March 30, 2017 / 2:04 AM / 3 years ago

U.S. communications agency to unveil reform to business data services market

WASHINGTON (Reuters) - The Republican chairman of the U.S. Federal Communications Commission is expected to unveil proposed reforms on Thursday to the $45 billion business data services market just four months after his Democratic predecessor abandoned a reform plan.

Ajit Pai, Chairman of U.S Federal Communications Commission, delivers his keynote speech at Mobile World Congress in Barcelona, Spain, February 28, 2017. REUTERS/Eric Gaillard

FCC Chairman Ajit Pai is set to announce reforms but will not propose completely deregulating the market, two officials briefed on the plan said. The proposal is set to be discussed at the FCC’s April meeting.

An FCC spokesman declined to comment.

Small businesses, schools, libraries and others rely on business data services, or special-access lines, to transmit large amounts of data quickly, for instance connecting banks to ATM machines or gasoline pump credit card readers.

Special-access lines are used by offices, retailers, banks, manufacturers, schools and hospitals to move large amounts of data, and wireless carriers rely on them for the backhaul of mobile traffic.

Major telecommunications and cable companies have met with FCC staff in recent weeks to talk about the issue, according to FCC records.

Under President Barack Obama, then-FCC chairman Tom Wheeler in April 2016 proposed a sweeping reform plan for business data services that aimed to reduce prices paid for services. Wheeler abandoned the proposal in November after Donald Trump was elected president.

The data services market is an important business for AT&T Inc, CenturyLink Inc (CTL.N), Frontier Communications Corp and Verizon Communications Inc (VZ.N), while Sprint Corp and other companies that use the lines say they are being overcharged.

Wheeler had proposed maintaining and lowering lower price caps using legacy data systems with a one-time 11 percent reduction in prices phased in over three years.

The proposal came under criticism from AT&T and the Communications Workers of America union.

Sprint, which backed Wheeler’s proposal, told the FCC in a March 22 letter that “thousands of large and small businesses across the country are paying far too much for broadband because of inadequate competition.”

Sprint argued “a small handful of companies are overcharging the very investors and employers that are critical to our economic growth and are using anticompetitive tactics to ensure that these businesses never have access to competitive alternatives.”

AT&T argued Wheeler’s plan was “little more than a wealth transfer to companies that have chosen not to invest in last mile fiber infrastructure.”

In a March 13 letter, AT&T suggested the FCC largely deregulate the market but leave rules in place where there is no competition.

CenturyLink and Frontier in a March 20 filing urged the FCC to completely deregulate the market.

Reporting by David Shepardson; Editing by Bill Trott

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