Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Lance B's : Its A Beautiful Thing -- Ignore unavailable to you. Want to Upgrade?

To: pressboxjr who wrote (1273)	11/19/1999 10:23:00 AM
From: Wayne Rumball	Respond to of 4792

FCC Approves Line Sharing for Data Carriers By Aaron Pressman WASHINGTON (Reuters) - More consumers should be able to get high-speed Internet connections and at lower prices after the Federal Communications Commission voted Thursday to require major local phone companies to share their lines with data carriers. The agency ordered that dominant carriers like SBC Communications Inc. (NYSE:SBC - news) and Bell Atlantic Corp. (NYSE:BEL - news) allow upstart competitors to offer high-speed data service on a line while the established carrier continued to offer basic voice service over the same line. Under current rules, customers of data carriers like NorthPoint Communications Group Inc. (NasdaqNM:NPNT - news), Covad Communications Group Inc. (NasdaqNM:COVD - news) and Rhythms Net Connections Inc. (NasdaqNM:RTHM - news) usually must order a second phone line to get high-speed Internet access. Both groups of carriers use a technology known as Digital Subscriber Line, or DSL, that offers high-speed data service over ordinary phone lines by transmitting in a range of frequencies above those used for vocal communications. Dominant carriers already use so-called line sharing when they offer high-speed Internet service themselves by installing a device that splits voice traffic from data. But they had not offered line sharing to competitors. Expanded line sharing could dramatically reduce the monthly fees data carriers have to pay for lines to customers, industry officials said. ''This decision should help to decrease our members' cost of providing DSL and other advanced services,'' said Russell Frisby, president of a trade group of upstart local carriers called the Competitive Telecommunications Association. ''This could reduce our price point by as much as $20 a month,'' said Rhythms assistant general counsel Frank Paganelli. ''It will make the whole process simpler, quicker and cheaper.'' Major carriers took issue with the ruling, saying it created an unneeded benefit to upstart data carriers. ''There is no need for corporate welfare that gives one sector of a very competitive industry an unnecessary advantage,'' said Bruce Posey, senior vice president at US West.(NYSE:USW - news) The FCC order also set pricing guidelines to be used by state regulators that have ultimate authority to set the prices that data carriers must pay for using a portion of a line for DSL. Carriers are supposed to negotiate such prices amongst themselves, but after 135 days may ask state regulators to arbitrate a resolution. States must rule within another 135 days. The FCC asked that in line sharing cases states should make an interim decision within 45 days. States should look to see how much major carriers charge their own data units for sharing a line, the FCC said. In many cases, major carriers allocate no costs for a line to their data services, FCC officials said. Analysts said the decision ultimately will reduce revenues for the dominant carriers. But the FCC ruling had been widely leaked ahead of time and much of the impact was already priced into the affected stocks. ''In the future, as this order is implemented, revenues from wholesale DSL services will be significantly less than they would have been without line-sharing,'' said Goldman Sachs analyst Frank Governali in a research note. NorthPoint shares, up more than 40 percent in the last two weeks, rose 7/8 to 35-7/8 on the Nasdaq. Also on the Nasdaq, shares of Covad, up more than 45 percent, fell 3/4 to 64-5/8 and shares of Rhythms, up more than 63 percent, rose 4-1/4 to 43-9/16. SBC shares finished down 3/4 at 50-7/8 on the New York Stock Exchange, where Bell Atlantic was down 3/4 to 64-7/16 and US West rose 1/2 to 65-5/8. GTE Corp. (NYSE:GTE - news) fell 13/16 to 75-3/8 and BellSouth Corp. (NYSE:BLS - news) fell 9/16 to 44-3/8.