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Technology Stocks : LAST MILE TECHNOLOGIES - Let's Discuss Them Here -- Ignore unavailable to you. Want to Upgrade?

To: sillen who wrote (2752)	1/20/1999 9:41:00 AM
From: WTC	Read Replies (2) \| Respond to of 12823

sillen, I largely agree with your xDSL unbundling observations. There are some definition questions here, though, that can lead to confusion, and we are dealing with a set of rules that have been generously foreshadowed in the CC Docket 98-188 NPRM but not yet ruled on. FCC rules in February are then likely to lead to at least some litigation, so the holy grail of truth in these matters is not yet close at hand. However, it is certainly possible to examine the FCC proposition in CC Docket 98-188 as well as the record and draw some conclusions as to the FCC's path of least resistance and its business significance. I do not agree that the CA PUC made a forward-looking decision this month; rather, I believe they acknowledged that their current record was woefully incomplete to use as a basis for regulatory redirection, and they must certainly have felt that the FCC was close to establishing relevant rules that could create a federal baseline for them to operate from. There is general speculation that the FCC will not preempt any state rules on collocation or unbundling that are MORE demanding than a federal standard; the federal standard, then, becomes a regulatory floor. The CA PUC had a timing issue. The rules that will come out in the CC Docket 98-188 Order are all about xDSL -- this is an Advanced Services NPRM, created in response the the ILEC petitions under Section 706 of the Comm. Act of 1996, the Advanced Data Services provisions on regulatory forebearance. The Order will address details like subloop unbundling, critical to xDSL deployment with digital loop carrier. It may address creation of new unbundled network elements (UNEs) that include a virtual high speed data path from a customer location to the central office, including access to all the management functions that pertain; this would be complex. There may be workable federal standards established as to where access to outside plant network must be offered; as of now, the only standard is "where technically feasible" under the Local Competition Order, and FCC examples suggest that this might be at any splice point -- a dauntingly broad and difficult to support requirement. There may be rules addressing so called spectrum unbundling, i.e., dividing a cable pair by high and low frequency carrying capacity, and making a separate UNE of each. Then a DLEC that just wanted to use the data part of an ADSL deployment could get by with just part of the cost of a leased cable pair, a potential (theoretical) savings. There will probably be a two-track approach for ILEC regulation: close scrutiny and fairly invasive regulation if the ILEC wants to offer xDSL services from its own regulated network operations, but relatively hands-off regulation if the ILEC offers xDSL services from a separate subsidiary operating on an equal footing with other DLECs. We just don't know right now how the FCC will come out on many of the details, but the FCC ruling and then adjudication of any resulting litigation will have significant impact on high speed data services costs and availability. It will also probably set off follow-on rulemaking in the states in the domains where the state regulators retain jurisdiction, such as collocation rules and rate-setting. That includes California.