"The primary purpose of these brief reply comments is to call attention to critical ways in which the Commission's conduct of this proceeding and the proffered basis for its proposed rate regulations are contrary to widely accepted rule of law principles as well as to sound policymaking. In particular, the Commission has withheld and untimely released data and analysis proffered in support of its proposed rules. Also, the Commission bases its proposed rules on an arbitrary assessment of the BDS services market that treats cable entrants and ILEC potential competition unequally. These deviations from rule of law principles are troubling in and of themselves. They also call into serious question the legality of the Commission's proposed rulemaking under the Administrative Procedure Act (APA). It is past time for the Commission finally to close this proceeding."

 

"A process that adheres to rule of law norms takes on heightened importance where the proceeding and proposed rules have been characterized by special interest pleading and rent-seeking masked in public interest platitudes. Despite the undeniably increasingly competitive landscape for BDS, and the potential for further competition absent regulatory disincentives to invest, a narrow segment of providers has continuously called on the FCC to impose new BDS rate regulations. Special rent-seeking privileges are sought primarily by a segment of BDS competitors who serve sophisticated business enterprises, not by less sophisticated everyday residential or retail consumers. New rate controls would give these special interest pleaders price cuts on wholesale access to their competitors' facilities, including advanced IP-based broadband networks. It's easy to understand why those who advocate rate-regulated access to their competitors' facilities want this, but it's difficult to understand why the Commission would indulge them."

 

"By imposing rate controls, the Commission necessarily will curb financial returns on investment for business data facilities. This necessarily will discourage infrastructure deployment by both incumbents and by new facilities-based entrants like the cable operators. Rate regulation also discourages facilities-deployment and market entry by competitors who, given a choice, prefer regulatory arbitrage to facilities-based competition."

 

"At a time when business investment is hovering near all-time lows, FCC actions that discourage further investment are far from harmless to the nation's economy. After the release of the most recent government data on the nation's GDP and business investment, Gregory Daco, an economist at Oxford Economics, declared, 'weakness in business investment is an important and lingering growth constraint.'"

 

"Dr. Marc Rysman's analysis of BDS market competition recognizes the potential competition offered by ILECs in geographic areas with copper-based facilities in place - facilities that could potentially be upgraded by fiber deployment. Meanwhile, Dr. Rysman's analysis rejects the potential competition offered by cable entrants in areas with hybrid fiber-coaxial facilities that could also be upgraded. Specifically, data submitted by cable entrants indicates they have the potential to provide BDS services via fiber deployments to Metro Ethernet capable headends in 22 times as many census blocks as previously recognized. The arbitrariness and capriciousness lies in Dr. Rysman's acceptance of one platform for potential competition and simultaneous rejection of a similar platform for potential competition. The unequal analytical treatment of cable and ILECs is at odds with the rule of law principle that the law treats all alike equally - or at least treats all equally absent an important justification requiring a departure from that principle. There is no justification for this unequal treatment of competing services."