The market for Business Data Services (BDS), or high-volume broadband lines used by companies and organizations, is far more competitive than supporters of the FCC’s efforts to impose new rate regulations continue to insist (link is external). USTelecom recently surveyed nearly 800 small and medium sized businesses and found that roughly 75 percent of them had changed providers within the last five years.
Why the discrepancy? The BDS market has changed dramatically over the past few years. Rate-regulation proponents don’t like to admit it, but many companies now have far more choices in broadband providers because of cable operators, who have upgraded their networks to offer similar speeds and volume.
The survey asked about two types of services: “Business Internet Access,” a product that’s often bundled with video and voice service that comes with some speed, quality and customer support assurances; and “Data Networking Service,” which is a dedicated data pipe, like a T1 line or Ethernet service, and is often used for technologies that require high reliability, like video conferencing.
Thanks to new competition from the cable industry, survey respondents reported frequent switching between “Business Internet Access” and “Data Networking Services,” and between telecom providers and cable companies. That contradicts a key point (link is external) in the FCC’s proposed rulemaking which suggests that these two services represent clearly separate markets and serve different customers.