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To: Frank A. Coluccio who wrote (1908)	8/17/1998 11:23:00 AM
From: Frank A. Coluccio	Read Replies (2) \| Respond to of 12823

Bells/ FCC Giveth, FCC Taketh Away August 17, 1998 Inter@ctive Week via NewsEdge Corporation : As expected, the U.S. Federal Communications Commission said last week that it plans to let telephone companies add high-speed Internet access gear to their networks without being forced to resell the service to competitors at a discount. In return, however, the commission asked the phone companies to move their high-speed data services into separate subsidiaries that would buy access to telephone network facilities from the phone company, just as independent competitors do. The FCC's (www.fcc.gov) move was intended to give the Bell companies the incentive they need to invest in their networks and add technologies such as Asymmetric Digital Subscriber Line (ADSL), which will boost Internet access speeds by at least five times -- and by as many as 50 times. Competitors cheered the proposed rule changes, but Bell executives were discouraged by the separate subsidiary requirement and the lack of relief from restrictions on long-distance data services. "We didn't get the 'quo' on the other side of that 'quid,' " said H. Edward Winn, vice president of regulatory affairs at Ameritech Corp. (www.ameritech.com), which already has moved its ADSL-based services into a separate unit, Ameritech.net. Without such relief, the Bells must put expensive data gear into each of their Local Access and Transport Areas (LATAs). Other Bells are opposed to forming separate subsidiaries. "Separate affiliates increase the costs of selling new products," said Sid Boren, executive vice president for planning, development and administration at BellSouth Corp. (www.bellsouth.com). Forcing a local phone company's separate unit to buy services from the Bell company, just as competitors do, will help the competitors, said Steven Gorosh, vice president and general counsel at NorthPoint Communications Inc. (www.northpoint.net), a data network operator with national plans. "If the Bell has to sell to its own unit on the same terms, we think the terms will be better," he said. <<Inter@ctive Week -- 08-14-98>> [Copyright 1998, Ziff Wire]