setup was created initially by the FCC itself. Lets take a brief glimpse of its history...

      https://en.wikipedia.org/wiki/Federal_Communications_Commission
      "From monopoly to competition
      See also: History of AT&T

      The important relationship of the FCC and the American Telephone and Telegraph (AT&T) Company evolved over the decades. For many years, the FCC and state officials agreed to regulate the telephone system as a natural monopoly.[52] The FCC controlled telephone rates and imposed other restrictions under Title II to limit the profits of AT&T and ensure nondiscriminatory pricing.

      In the 1960s, the FCC began allowing other long-distance companies, namely MCI, to offer specialized services. In the 1970s, the FCC allowed other companies to expand offerings to the public.[53] A lawsuit in 1982 led by the Justice Department after AT&T underpriced other companies, resulted in the Breakup of the Bell System from AT&T. Beginning in 1984, the FCC implemented a new goal that all long-distance companies had equal access to the local phone companies' customers.[54] Effective January 1, 1984, the Bell System’s many member-companies were variously merged into seven independent "Regional Holding Companies", also known as Regional Bell Operating Companies (RBOCs), or "Baby Bells". This divestiture reduced the book value of AT&T by approximately 70%.[55]"

      You can easily tell that the FCC created the problem it decided to solve. In fact this is government in general. They first create problems, and then campaign against them, with each successive effort saddling the people with more burdens each time. Sometimes the businesses are saddled but not usually. Businesses already know one of the best ways to get the RIGHT regulation in is to bitch about the regulations they like while publicly ignoring regulations the hate. The keeps the public ignorant while they happily keep paying off the politicians, and the politicians get to tell their ignorant voters that they did something for them.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 20 Apr 2017 @ 9:04am

        Re: Re:

        Have you ever thought that regulation in itself is not the problem, but rather the short term nature of the leadership of the regulatory agencies. Most other countries make what are civil service position part of a career path, rather than a political appointment. That mean that those leading the regulatory effort are not also looking to ensure that they have a next job to go to.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 20 Apr 2017 @ 10:58am

          Re: Re: Re:

          I don't think that the short term nature of it has any significant impact. Any career politician, just like many of the ones we have already are the same as the other countries and their "career civil servants". The title and format of all these positions and agencies has very little meaning since there are multiple ways to skin a cat.

          The problem has been and will always be, how much liberty is removed from the consumer. And to be honest people do not even come close to understand that fundamental idea.

          With regulation they....
          Make it difficult for new players to join the game.
          Reduce the amount, quality, or economic viability of products.
          Shop businesses for campaign contributions or vice-versa.
          Allow government to use business as a surrogate spy network to monitor citizens.
          And by proxy of all of this, complete removed the Citizens seat at the bargaining table because you are given the illusion of choice in the matter when you really only got a bending over.

          Government likes regulation because they can bludgeon uncooperative businesses with threats or else.
          Businesses like regulation because they can buy off the bludgeon.




          "We really don't need you to agree with anything, all we need to do is get you 'THINK' you are getting your way while we fuck the shit out of you."

          ~Big Business!

          reply to this | link to this | view in chronology ]


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