U S WEST, CLEC Consortium Sign Line-Sharing Deal

A consortium of 13 leading competitive local exchange carriers and U S WEST Tuesday agreed to share phone
lines for simultaneous voice and data traffic on a region-wide basis.

The deal marks a broadband pro-competitive milestone as it is the first
multi-company region-wide agreement of its kind in the U.S.

The agreement is designed to accelerate the deployment and broaden the
availability of high-speed digital subscriber line services to millions
more consumers in U S WEST’s (USW)
14-state territory.

The companies participating in the agreement with US WEST include Arrival Communications, @Link Networks, Inc.,
BridgeBand Communications, Inc.,
Contact Communications, Covad Communications Co., CDS Networks, Inc., Jato Communications Corp., Montana
Wireless, Inc., MULTIBAND
Communications, Inc.
, New
Edge Networks
, NorthPoint
Communications, Inc.
, Rhythms, Inc.
(RTHM)
, and Western Telephone Integrated Communications, Inc.

John Kelley, U S WEST president of wholesale markets, said the agreement
underscores its willingness to go the extra mile in opening up our network
to competitors.

“The deal comes at a time when demand for high-speed Internet access has
never been greater,” Kelley said. “This ground-breaking agreement not only
demonstrates our commitment and ability to work effectively with a broad
range of customers and competitors, it will also help more companies offer
services to more consumers and businesses throughout our region.”

The agreement outlines the terms and conditions for competitors’ use of the
high-frequency portion of the local phone line, allowing voice and data to
be transmitted simultaneously over the same line. The predetermined
deployment schedule is designed to facilitate line-sharing in approximately
350 U S WEST central offices by the end of July.

Under the agreement, consortium members can choose one of two payment
options for interim monthly line-sharing rates. Members may select an
interim rate of $5.40 per month per shared line, or a rate of $0 per month
per shared line until as early as January 1, 2001, at which time the
interim monthly rate will change to $8.25.

Under either payment scheduled, consortium members subscriber to the
interim price plans are subject to “true up” payment. Once permanent prices
are established in each state, the permanent price will be applied
retroactively back to April 24, 2000 for the true up.

Currently, Minnesota is the only state in U S WEST’s service area that has
established an interim line-sharing rate of $6.05 a month. Tuesday’s
agreement establishes interim rates in U S WEST’s other 13 states, pending
agreements between U S WEST and CLECs on permanent prices or further action
by regulatory commissions in each state.

U S WEST and the consortium members have agreed to continue negotiating to
reach permanent prices for line-sharing. If a permanent price can’t be
negotiated, the companies have agreed to ask each state commission to
establish permanent rates.

Line-sharing involves separating the frequencies of transmissions over the
copper wires, local loop that connects to customers’ homes and businesses.
Line-sharing enables voice and data traffic to be transmitted
simultaneously over the same wire.

In Novembe

r 1999, the Federal Communications
Commission
ruled that local exchange carriers, like U S WEST, are
required to offer line-sharing to competitive carriers. The ruling helped
to level the playing field by giving consumers the choice of DSL providers
without the burden of a separate line, longer installation, and higher
prices and provided competitive broadband service providers with an
opportunity to get into the high-speed access market segment.

Clay Deanhardt, Covad (COVD)
senior counsel, said the joint efforts of the competitive carriers and US
WEST mark the first time an incumbent phone company entered into a written
agreement to share lines on a region wide basis.

“This agreement proves that the FCC’s line sharing mandate is clearly
executable by the incumbent local exchange carriers,” Deanhardt said. “Not
only will this agreement provide consumers with greater choice in DSL
service providers, but we also expect line sharing to result in more
competitive DSL pricing and faster installations.”

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