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FCC Scraps Rules Protecting DSL Competition

Cable and Telephone Internet Providers Now Effectively Deregulated

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.

Broadband Access • New Bill Gives FTC Veto Power Over Broadband Caps • Time Warner Cable Changes Contracts To Favor Bandwith Caps • Time Warner Cable Backs Down On Bandwith Caps • Time Warner: Metered Broadband Will Prevent "Internet Brownouts" • FCC Launches National Broadband Internet Plan • Time Warner Doubles Down on Metered Broadband Plans • FCC Pressed To Defend Wireless Open Internet • Time Warner Expands Metered Broadband Billing • New Jersey Sues Verizon Over Deceptive FiOS Marketing • Government Reveals First Steps For Broadband Plans • House Committee Slams FCC Chairman for "Deception and Distrust" • Obama Promises to "Renew Information Superhighway" • Dell Introduces "White Spaces" Capable Laptops • FCC Votes to Open "White Spaces" for Use • Congress Passes Broadband Data Improvement Act • Report: Metered Broadband Bad For Consumers, Businesses • FCC Votes to Punish Comcast for Content Blocking • Comcast Tries to Polish Its Image • Communications Industry Urges Congress to Act on Broadband • Comcast Cuts Deal With Vonage on Internet Traffic • Court Upholds FCC's Video Rules • Report: U.S. Broadband Adoption Slowing • Critics: FCC Inaction Slows Economic Development • Few Are Neutral in Net Neutrality Battles • Google Petitions FCC Over Verizon's Use of Wireless Spectrum --- More ...

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.

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