FCC's business broadband proposal could discourage fiber network investments

A former Federal Communications Commission (FCC) senior economist has released a report highlighting the significant harm that an FCC proposal could do to future broadband investment, particularly in rural communities, with new price cap regulations, the company said.

The report details that the FCC has proposed potentially drastic rate cuts on incumbent local exchange carriers (ILECs) that provide business broadband services.

The price cap regulation on providers would eliminate an estimated USD1.4 billion in revenue from the ILECs that service rural communities, which would discourage future investment by both ILECs and new providers looking to enter the market. Without enough revenue to continue supporting rural network infrastructures across the country, ILECs lose the ability to fully support and continue investing in the services that smaller communities across America need to remain competitive.

The report was sponsored by the Invest in Broadband for America coalition.

The Invest in Broadband for America coalition is made up of CenturyLink, Inc. (NYSE: CTL), Cincinnati Bell, Inc. (NYSE: CBB), Consolidated Communications, Inc. (NASDAQ: CNSL), FairPoint Communications, Inc. (NASDAQ: FRP) and Frontier Communications (NASDAQ: FTR).