Business broadband has been growing explosively in recent months and years. However, according to an April 6 article in The Washington Post, at least to this point, the majority of business broadband is controlled by legacy telecom companies that, according to a recent communique from the Federal Communications Commission (FCC), have attempted to stifle competition by locking their business customers into restrictive contracts.

Now, according to the article, the FCC is considering the idea of creating new rules for this $40 billion per year industry, with the goal of increasing competition for business data services, such that retailers, banks, universities, and other institutions will have more choices and flexibility in selecting carriers.

"We need a fresh start," said Tom Wheeler, chairman of the FCC. "The marketplace is changing."

New connection technologies, such as fiber optics, are opening up wider "lanes" for data traffic. According to the FCC, the more data Americans consume, the more important it is to ensure there is not only enough capacity available, but that the capacity is available at affordable rates.

With this in mind, the FCC is considering the idea of asking that an expansion of the regulatory environment be approved by the end of the year that would allow the agency to decide whether it wanted to impose pricing regulations on certain markets for business broadband.

These "certain markets" would be based on the FCC's calculations that would indicate that competition is lacking in these markets. The agency's analysis could include factors such as the quality of the service available to businesses in a given region, how many competing service providers are in that region, and whether there is enough variation in services to support a range of different business types.

The FCC's proposal may also seek to ban two other strategies that broadband providers have been utilizing:

• One is known as a "tie-in," in which broadband providers agree to offer service to a business customer in one region, provided that the business customer agrees to purchase that same provider's service in one or more other regions of the country.
• The other is a practice in which providers lock business customers into long-term service contracts, with stiff fees for early termination. This practice, according to the FCC, while it can be problematic for the business customers themselves, makes it more difficult for competing broadband providers to set up service in markets that would be new to them, where these practices are in place.

Some industry officials are pushing back against the proposal, claiming that there is already sufficient competition in the market for business broadband and that technology upgrades driven by the cable and fiber companies themselves are already providing customers with faster and better service.

In specific, the cable industry, according to The Washington Post article, is expected to fight the FCC's proposal aggressively. One reason is that this type of connectivity currently does not fall under the FCC's rules for business data services, meaning that the cable industry has, to date, largely avoided much regulation in this part of the market.