Response to the FCC’s Use of Price Cap Regulation of BDS Rates

By Dr. Mark Schankerman and Dr. Pierre Régibeau

On August 9, 2016, a report prepared by Dr. Mark Schankerman and Dr. Pierre Régibeau, “Response to the FCC Further Notice: Regulation of DS1 and DS3 Services,” was enclosed for filing to Federal Communications Commission Secretary Marlene H. Dortch.

From the Summary of Economist Report:

“Since 2005, Business Data Services rates have been frozen in areas subject to price cap regulation. Now, years after “regulation by default” was put in place, the Federal Communications Commission (FCC) is trying to determine the appropriate rate level on DS1 and DS3 services.

In response to FCC’s proposal Dr. Schankerman, along with Pierre Régibeau of Charles River Associates and Imperial College in London, state that the result of the FCC getting the rate structure wrong could reduce adoption of advanced services as well as restrict deployment of meaningful competition. They propose a structure that uses commonly accepted data sources and methodology for determining the productivity growth in the legacy, TDM-based services DS1 and DS3, and to set the appropriate regulation on rates for these services whose markets are rapidly declining.”

Read the full Summary of Economist Report…

Read the full report…

investinbbandResponse to the FCC’s Use of Price Cap Regulation of BDS Rates