On March 7, 2018, the FCC published a public notice in the Federal Register that brings its April 2017 Business Data Services (BDS) Order one step closer to full implementation. Those new “special access” rules would require CLECs and Price Cap carriers to de-tariff most BDS services in competitive areas within 36 months. OMB has approved several of the new requirements, setting a deadline of August 1, 2020, for those carriers to de-tariff all packet-based BDS services, TDM transport, and TDM BDS service end user channel terminations and other lower bandwidth TDM BDS service in competitive counties. The Order is still open to OMB approval before all of the new provisions are in full effect. Note, at this time, this Order only applies to Price Cap carriers and CLECs; RLECs are still required to maintain their special access tariffs.
This rule will affect both RLECs and their CLEC operations. RLECs purchase many BDS services from Price Cap carriers to run their businesses. Over the next 36 months, these circuits will need to be moved to a contract. JSI expects the terms and conditions of the contracts to be different from the tariff and may require negotiations to ensure services currently provided are retained at the same prices. In addition, as services are removed from the ILEC tariffs, it will be more difficult to find benchmark rates when pricing ILEC BDS services.
The CLEC impact is greater. CLECs operating in competitive areas are required to de-tariff their service prior to August 1, 2020. CLECs will have to ensure that all BDS customers have contracts that state the rates, terms and conditions for each BDS service they sell or that are still in service. CLECs may be able to take advantage of this opportunity to gain additional BDS services in the Price Cap areas. It is important to make this transition if your CLEC does rely on its filed tariff, since some carriers will not pay unless there is a tariff or a contract in place.
CLECs should keep in mind that, although de-tariffed, BDS services are still telecommunications services and must be provided under non-discriminatory terms and conditions. The FCC will collect data every three years to validate that carriers are being non-discriminatory. It is likely that all contracts with customers will need to be disclosed to the FCC during the data collections.
These rules only affect the competitive counties. The percentage of competitive counties in a state range from 10% in Arkansas to 100% in New York, with average states 58% competitive. JSI has the list of competitive counties and can provide your state’s list upon request.
If you would like more information on this BDS Order or need assistance with BDS contracts, please contact Valerie Wimer in JSI’s Maryland office at 301-459-7590. Valerie also will be discussing BDS de-tariffing in more detail at the JSI Management Seminars in May.