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FCC: Phone Companies Do Not Have to Open Up DSL Lines to Competitors

Posted on: Saturday, 6 August 2005, 00:00 CDT

Aug. 6--Phone companies will no longer be forced to open up their high-speed lines to competing Internet service providers at discounted prices, the Federal Communications Commission ruled Friday.

By declaring digital-subscriber-line service an information rather than a telecommunications service, the 4-0 ruling puts the Bells on greater parity with cable modem service, which won a similar designation in 2002 in an FCC ruling the U.S. Supreme Court upheld in June.

Deregulation advocates and consumer advocates differed sharply in predicting the effects of the looser rules.

"Consumers will reap the benefits of increased Internet-access competition and enjoy innovative high-speed services at lower prices," said FCC chairman Kevin Martin.

But consumer groups said the ruling will squeeze independent broadband providers such as EarthLink out of the market, force consumers to sign up for bundles of services and drive up prices.

"The Federal Communications Commission continues down the wrong path on deregulation, allowing giant phone companies to tighten their stranglehold on competition, stifle innovation and reach even deeper into the pockets of consumers," said Gene Kimmelman, public policy director at Consumers Union.

Phone companies say forcing them to share their broadband networks with independents has slowed investment.

"At last, regulations are catching up to where consumers and technology have been for some time," said Susanne Guyer, Verizon Communications senior vice president for federal regulatory affairs. "This decision will help accelerate deployment of broadband networks, enabling greater choice and increased access for consumers."

The ruling gives the Bells greater leverage in negotiations with independents. "We are confident that we will extend our existing commercial agreements with the Bells so that we can continue to deliver DSL services," EarthLink said in a statement.

Cable operators have more than 22 million modem customers, while phone companies have more than 15 million DSL customers, industry analysts say. The DSL providers, trying to narrow the gap, have slashed prices and pushed bundles.

At the same time, the competitors are invading each other's territory. Cable operators are rolling out digital phone service and phone companies are preparing to launch cable TV service and are asking legislators for new rules that don't require them to negotiate individual cable franchise licenses with thousands of municipalities.

The FCC said phone companies could not cut off independent Internet providers for a one-year transition period.

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VZ,

Source: Newsday, Melville, N.Y.

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