US FCC ends price caps on many business data lines

US FCC ends price caps on many business data lines

FCC Chairman Ajit Pai made good today on his vow to reinstate a rule that makes it easier for big TV station owners to grow bigger.

The U.S. Federal Communications Commission has voted to deregulate the providers of the business data lines connecting broadband service to many small businesses, schools, hospitals, and ATM machines.

The FCC announced a proposal to remove price caps on the Business Data Services (BDS) telecom market that provides high speed data for essential services such as hospitals, banks, and mobile networks.

Former Chairman Tom Wheeler took up the issue in an item circulated last summer and it was eliminated last fall.

But Clyburn said the UHF discount "had outlived its purpose" and reinstating it would allow a broadcast station group to reach up to 78% of the nation's TV households.

"Today, the FCC is wiping the slate clean", he said. The agency's 2011 Information Needs of Communities Report (INC Report) recommended such action, and in a statement accompanying the 2012 proceeding, former Chairman Genachowski said, "Allowing noncommercial stations to partner with charities, churches, and other religious organizations, schools, and other non-profits to raise money for worthy causes will enable these stations to help meet the needs of their local communities".

In a 2-to-1 party line vote, the regulatory agency revived the so-called UHF discount.

Pai and the FCC's other Republican, Michael O'Rielly, opposed the 2016 change, arguing it was unlawful to alter the way the cap limits were calculated.

That's important for major companies like Sinclair Broadcast Group, Fox Television Stations, Nexstar, and ION Media Networks in making sure that they fall within the media ownership cap - in which no one company can own stations that collectively reach more than 39% of the country. Frank Pallone wrote to Pai Wednesday.

The FCC's decision to reduce price controls on bulk broadband access - known as business data services - came after Wheeler had proposed to tighten them previous year. The EU encouraged the FCC to rethink this proposal to consider how it might affect European companies.

"Price regulation, which is the government setting the rates, terms and conditions for special access, is seductive", Pai said.

The FCC voted to eliminate price regulations in competitive markets and reduce the rules in noncompetitive ones to try to lure new entrants. The changes will be phased in over three years.

Under this plan, the order will address two main issues: 50% of the buildings in a county are within a half-mile of a location served by a competitive provider and that 75% of the census blocks in a county have a cable provider present.

"The European Union is concerned that this sudden change of course, followed by the rapid action that is foreseen ... may be harmful for consumers and competition, and that it will further aggravate the imbalance in BDS regulatory practice that already exists between the USA and the EU and other nations", David O'Sullivan, the ambassador of the the USA, wrote in the letter to the FCC. "Ultimately, these price hikes will be passed on to consumers, and American families and businesses will pay dearly for the green light the FCC has given to the unfettered exercise of market power by dominant telecommunications providers".

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