18 April 2018
| Alan Burkitt-Gray
The US regulator says it wants to help small rural carriers to become more efficient by changing the way in which they charge for services.
The Federal Communications Commission (FCC) has started a
consultation on allowing them to move from rate-of-return
regulation to price-cap, or incentive, regulation.
This "would encourage more efficient operation and allow
carriers to avoid expending resources on regulatory
compliance", said the FCC.
The proposed rule change would apply to business data services
(BDS) on lower speed time division multiplexing (TDM) services,
the regulator explained.
"These proposed rules would reduce regulatory burdens and
reward productivity, which can lead to further innovation,
entry, and competition in the market for BDS to the ultimate
benefit of consumers," said the FCC.
All five commissioners approved the changes, said the
The planned change applies to carriers working under the
Alternative Connect America Model (A-CAM), carriers. They are
rural carriers whose pricing was historically governed by
rate-of-return regulation: they reported costs annually to the
FCC, and were allowed a rate-of-return, set by the FCC, on
those costs. In 2016 over 200 carriers opted to move to A-CAM
for all services, while BDS remained under the old system. Now
the FCC wants BDS to move too.