Posted on: October 1st, 2015

Small business demand for services is driving the evolution of our communications networks, and Advocacy recently filed a letter with the Federal Communications Commission (FCC), urging the body to ensure that small businesses have choices that fit their needs, at prices they can afford. In 2010, Advocacy released a study which concluded that broadband is as vital to running a small business as basic utilities like electricity. Moreover, the study concluded that small business owners are largely dissatisfied with the affordability and choices offered to them in the broadband market.

The majority of small businesses buy broadband and voice services from both incumbent local exchange carriers (ILECs) and competitive local exchange carriers (CLECs). ILECs own and maintain our country’s legacy phone network, but are required to lease network facilities to CLECs so that they can provide competing choices in broadband and voice services. ILECs obligations to the public and competitive carriers are governed by a number of regulations to ensure consumer welfare. Network technology is evolving, allowing both ILECs and CLECs to offer a greater variety of services over the same network by upgrading electronics; in some cases ILECs are also retiring copper landlines and replacing them with fiber-optics. The FCC has established a task force that is overseeing policy issues related to these technology transitions and seeking public comment and engagement on various issues.

The FCC has the important responsibility of not only preventing consumer harm as network technology evolves, but also preserving the kind of competition for services that has spurred innovation in the way communications are delivered. FCC Chairman Tom Wheeler has vowed that small businesses will not lose the benefits of competition as technology changes. Advocacy has long supported efforts by the FCC to maintain and promote competition for the benefit of small business consumers.

According to information provided by one CLEC, one third of small businesses purchase broadband and/or voice services from competitive carriers. In its most recent letter to the FCC, Advocacy expressed concerns that large incumbent carriers like AT&T and Verizon are planning to retire copper landlines and update network technology without adequate regulatory safeguards in place. Advocacy believes such safeguards are necessary to ensure that prices for small businesses do not increase, and that the number of providers a small business is able to choose from do not decrease. Advocacy strongly supported the FCC’s proposals to ensure that incumbents seek FCC permission to retire last mile facilities, and offer replacement products to CLECs at equivalent rates, terms, and conditions.

A number of small businesses, public interest groups and competitive carriers have submitted similar comments to the FCC (here). Advocacy is interested in hearing from small businesses regarding their experiences purchasing broadband and will continue to forward their concerns to the FCC. Anyone interested in filing comments with the FCC can do so using the FCC’s electronic filing system. For more information, please contact Assistant Chief Counsel Jamie Saloom at 202/205-6890.