KRED

Saturday, April 22, 2017

FCC to Scrap Stringent Business Data Service Regulations

http://ift.tt/eA8V8J

Yesterday, the U.S. telecom regulator – Federal Communications Commission (FCC) – voted 2-1 to withdraw most of the stringent regulatory requirements to reform the business data service (BDS) market. The BDS reform report was introduced by the previous FCC body that was led by Tom Wheeler under the Democratic rule. However, the new FCC, reconstructed by President Trump and headed by Ajit Pai, has ushered a less restrictive regime.

The BDS market, where telecom operators and cable MSOs (multi service operators) provide a host of network related services to business entities of various sizes, has been a lucrative source of revenues in the recent years for service providers. Significantly, these service providers have been generating handsome revenues by frequently charging steep prices from small and medium businesses. At present, BDS is a $45 billion market opportunity per annum.

In 2016, the FCC proposed rules to regulate pricing in the market, citing low competition. The proposals include: (1) removal of tariffs (2) not classifying telecom providers as either dominant or non-dominant carriers (3) implementing a new Competitive Market Test to determine where competition exists (4) imposing technology neutral regulations (5) instituting price caps on access to legacy TDM networks in non-competitive markets (6) setting wholesale prices in relation to retail prices for any given service in non-competitive markets.

Yesterday’s voting outcome will substantially ease the regulatory requirements in the business data services market. However, some price caps in areas with little competition will be retained. Welcoming the voting result, Pai said that stringent regulations would be detrimental to competition and future investment need for technological upgrade. 

Gainers from FCC’s New Decision

The BDS reform proposals adopted by the FCC under the previous regime have been criticized by industry players and several industry organizations. They argued that being that the BDS regulations will cause more harm than good, discouraging further network investments, costing jobs and reducing economic output. Incumbent service providers like AT&T Inc. T, Verizon Communications Inc. VZ, CenturyLink Inc. CTL and Comcast Corp. CMCSA together with several other telecom operators and cable MSOs, vehemently opposed this proposal. These companies are set to gain the most from today’s FCC decision.

On the other hand, the vote comes as a blow to Sprint Corp. S and other firms that backed a 2016 FCC plan under Wheeler’s chairmanship that would have cut business data prices. All the stocks mentioned above currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Will You Make a Fortune on the Shift to Electric Cars?

Here’s another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It’s not the one you think.

See This Ticker Free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
AT&T Inc. (T): Free Stock Analysis Report
 
Sprint Corporation (S): Free Stock Analysis Report
 
Verizon Communications Inc. (VZ): Free Stock Analysis Report
 
Comcast Corporation (CMCSA): Free Stock Analysis Report
 
CenturyLink, Inc. (CTL): Free Stock Analysis Report
 
To read this article on Zacks.com click here.

April 22, 2017 at 03:10AM

http://ift.tt/2od8p8k

from Zacks Equity Research

http://ift.tt/2od8p8k