In the August 13, 2025, edition of the ICORE Blog we reported that the FCC had adopted a Notice of Proposed Rulemaking (NPRM) addressing the provision of Business Data Services (BDS) offered by telephone companies. The NPRM proposes changes believed to promote competition and economic growth through the elimination of outdated and burdensome regulations applicable to legacy circuit-based BDS provided by Incumbent Local Exchange Carriers. Specifically, the NPRM proposes to eliminate rate regulation and tariffing obligations for end user channel termination services provided by price cap and Rate-of-Return carriers. In addition, the NPRM proposes to eliminate rate regulation and tariffing obligations for transport services provided by Rate-of-Return carriers. Finally, after a 24-month transition period, mandatory detariffing of BDS would be required.
Comments in this proceeding were originally due on October 6, 2025, but due to the Government shutdown the filing of comments was delayed. On November 18,2025, numerous comments were filed by interested parties, including several parties advocating for the rural ILEC industry (WTA, NTCA, and The Concerned Rural LECS each filing separately). Our review of these comments indicates agreement on several key points as follows:
* There is general support for the Commission’s efforts to remove regulatory burdens and the elimination of outdated rules to promote investment and facilitate the transition of IP technology, however, the Commission is urged to not require detariffing/deregulation on a mandatory basis.
* Instead of requiring mandatory detariffing/deregulation, the Parties urge the Commission to pursue an optional/voluntary approach to the regulation of BDS offerings.
* The Parties point out that Rate-of Return ILECS’ markets for BDS vary significantly with respect to cost, competition, and demand and these market characteristics are critical in determining whether incentive regulation enables them to best serve their customers.
* The Parties also discuss the benefits of the current regulatory regime for BDS. Eliminating the costs associated with cost studies and tariff filings does not outweigh the benefits of the NECA tariff pooling process and the inherent risk sharing among the small providers that participate in the NECA pools. Continuing the current regulatory regime, rather than mandatory detariffing, will allow Rate-of-Return ILECS to assess the trade-off of the existing administrative costs and lower risk associated with the NECA pooling process versus the possible benefit of reduced administrative costs and greater flexibility to respond to competition with voluntary detariffing.
* The Parties agree that mandatory deregulation and detariffing, or incentive regulation, of BDS will have a material negative impact on many Rate-of-Return ILECS and the customers they serve. Therefore, the Commission should adopt an optional/voluntary approach.
We at ICORE concur with the comments discussed above and believe that the Commission should provide Rate-of Return ILECs with the ability to maintain their existing regulatory regime with the option to convert to incentive regulation on a voluntary basis at a time of their choosing. Reply comments in this proceeding are due on December 3, 2025. We will continue to follow this issue and will provide updates as more information becomes available.
