Federal Appeals Court Upholds FCC Business Data Services Remake

A federal appeals court has upheld the majority of the Federal Communications Commission's 2017 Business Data Services (BDS) revamp. The NCTA--The Internet & Television Association had backed the BDS remake under FCC Chairman Ajit Pai, who had not supported the previous approach adopted under Chairman Tom Wheeler. In a party-line vote, the FCC Republican Majority on April 20, 2017, adopted a BDS Report and Order, under new chairman Pai, declaring the BDS market generally competitive—a distinct departure from Wheeler's more regulatory proposal, which had concluded the market was insufficiently competitive. The Pai BDS approach deregulated the rates incumbent providers can charge for services like wireless backhaul, credit card readers, ATMs and institutional hookups to schools and libraries. The FCC had argued that its new policy of releasing drafts of item three weeks before a vote allowed sufficient time for comment, but the court said that was not the case and remanded that portion of the decision back to the FCC. "The court did identify a narrow procedural issue that the Commission needs to address," said Pai, "and I look forward to working with my colleagues to do just that as soon as possible." But the court left intact the FCC deregulatory changes, which was a victory for ISPs who had sought more flexibility to deliver business broadband. 

“Today’s court decision is a win for consumers and another important step toward modernizing the delivery of broadband services and incentivizing new investment in the most efficient and effective way," said Jonathan Spalter, president of USTelecom. "While the transport issue was vacated on procedural grounds, we are confident that upon remand, the FCC will find that transport services are fully competitive and not subject to pricing regulation."