FCC Regulatory Reform Taking Another Positive Step Forward

By at 3 April, 2017, 8:30 pm

Photo courtesy of the Federal Communications Commission (FCC)

by Raymond J. Keating-

Under its previous chairman, Tom Wheeler, the Federal Communications Commission (FCC) managed to find, or more accurately, seemed to manufacture reasons to regulate the broadband industry. Of course, this effort stood in stark contrast to the realities of robust innovation and competition that have blossomed and spread throughout the broadband market thanks to strong private-sector investment incentivized by a light regulatory touch.

A New Direction

Thankfully, under its new chairman, Ajit Pai, the FCC is coming back down to earth, with policy being formulated in accordance with economic reality.

That is evident, once again, with a proposed, distinct change in regulatory policy directed at the Business Data Services market via a March 30 FCC draft report and order for consideration by the commission at its April open meeting. The Business Data Services market – also known as the special access market – refers to the connections between telephone networks and the Internet with, for example, businesses, government buildings, office parks, cell sites, ATMs, retail outlets, and so on. The Wheeler FCC clearly was looking to re-regulate these services.

The Pai FCC, however, understands the ills of over-regulation, and is looking at what is actually going on in the marketplace. As noted in the report and order’s fact sheet, this FCC “recognizes the presence of strong competition in the business data services market, and therefore eases the regulatory burdens on providers of these services. By modernizing our rules, the draft Order will allow market forces to continue working to spur entry, innovation and competition in the vibrant business data services market.”

Specifically, it was found that “that competition is robust and vigorous in the markets for packet-based business data services, certain other high-capacity business data services, and transport services so that continued legacy regulation is more likely to impede the introduction of new services and raise prices than to benefit consumers.” And in areas where competition has yet to flourish, a form of price cap regulation would be maintained.

This agenda would point FCC policy in a sound direction, encouraging investment and innovation, which, of course, would be positive for the small businesses that use these services, as well as smaller firms in the telecommunications sector itself, and would serve as a spur to economic growth.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP: The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.


News and Media Releases