FCC Broadband Decision Bolsters ISPs' DSL Position

Ruling mandates 'line sharing,' knocking out RBOCs' price advantage and leveling the playing field for DSL deployment.

by Patricia Fusco
of internetnews.com
[November 18, 1999]

Internet service providers have greater opportunities to provide Digital Subscriber Line access courtesy of a new Federal Communication Commission order.

The Advanced Services Third Report and Order adopted Thursday permits competitive carriers to obtain access to the high-frequency portion of the local loop from the incumbent carriers, like the regional Bells and GTE Corp. (GTE)

This will enable competitive carriers to provide Digital Subscriber Line services over the same telephone lines simultaneously used by incumbents to provide basic telephone service, a technique referred to as "line sharing."

The decision by the FCC would make less expensive for ISPs and consumers to procure the broadband services and compete with telephone companies in providing high-speed communication services.

No more second-line advantage
The ruling forces local telephone companies to abandon selling second lines to consumers in order to set up high-speed Internet access.

Currently, second-line fees put ISPs in a significant price disadvantage and limited their ability to lure residential consumers.

The FCC believes it has leveled the playing field for Digital Subscriber Line service providers, but the regional Bells say they have serious concerns about the impact on consumer services of carrying data and voice traffic, even though that is how the companies provide their own brand of broadband services.

Industry analysts expect the FCC to implement this requirement within six months. Pricing arrangements have yet to be determined by the federal regulators, but guidelines for service fees are expected to be released in the near future.

Broad industry support
The Information Technology Association of America, an affiliation of 25,000 services comprising much of the IT industry, commended the decision.

"Competitive carriers should have the right to provide DSL in precisely the same manner as the incumbent," said ITTA President Harris Miller said.

"That means that competitive carriers should also be able to provide their DSL service over an existing incumbent voice telephone line instead of running an unnecessary and costly second line."

Dhruv Khanna, Covad Communications (COVD) co-founder, said the FCC order puts the DSL provider in a great position to further deploy broadband services.

"Today's decision marks the true dawn of the Telecommunications Act of 1996, as mandatory line sharing is a win/win for everybody involved." Khanna said. "It provides consumers with more choice, enables broadband providers like Covad to offer additional services more easily, and helps phone companies demonstrate that they have opened their markets to competition so that they can provide long distance services in their territories."

Jeffrey Blumenfeld, Rhythms NetConnections (RTHM) general counsel, said the FCC took appropriate action to foster ompetition in the broadband marketplace.

"The FCC has given customers more choices in the high-speed Internet access market," Blumenfeld said. "This order is exactly what competition is all about, customer choice and a level playing field."

—End