As Senator Daniel Patrick Moynihan famously said, “Everyone is entitled to his own opinion, but not his own facts.” The FCC has spent the last year analyzing the data submitted in the Business Data Services proceeding to understand what is driving the BDS marketplace. It has committed to a “data-driven” rulemaking process in its analysis of whether additional BDS regulation is needed. The jury is still out as to whether that will take place.
As we explain in today’s reply comments, the facts show that competition in the BDS market is thriving. Even as of 2013, competitors had deployed competing facilities in more than 95% of MSA census blocks with BDS demand, and those blocks contain 97% of all BDS connections and 99% of business establishments. And, according to the NPRM, ILECs’ in-region market share was already under 50%. Undoubtedly, competition is now even more pervasive, particularly given that cable companies are now prioritizing the BDS marketplace to grow their revenues in the face of more intense competition for their core video offerings.
CLECs predictably attempt to downplay this competition, mostly by twisting the data to focus on areas where there is no BDS demand and by dismissing years of Commission and Department of Justice precedent under which it was recognized that the presence of sunk facilities constrain BDS prices. But the economist retained by the Commission found, based on his analysis of the facts, that “fiber-based competitive supply within at least half a mile generally has a material effect on prices of BDS.” And the data show that nearly all buildings with ILEC BDS connections are well within a half mile of competitive fiber. In fact, three quarters of them are within just 456 feet of competitive fiber and about half of all ILEC BDS buildings are merely 88 feet from competitive fiber.
The FCC cannot ignore the weight of the evidence and impose an unjustified and burdensome BDS regulatory regime, even a so-called “compromise” solution proposed by other BDS stakeholders, where the facts (and data) do not lead to the conclusion it expected to find. Instead, it must make a clear-eyed evaluation of the BDS marketplace with all the facts in hand. Doing so leads to only one possible conclusion – the BDS market overall, and particularly for Ethernet services, is working and working well.