| |
WSJ on the FCC line-sharing ruling...November 18, 1999
FCC Requires Local Phone Giants
To Share Lines With CLEC Rivals
By MARK WIGFIELD
Dow Jones Newswires
WASHINGTON -- The Federal Communications Commission
ordered local telephone companies to share their copper wires
with competitive data providers.
The FCC's so-called line-sharing order means customers
wanting high-speed data services from a company other than the
local phone monopoly won't have to pay for a second phone line.
The FCC believes its order will result in faster deployment of
high-speed Internet service to residential areas via digital
subscriber line, or DSL, technology.
The decision is regarded as a victory for competitive local
exchange providers, or CLECs, such as Covad Communications
Group Inc., NorthPoint Communications Group Inc. and Rhythms
NetConnections Inc. Currently, their customers must spend
around $20 a month for a second phone line, while the
monopolies selling their own DSL service can split customers'
existing lines to carry both voice and data simultaneously.
The FCC's action had been expected, but local telephone
companies had fought the change, complaining that it could
cause interference with voice service. They also asked for a
higher price for sharing the line with data companies.
The FCC's new policy takes effect in six months. But court
challenges are possible.
The FCC order on line sharing requires local telephone
companies to provide space on the line to their competitors on
the same terms they provide it to themselves. Until now, most
telephone firms have added no extra line costs to the prices of
their DSL services, said Larry Strickling, Chief of the FCC's
Common Carrier Bureau.
States will still make the ultimate decision on pricing using FCC
guidelines. But FCC Chairman William Kennard said the move
reflects the FCC's priorities of promoting competition and
encouraging broadband services.
"If the incumbent is able to split its loop and offer both data and
voice itself, it ought to be able to split the loop when the consumer
wants to buy services from one provider of voice and one
provider of data," Mr. Kennard said.
But in a statement, BellSouth Corp.'s vice president for regulatory
affairs, Robert Blau said the company hopes the FCC's pricing
guidelines "do not require local telephone companies to give
competitors access to local loops at prices that contribute little or
nothing to the overall cost of those facilities. At the end of the day,
what the competitors don't pay for, the basic local telephone
customer will."
Long-term, local phone firms will earn "significantly less" revenue
from wholesale DSL services, according to an analysis by
Goldman Sachs. And competitors "will have a better position
from which to compete."
That sentiment was echoed by Rhythms, Covad and NorthPoint,
which issued statements hailing the decision. Covad also
expressed optimism that the order will result in timely connections
for the CLECs.
The order requires local phone firms to complete negotiations
with competitors in six months, with an option for arbitration after
135 days. States can order an interim price after six months have
passed if arbitration isn't complete.
Analyst Anna Marie Kovacs of Janney Montgomery Scott said
she expects incumbents seeking regulatory approval from the
FCC to provide long distance to respond quickly to line-sharing
requests. Both Bell Atlantic Corp. and SBC Communications Inc.
are in that position.
In another matter, the FCC also voted to study new ways of
allocating spectrum to promote new technology and public safety
uses. Some 200 megahertz of spectrum now controlled by the
government would be reallocated under the process.
By comparison, cellular providers are given 25 megahertz of
spectrum per market. |
|
