The government is easing regulations on what Verizon Communications Inc. can charge business customers for its high-speed broadband data services.
The Federal Communications Commission is allowing Verizon to exempt its broadband data services provided to large enterprise and wholesale customers, including wireless and long-distance phone companies, from rules regarding tariff filings and pricing requirements.
Verizon, in a 2004 petition to the commission, argued that there is fierce competition in the broadband market. It noted that other competitors — cable and long distance — all faced lower regulatory hurdles and that Verizon should no longer be saddled with the rules.
The FCC had until midnight Sunday to deny Verizon’s petition. Because the commission took no action by the deadline, what the company sought automatically went into effect Monday.
A trade group representing Verizon rivals said the commission’s inaction relieves Verizon of obligations to protect customer privacy, provide access for the disabled and contribute to a fund that helps subsidize household service for rural and low-income people.
“The scope of this almost whimsical action by the commission is unbelievable,” said Earl Comstock, president and chief executive of CompTel, who faulted FCC Chairman Kevin Martin for allowing the petition to take effect.
In a statement, Martin said the deregulation will promote broadband deployment across the country.
“This relief will enable Verizon to have the flexibility to further deploy its broadband services and fiber facilities without overly burdensome regulations,” he said.
Martin also noted that Verizon was not seeking in its petition to exempt itself from the Universal Service Fund helping rural and poor communities.
Democratic FCC Commissioner Michael Copps objected to the way the Verizon petition was handled at the agency, saying it erases decades of communications policy. “In effect, we provide industry the pen and give it the go-ahead to rewrite the law,” he said.
Analysts expect Verizon competitors to challenge the commission.
“Investors should take note that while this outcome may appear to hand Verizon a victory, there is a high probability of legal risk associated with the FCC’s decision to let the petition go into effect,” Jessica Zufolo, an analyst with Medley Global Advisors, said in a note Monday to clients.
