RealTime IT News

Covad, Qwest Enter New Line-Sharing Era

Covad has negotiated a three-year agreement with Qwest that will allow the broadband provider to deliver DSL service over the telecom's local phone lines.

It's the first time a competitive carrier such as Covad and a Baby Bell have negotiated commercial line sharing terms since the Federal Communications Commission (FCC) voted to phase out federally mandated line sharing by October.

Under the old rules, access prices were set by various state commissions and could vary wildly -- sometimes even within the same state.

"Now we have one price that's fixed and negotiated by both parties, so it's mutually beneficial," Jason Oxman, Covad assistant general counsel, told internetnews.com.

Currently Covad offers DSL to small and medium businesses and consumers in half of Qwest's 14-state coverage area: Arizona, Colorado, Minnesota, New Mexico, Oregon, Utah and Washington.

With the new agreement in place, the company knows what the access fees will be if it wants to expand in Qwest territory, Oxman said.

Financial terms the contract were not disclosed, however the San Jose, Calif.-based Covad said the pricing is "consistent with our business plan."

Kathleen Greene, a Covad spokeswoman said the company is also pursuing agreements with other Baby Bells; she declined comment on the progress.

A Qwest spokeswoman was not immediately available for comment, but in a statement, the Denver-based company said it hopes to replicate the Covad deal with other providers.

The agreement won praise from the FCC, which had some concerns that making line-sharing voluntary, regional telecoms could freeze competitive broadband providers out of the market for new subscribers (The FCC grandfathers line sharing for existing customers).

FCC Chairman Michael Powell said Qwest customers will have more choices for broadband services as a result of the Covad agreement.

"We hope this agreement will stimulate additional line sharing and unbundling arrangements, negotiated in the market," Powell said in a statement. "I urge all carriers to take the necessary steps to ensure that consumers in all other regions of the country can enjoy the same benefits."