AT&T and ILEC allies said the business data service market is flourishing, and heavy-handed regulation would undermine investment and facilities-based competition. But rivals of incumbent telcos continued to press their case for regulating a business broadband market they say is dominated by ILECs, and Incompas and Verizon offered new details for establishing Ethernet "benchmarks" and a competitive market test as part of their joint proposal to establish a new regulatory BDS framework. Some parties issued news releases and statements to frame the BDS debate as reply comments were due Tuesday in the FCC's rulemaking in docket 16-143 initiated by a Further NPRM (see 1604280057).

Parties not only disagree about how the FCC should weight performance tiers for its planned Connect America Fund Phase II reverse auction of broadband-oriented subsidies, but also about what the record demonstrated. Replies were posted Friday and Monday in docket 10-90, after initial comments last month (see 1607220057).

The FCC could act in late September to revise its special access framework for business data services, said Incompas CEO Chip Pickering Monday. On a Competify call highlighting BDS arguments ahead of reply comments due Tuesday, Pickering and others argued for more FCC regulation of the BDS market, which they said is still dominated by incumbent telcos overcharging competitors and business customers. Meanwhile, CenturyLink and Frontier Communications urged the FCC not to impose regulation they said would harm BDS competition and investment. NCTA said it would file a reply showing there's no market failure "justifying massive regulatory intervention."

CTIA, Incompas, NCTA and USTelecom backed a March 2015 petition for reconsideration asking the FCC to vacate a policy statement on the forfeiture methodology for violations of rules governing payment to certain payment programs. "Because the Policy Statement is written in terms that bind the agency in applicable monetary forfeiture proceedings, the Administrative Procedure Act required notice and comment prior to issuance of the Policy Statement," said a filing Friday by a CTIA counsel on a meeting with Enforcement Bureau staffers. It noted there was no docket because the commission didn't put the petition out for comment. The groups had said in 2015 the policy statement created “draconian” treble damages for amounts owed to USF and other funds (see 1503310052).

CenturyLink and Frontier Communications voiced concern to FCC leadership that the agency's proposed framework for business data services wouldn't reflect how carriers negotiate in the BDS market, including for wireless backhaul. "Market conditions have shifted considerably since the FCC’s 2013 data set, which was not accurate and which is now three years old," said a joint filing posted Wednesday on company officials' meetings with FCC Chairman Tom Wheeler, Commissioners Michael O'Rielly and Ajit Pai, and various staffers. "We also explained that price regulation will distort and deter competition in the BDS market; prices set too low will preclude competitors from entering the market." They said wireline networks are critical to helping wireless providers meet "exponential" wireless data growth. "In 2015, for the first time, more wireless data traffic was offloaded onto a wired network than data carried over wireless infrastructure and that trend is increasing," the filing said. "The current BDS rulemaking would reduce, not increase, incentives to invest in much-needed wireline fiber-optic infrastructure that provides the foundation for offloading wireless data. We reiterated that it is important that any regime the FCC adopts does not deter investment, especially in rural areas." Also making recent filings in docket 16-143 were Comcast, FairPoint Communications, Incompas, Level 3, USTelecom, Windstream and Washington Gov. Jay Inslee (D).

A federal court is unlikely to rehear a panel ruling that sided with the FCC on its net neutrality and broadband reclassification order, even critics of the order said Tuesday at a discussion held by TechFreedom, New America's Open Technology Institute (OTI) and the George Washington Institute of Public Policy. Some critics said they thought the chances the Supreme Court would review the case were better, though none of them called it likely, and a supporter of the commission order put the odds at just above 5 percent. Various petitioners have asked the U.S. Court of Appeals for the D.C. Circuit to rehear the 2-1 decision by a panel upholding its order establishing net neutrality rules and reclassifying broadband internet access as a telecom service subject to common carrier regulation under Title II of the Communications Act (see 1607290052).

TracFone and others urged the FCC to undo its planned phaseout of Lifeline support for stand-alone voice service, as parties commented on petitions for reconsideration of the agency order extending the low-income subsidies to broadband and revising program administration (see 1603310056). Consumer advocates and some Lifeline providers opposed various recon requests by telco and cable trade groups (see 1606240077). NCTA and USTelecom opposed a Pennsylvania Public Utility Commission petition to clarify the state role on FCC-designated Lifeline broadband providers (see 1607200057), while Sprint supported clarification. Comments were due Friday, and some were posted Monday in docket 11-42.

Industry parties asked a federal court to review a ruling siding with the FCC on its 2015 net neutrality and broadband reclassification order. Petitions for rehearing were filed Friday by Alamo Broadband, AT&T, CTIA, NCTA and the American Cable Association, USTelecom and CenturyLink, and Tech Freedom and other intervenors at the U.S. Court of Appeals for the D.C. Circuit (USTelecom v. FCC, No. 15-1063 and consolidated cases). The petitions had been expected and are seen by observers on both sides of the debate as unlikely to win rehearing, though some FCC critics are more hopeful of Supreme Court review (see 1607280049).

FCC critics face an uphill battle to convince a federal court to rehear and overturn a ruling upholding the FCC's net neutrality and broadband reclassification order, some knowledgeable sources told us Thursday. Various parties who originally challenged the order are expected to file petitions Friday for rehearing the 2-1 decision at the U.S. Court of Appeals for the D.C. Circuit (USTelecom v. FCC, No. 15-1063), they said. Even commission critics say the odds are against the D.C. Circuit granting rehearing, but some suggested the appellate court proceeding might improve the prospects for Supreme Court review, including on the question of Chevron deference to the agency.

Tech Freedom plans to ask a court to reverse the FCC's net neutrality victory, the group's President Berin Szoka told us Wednesday. Szoka said he expects at least one other intervenor to join in filing a petition for reconsideration to the U.S. Court of Appeals for the D.C. Circuit (USTelecom v. FCC, No. 15-1063). Recon petitions are due Friday on a D.C. Circuit panel's 2-1 ruling that upheld the commission's 2015 order imposing net neutrality regulation and reclassifying broadband internet access as a telecom service under Title II of the Communications Act (see 1606140023). Szoka said he would be surprised if petitioners who originally challenged the FCC order didn't file separate petitions for reconsideration. Petitioner representatives didn't comment Wednesday. Supporters of the FCC order believe chances are slim the D.C. Circuit will rehear, much less overturn, the panel ruling (see 1606150038). Szoka acknowledged the prospects are low but said there are valid reasons to rehear and even rebrief the case, given arguments the panel went too far in giving deference to the agency's decision under the Chevron doctrine, which he said were strengthened by a subsequent Supreme Court ruling (Encino Motorcars, LLC v. Navarro et al., No. 15-415) (see 1606200054). And even if the D.C. Circuit denies rehearing, he said, expected appeals to the Supreme Court could be helped if petitioners can convince more D.C. Circuit judges to issue dissents. "We're more gung ho than anybody," he said.