FCC Broadband Decision Favorable for ISPs

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.

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 they have 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.

The Information Technology Association of
, 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
o 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

Jeffrey Blumenfeld, Rhythms NetConnections (RTHM)
general counsel, said the FCC took appropriate action to foster competition 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.”

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