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To: Jenne who wrote (50188)	11/15/1999 5:48:00 PM
From: D.J.Smyth	Read Replies (2) \| Respond to of 152472

FCC DSL decision on Thursday could also affect wireless: (wireless becomes more competitive with wired cost wise if line sharing becomes the rule) news.excite.com Gulp. DSL awaits FCC ruling Updated 5:00 AM ET November 15, 1999 By Doug Brown, Inter@ctive Week Digital Subscriber Line service providers are eagerly awaiting a decision from the Federal Communications Commission this week that could radically change the economics of providing high-speed access to consumers. Currently, Digital Subscriber Line carriers must rent a local loop from the regional Bell operating company to bring service to home and business customers. Many in the industry expect the FCC will rule Thursday that such rentals are no longer necessary and that the DSL providers and RBOCs can share a single line into the customer premises. If the Nov. 18 ruling goes their way, DSL providers will see about $20 dropped from their cost of delivering access. "There will be almost immediate impact for consumers," said Jim Monroe, a spokesman for NorthPoint Communications in San Francisco. DSL executives are optimistic because the FCC ruled last March that line sharing is technically feasible. Even incumbent telephone company officials fear the decision will likely go against them. "There should be no sharing the loop such that [competitors] could strip off the lucrative DSL piece" and leave the voice portion of the spectrum for the incumbent carriers, said Lawrence Sargeant, vice president of regulatory affairs at the U.S. Telecom Association. "It seems entirely unfair." In Sargeant's view, such a ruling would run contrary to the FCC's hands-off approach toward opening access to high-speed cable services. "There is a question of competitive equity," he said. If the FCC approves line sharing, Internet service providers supplying home access would suddenly become more competitive against the RBOCs, which thus far have been able to offer lower-priced DSL services. "We are very enthusiastic about competing with the incumbent carriers," said Dhruv Khanna, executive vice president and general counsel at Covad Communications. "We don't want to be [just] a niche business-oriented provider. That is not a good strategy long-term." Profit margins in the consumer DSL arena are currently razor-thin, from zero to about $20, depending on the wholesale supplier. The cheapest wholesale DSL price runs about $39 per user per month. U S West is offering DSL at $37.90 per month, because it doesn't have to charge itself full price for the local loop. There will ultimately be some sort of fee set for line sharing, but that is likely to be finalized by state public utility commissions, according to Frank Paganelli, assistant general counsel at Rhythms NetConnections. "What we argued [to the FCC] as being the most reasonable is to charge us for data what the ILECs [incumbent local exchange carriers] are currently charging themselves, which is zero," Paganelli said.