Tester, others caution about impact on rural communities

A group of nine U.S. senators from rural states today urged the Federal Communications Commission (FCC) to use the most up-to-date data in its analysis of competition in the business broadband market, noting that new regulation will only serve the public interest if the Commission relies on the most accurate information.

“For states with significant rural areas like ours, it is especially important for the Commission to use all the available data, including the data submitted earlier this year by the major cable operators, to both measure competitive markets accurately and ensure that the regulations for noncompetitive markets are based on the real cost to provide service, especially in low-density, high cost rural markets,” the group of senators, led by Jon Tester, D-Mont., wrote in a letter to FCC Chairman Tom Wheeler.

In addition to Sen. Tester, other signers include: Maria Cantwell (D-Wash.), Patty Murray (D-Wash.), Heidi Heitkamp (D-N.D.), Michael Bennet (D-Colo.), Amy Klobuchar (D-Minn.), Bob Casey (D-Pa.), Angus King Jr. (I-Maine), and Tammy Baldwin (D-Wis.).

Meanwhile, Washington State Gov. Jay Inslee added his voice to the concerns about the data in a separate letter to Wheeler.

“In particular, I share the concerns expressed to you in the recent letter, submitted by the Washington Utilities and Transportation Commission (UTC), that the Commission should use all the available data, including the data submitted earlier this year by major cable operators, to both measure competitive markets accurately and ensure that potential regulations in less competitive markets properly reflect marketplace conditions,” wrote Inslee, a Democrat.

The FCC suggested its proposed rule in hopes of advancing competition in the business broadband market, in which companies provide dedicated connections to competitors who need to reach fiber networks to market competing telecom services, and to enterprises that buy service in bulk.

However, a number of providers have argued the proposal is an overreach and will actually stifle investment in fiber infrastructure. This month, five U.S. network infrastructure providers formed the Invest in Broadband for America coalition to urge the FCC to get the facts right before issuing new regulations that would wrench billions of investment out of the market and discourage competition. The coalition members say that the FCC proposal is based on flawed analysis because it didn’t use the most up-to-date data filed with the agency by major cable providers, which show there is far more competition in the business broadband market than the FCC acknowledges.

The senators’ concerns are well-founded, said John Jones, Senior Vice President, Public Policy and Government Relations for CenturyLink, a member of the coalition. If infrastructure providers are forced to cut their rates because of the proposed FCC rule, he noted, expansion of broadband to rural America would be most endangered.

“The fact is that rural communities have been the last to benefit from the growth of high-speed internet and this proposal will only exasperate the situation when investment evaporates,” Jones said.

Michael Shultz, Vice President of Regulatory & Public Policy at Consolidated Communications, another member of the coalition, noted the bipartisan support of senators who are urging the FCC to get this right.

“We are particularly gratified to have the engagement of someone in the Democratic leadership in Sen.Tester,” he said. “For nearly a decade he has led the charge for rural broadband access and his views are widely respected on Capitol Hill.”

In their letter, the senators wrote that rural communities “depend on robust investments in business data services to connect small business and anchor institutions, support wireless data service, and enable economic development. Without it, the consequences for our constituents would be real and serious.”

The "Invest in Broadband for America" coalition (investinbroadband.org) is made up of CenturyLink, Inc. (NYSE:  CTL), Cincinnati Bell, Inc. (NYSE:  CBB), Consolidated Communications, Inc. (NASDAQ:  CNSL), FairPoint Communications, Inc. (NASDAQ:  FRP) and Frontier Communications (NASDAQ:  FTR).