August 5, 2005
The Federal Communications Commission has approved new rules that, in effect, release local telephone companies from sharing their DSL facilities with independent providers. The heavily-lobbied decision is supposed to create "parity" between the phone companies and their cable TV competitors.
The action follows a June Supreme Court decision that gave cable companies exclusive use of their Internet circuits. Telephone companies said the decision put them at a competitive disadvantage and the FCC promised it would quickly remedy the situation.
It did, but only after negotiations that stretched in the wee hour this morning. The four FCC commissioners expressed concern about consumers being denied a choice of DSL providers but agreed that DSL lines should be treated as an "information service" rather than as a telecommunications service.
Telecommunications services are regulated; information services are not. The Supreme Court decision essentially held that cable TV was an information service.
Today's decision means that Verizon, SBC, BellSouth and Qwest will have much greater clout in negotiating with the likes of Covad, Earthlink and others who provide DSL service over lines they lease from the telephone companies. Until now, the telephone companies have been required to lease space on their circuits at a discounted rate.
In a nod to consumer choice, the commission required that existing agreements remain in effect for one year as a "transition period." The commissioners also agreed to study what kind of rules should be adopted in the future to protect consumers.
Some consumer groups have argued that, once they are unregulated, the cable TV and telephone companies will be free to block customers' access to sites and services they consider competitive -- such as movies-on-demand offered by someone other than a cable company or Internet telephone service offered by someone other than a telephone company.
Cable and telephone lobbyists said the idea was "ridiculous." Consumers would complain, they said.
