Changes to Business Data Services Regulation Would Prohibit Certain Contracts

Federal Communications Commission Chairman Tom Wheeler said that he has asked the FCC to make “all or nothing” contracts illegal as part of broad changes to business data services regulation. “All or nothing” contracts, he said, require a business customer to “make all of its purchases on a single set of terms” and use “excessive penalties” to “punish customers when they fall short of their volume commitments.” Chairman Wheeler expects the full commission to vote on the proposal later in April. In his address, Chairman Wheeler also provided further detail about the proposed actions on special access, which he proposes to rename “business data services,” or “BDS.”

Chairman Wheeler’s comments came just two business days after Verizon and INCOMPAS sent a letter to the FCC proposing a framework for BDS that is quite similar to what Chairman Wheeler proposes. Traditionally INCOMPAS and large incumbent carriers such as Verizon have been on opposite sides on special access issues. But as the FCC moved closer toward taking action on special access, stakeholders may have felt that it would be a good idea to attempt to reach an industry-driven solution rather than to have a solution imposed on them. The similarity of the Verizon/INCOMPAS proposal to Chairman Wheeler’s suggests, however, that there was also some give-and-take between industry and regulators.