FCC deregulates broadband services

Grant Gross, IDG News Service   Today’s Top Stories   or  Other Legislation/Regulation Stories  

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February 20, 2003 (IDG News Service) -- The U.S. Federal Communications Commission has voted to allow the regional Bells to stop sharing most of their broadband networks with competitors, but left the decision on sharing most pieces of local telephone service networks to state public service commissions.
The commission also voted today to allow the four regional Bells -- owners of most local telephone networks across the U.S. -- to stop providing their switching facilities at a discount to other local phone providers in the large business market. But the divided commission, in a split vote in which four of the five commissioners dissented with parts of the ruling, said states should decide whether the regional Bell operating companies should share switching facilities with competitors, collectively called competitive local exchange carriers, in the home and small-business markets.
In a change from current policy, the FCC voted that the regional Bells would no longer have to provide "line-sharing" for competitors offering Digital Subscriber Line (DSL) service. Commissioners voting for that change argued that significant competition exists in the DSL market. The regional Bells also won't be required to share newly installed "next-generation" broadband lines with competitors that want to provide broadband services.
The decision, which could take several weeks to go into effect, is a defeat for FCC Chairman Michael Powell, who wanted to further deregulate telephone competition. He argued that leaving the telephone rules to the states, which have nine months to come up with their own unbundled network element rules, would give the telecom industry a "Picasso-esque regulatory backdrop" to maneuver.
But fellow Republican Commissioner Kevin Martin argued that the compromise, which FCC staff worked on up until this morning's meeting, took a "principled, balanced approach."
"We deregulate broadband, making it easier for companies to invest in new equipment and deploy the high-speed services that consumer desire," Martin said.
Reaction to the ruling was swift. The Information Technology Association of America, a trade group, said that the ruling "killed consumers' chances to continue to enjoy the significant benefits of today's competitive broadband information services market."
Independent telecom analyst Jeffrey Kagan in Marietta, Ga., called the ruling "a mixed bag."
Each side gets something from the ruling, but when it comes to the big issue of the unbundled network element discount, AT&T Corp. and WorldCom Inc. benefit, while the Baby Bells lose out. "Before the ink dries on this vote, I think the Bells will be appealing it based on Powell's dissent and argument," Kagan said in comments sent by e-mail.
State regulators now will take on the "huge responsibility and burden" of deciding competitive telecommunications issues, he said. "That's where the real power is going tolie if this [ruling] is upheld."

Reprinted with permission from

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