RBOCs Don't Have To Share High-Speed Access

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September 15, 1999 (1:03 PM EDT)

By Mary Mosquera,

Major phone carriers will not be required to offer competitors high-speed Internet network elements, the Federal Communications Commission said Wednesday in a ruling that will shape the telecommunications landscape going forward.

The regional Bell operating companies (RBOCs) will still have to lease or sell several elements of their network to encourage competition in the $100 billion local phone market under the 1996 Telecommunications Act.

"This order strikes the appropriate balance," said FCC Chairman William Kennard. "It recognizes that in densely populated places where there is competition, we're going to ease up. We're not going to regulate just for regulation's sake. And in those markets where companies are rolling out new services like broadband, where the market really hasn't matured but we're seeing competitive entry, we're taking a lighter touch.

"I'd like to create a broadband oasis where you have companies competing robustly, and we're starting to see encouraging signs. But this commission will remain aggressive in ensuring any competitor who wants to can get out there and compete on the telephone side has access to the basic tools that they need,"

The Supreme Court in January asked the FCC to take another look at the original seven elements the FCC required the major local carriers to unbundle for new entrants.

The incumbent phone carriers must separate and offer to competitors the local loops to home and office, interoffice transport, network interface devices that route and switch calls, signaling and call-related databases, and operational support services, the FCC said. But they will not have to share operator or directory assistance services. The FCC also said the major carriers would not have to give competitors access to businesses with four or more phone lines in the 50 biggest urban areas.

The RBOCs say competitors seek only the highest profit customers, such as large businesses in dense downtown areas, leaving them with higher-cost rural and residential customers. Competitors also want access to the Bells' equipment, such as packet switching and D-slams (DSL multiplexers), that will allow them to provide high-speed Internet connections. But the FCC said that offering such equipment at a discount to new entrants could slow broadband investment and deployment to all consumers.

Both cable and telephone companies have seen subscribers for high-speed Internet access accelerating. Cable modems doubled to one million by mid-1999 and are expected to double again by year-end to two million, the FCC said. Phone carriers' DSL technology will double to 400,000 by year-end from its 200,000 subscribers in June.

"This proposal will reinforce the ability of competitors to enter markets quickly and provide consumer choices in local phone service, particularly in the mass market," said Chris Libertelli, an attorney in the FCC's common carrier bureau.

The FCC also said it will ease limits on wireless ownership on a case-by-case basis when companies demonstrate they will use the spectrum space for high-speed Internet and other advanced telecommunications services. The communications regulator also approved leading defense contractor Lockheed Martin's bid to buy 49 percent of COMSAT, the satellite communications provider.