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One Shoe Drops

FCC to hammer out new DSL rules | CNET News.com On Friday, along with a lot of other industry watchers, I was waiting for two shoes to drop. First, a ruling on DSL service by telecoms was expected from the FCC. Second, Philadelphia was expected to select a vendor to build their wireless network. One of the shoes dropped on Friday. The FCC made a ruling, but the City of Philadelphia will not decide for another week or two.

This article, published on Thursday, does a good job of spelling out the speculation prior to the FCC's ruling on DSL service on Friday. Good reading for background. The issues?

1) The FCC felt a need to respond to the ruling by the Supreme Court last month that said cable companies did not need to let third-party Internet Service Providers (ISPs) on to their networks, to provide a level-playing field for telecom providers of DSL, who were required under current rules to open their networks to third-parties (FCC ruled in 2002 that cable modem service was an information service and not subject to telecom rules). So they sought to reclassify DSL services as information services rather than telecom services, a move which would result in more lax regulations for traditional phone companies providing the service.

2) Democrats on the FCC want a gentle off ramp for ISPs (a transitional period where ISPs would still be guaranteed access to wholesale DSL service), as well as maintaining access for Competitive Local Exchange Carriers (CLECs).

3) At risk are ISPs such as EarthLink, who buy finished DSL services at wholesale prices and sell customers Internet services using the DSL service from the phone companies. CLECs such as Covad only lease the copper infrastructure from the phone companies, and in turn provide the infrastructure equipment to create the DSL service.

4) The Universal Service Fund (USF), drawn from telecom bills, subsidizes phone service in rural areas and helps fund programs such as e-rate. The initial draft proposed that DSL providers would no longer have to contribute 10 percent of their revenue into the fund.

Posted on August 06, 2005 at 09:58 AM

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