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 : CellularVision (CVUS): 2-way LMDS wireless cable. -- Ignore unavailable to you. Want to Upgrade?

To: Elliot W who wrote (1422)	3/6/1998 4:59:00 PM
From: James Fink	Read Replies (1) \| Respond to of 2063

Thank goodness CVUS is much more than just a CLEC! The following article could be very bad news for CLECs. If the idea now floating around Congress and the FCC to split up the RBOC local loop into wholesale and retail divisions is enacted, competitors will be able to resell the RBOC local loop on nondiscriminatory terms with the RBOC retail division. The result?: no need for a bypass alternative. See below: Bells' Data Plans Could Open Up Local Telecom Market (03/06/98; 1:52 p.m. EST) As the Baby Bells start to publish proposals for creating high-speed data networks, Federal Communications Commission (FCC) officials and U.S. senators are suggesting ways to diminish the carriers' monopoly power and encourage competition in local telecommunications services. Two of the five regional Bell operating companies (RBOCs) -- Bell Atlantic and U S West -- recently submitted proposals explaining why they should be allowed to create their own high-speed data-network infrastructures, to exploit what they see as a fast-growing sector of the telecom market. To make the massive investment in network facilities worthwhile, the RBOCs said they will have to have the right to bypass federal rules on unbundling access to the telecom "local loop." The local loop is the connection between local telephone exchanges and the homes and offices they serve. In most areas, there is only one local loop -- the one owned and run by the RBOC. Control of the local loop gives the Bells considerable influence over customer spending on telecom services, and this monopoly power is proving difficult to break. One of the reasons MCI issued a profit warning last year was it was encountering unexpectedly high costs in creating a local-loop infrastructure in parallel to that of the RBOCs. The FCC said it wants RBOCs to give their competitors -- such as AT&T, Sprint, and MCI -- access to these monopoly local loops at cheap rates, a process known as "unbundling." The FCC is looking at how to encourage the growth of data networks, in response to the demands of section 706 of the 1996 Telecommunications Act, which mandates the agency to investigate the best way to encourage the building of commercial high-speed data networks. FCC officials are now speculating that the desire of the Baby Bells to build and sell services on these new data networks could be used as a lever to pry open the local telecom services market. Larry Strickling, chief of the Office of General Counsel's Competition Division at the FCC, suggested at a recent conference that RBOCs wanting to get into data might set up separate units to do so. These units could treat all other carriers equally, including their own parent companies, he said. "We can accept the idea that the incumbents need an incentive" to plow money into data network building, "but only if they organize a separate affiliate. They would have to deal with the incumbent on the same terms as competitors" when it came to local loop access and operational support systems such as billing, Strickling said. Strickling said the idea was his own, not FCC policy, but said it would encourage equality of treatment in local access deals, and would allow the Bells to regulate themselves in terms of guaranteeing fair local-loop access. "If we don't have something like this, we'll have to have the local access police in perpetuity," he said. Although Strickling's idea for Bells to create carrier-neutral operating units only applied to new data networks market, other influential voices are suggesting similar ways of getting the Bells to give carriers fair access to local loops without the need for heavy-handed regulatory intervention. For instance, a U.S. Senate antitrust committee heard a suggestion earlier this week that Baby Bells could split off their operations arms, which handle sales and marketing, from their network services units, which handle the everyday technical tasks. This spin-off could be the quid pro quo for the Bells being allowed into the long distance market. At a hearing of the Senate antitrust subcommittee on March 4, two U.S. senators -- Mike DeWine (R-Ohio) and Herb Kohl (D-Wisc.) -- put forward a draft bill that would allow the Bell companies voluntarily to spin off their local operations into a separate company. This draft bill, the Telecommunications Competition Act 1998, would mean the independent network operating unit would have to offer equitable terms to all local operators -- including its own parent company, said DeWine, the subcommittee's chairman. In return, Bells could bypass the lengthy regulatory procedure and go straight into the long distance market. The draft bill reflects a proposal originally made by a long distance telecom company, LCI. The proposal met with little response from the Bells, but the Senate lawmakers said they believe codifying the idea in a bill might add impetus to the idea. "I think that is a very important issue to have raised," said FCC chairman William Kennard, who was testifying before the committee about progress on expanding local competition. "I also believe the proposal you have drafted does that as well," he told the senators. "I'm looking forward to having a dialogue with you on this issue."