Appeals Court Denies Stay to FCC’s BDS Reform

A federal court has denied a motion to block the Federal Communications Commission’s regulation rollback of the $45 billion business data services (BDS) market.

In April, the FCC adopted an order stating that because of “substantial and growing” competition in the BDS market, legacy regulation “inhibits the investment required for the transition of BDS from legacy TDM networks to high-speed Ethernet connectivity.” The order includes ending price caps on special access service.

Windstream, Incompas and BT were among the group that asked for the stay. The Eighth Circuit Court of Appeals denied the motion.

The motion was to stop the order from going into effect before the court hears the case against it.

FCC’s Ajit Pai

FCC Chairman Ajit Pai praised the court’s decision.

“The court’s decision to let our modernization of our business data services rules take effect is an important – though unsurprising – affirmation that the commission thoroughly analyzed our massive data collection to establish a robust, forward-looking competitive framework,” he said. “These reforms will encourage vigorous investment in next-generation networks, which is critical if we are going to bridge the digital divide in our country.”

Windstream, Incompas and BT wouldn’t comment on the court’s decision, a victory for incumbent telcos AT&T, CenturyLink and Verizon.

In their motion for stay, the group of providers and associations said competitive carriers will “suffer massive, imminent, and unrecoverable harm.”

“A stay will benefit business users that would otherwise suffer the absence of competition, especially small businesses and businesses with multiple locations,” it said. “By contrast, maintaining the status quo will harm no one, including the incumbents that are currently charging regulated rates that guarantee more than a reasonable return.”

There also is no evidence that existing regulations result in rates that are too low, according to the motion.

The Internet Innovation Alliance said the court’s action ensures that the FCC’s rules that “encourage greater investment and facilities-based competition among the networks serving American businesses will continue to move forward.”

“Given that network infrastructure typically serves both businesses and consumers, all Americans stand to benefit from the advancement of policies that promote investment and deployment in high-speed 21st century broadband services and applications,” it said.