August 5, 2005 12:54 PM PDT

FCC changes DSL classification

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The Federal Communications Commission on Friday voted to reclassify DSL broadband service, thus freeing phone companies of regulations that require them to share their infrastructure with Internet service providers.

DSL will now be considered an "information service" instead of a "telecommunications service," a distinction that puts DSL in line with the classification of cable modem services. The change in semantics was expected after the U.S. Supreme Court's ruling in the Brand X case just five weeks ago. The court's decision upheld the FCC's classification of cable modem service as an information service.

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What's new:
As expected, the FCC on Friday reclassified DSL, the high-speed Internet service offered by phone companies, as an "information service." The ruling puts phone companies on the same regulatory footing as cable companies, which are exempt from having to offer access on their infrastructure to competing Internet service providers.

Bottom line:
The phone companies say that the ruling will free up more of their resources to improve their broadband services, although at least one FCC commissioner says he will be watching to see if that's really the case. ISPs such as EarthLink, which already have a hard time competing on price, may still negotiate access contracts with the phone companies but are looking for alternative ways to deliver their services.

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Now the phone companies and the cable companies are exempt from "common carrier" rules that require them to share their infrastructure with Internet service providers.

While the new regulatory framework is good news for the Bell phone companies, they are not entirely off the hook. There will be a 1-year transitional period where phone companies will still be required to provide network access to ISPs. DSL providers will also still be required to comply with the 1994 Communications Assistance for Law Enforcement Act, or CALEA, which requires broadband providers offering voice services to allow law enforcement officials access to their networks for wiretapping.

Phone companies offering DSL service will also still be required to contribute to the Universal Service Fund, a federal program that subsidizes phone service in rural areas. During Friday's meeting, commissioners emphasized their commitment to keeping USF funded. As part of this commitment, they have stipulated that phone companies will continue to pay their normal share into the fund for the next nine months. During this period the FCC will review funding alternatives. If an agreement can't be reached, the FCC has the right to extend this period or can also increase the proportion of funding from other sources.

"The Universal Service Fund is one of the pillars of the Telecom Act," said FCC Commissioner Michael J. Copps. "And I wouldn't be party to an agency that would abandon it."

Phone companies will also be required to continue to serve the needs of the disabled community.

"There are certain social policies that we as a country must ensure that won't be delivered by the market," said Commissioner Kathleen Q. Abernathy.

The FCC and the phone companies themselves believe that the new classification will put DSL providers on even footing with the cable companies, allowing them to compete more aggressively. The result, they say, will be lower prices and more choice for consumers as well as higher penetration rates of DSL into communities throughout the United States.

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"The benefits of this ruling will ripple across our communities by encouraging greater investment in and a wider rollout of broadband networks," James C. Smith, senior vice president of SBC Communications, said in a statement. "Discarding decades-old requirements and regulatory assumptions that are out of sync with today's competitive broadband marketplace will also spur more innovative products and services for consumers."

But this theory is yet untested. Commissioner Copps, who was initially opposed to the reclassification of DSL and who disagrees with the Supreme Court's ruling on Brand X, said that changing the rules

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This is Insane
DSL is already cheaper than cable in most markets. In my area it's $15 versus $70 for cable. The RBOCs don't seem to be having much trouble being price competative. All this does is further entrench the existing duopoly.
Posted by (2 comments )
Reply Link Flag
Less Competition Is A Bad Thing!
One of the reasons DSL is cheaper than Cable Internet access is the competition found in the DSL marketplace. Cable competes against no one else in the cable marketplace for Internet access. DSL has competition, giving the customer the benefit.

I dont buy for a second that this will allow for better technological advancement, as the SBC official stated in the story. The competition in DSL sure hasnt stopped Verizon from laying down FTTH.

It would not surprise me at all to see the price of DSL go up when the transition period is over. Thanks FCC!
Posted by cliffsk (1 comment )
Reply Link Flag
So long, Earthlink...
... and Covad and all the others that offered some price competition. The logic of this decision escapes me. The RBOCs are still benefiting from the remains of the AT&T monopoly that built out their networks. Why not hold them to fair-access rules on the copper line network?
Posted by Betty Roper (121 comments )
Reply Link Flag
HAhahahahhahhhaaaahh HH Aa
<p>
<font color="#FF0000">The result, they say, will be lower prices
and more choice for consumers as well as higher penetration rates
of DSL into communities
</font><font color="#000000"><p>
Do they <b>REALLY </b>think is will be the case ? Who are they
<b>KIDDING ? ?</b></font>
Posted by jltnol (85 comments )
Reply Link Flag
HAhahahahhahhhaaaahh HH Aa
The result, they say, will be lower prices and more choice for
consumers as well as higher penetration rates of DSL into
communities
<p>
Do they REALLY think is will be the case ? Who are they KIDDING ? ?
Posted by jltnol (85 comments )
Reply Link Flag
LESS and MORE...
So, playing WORD-GAMES, and refusing to admit that the INTERNET is a communications-medium (EXCEPT when the government wants to tap your PRIVATE communications, or the government wants to USE the "internet" as an EXCUSE to CENSOR TV by stating that citizens can always "...turn to the Internet") is going to help American-consumers..?

And, somehow, this will CREATE competition, ...by CRIPPLING small-businesses ability to COMPETE-EFFECTIVELY..?

BULLSH*T...

I AM SO SICK OF THIS BLATANTLY-OBVIOUS GOVERNMENT-CORRUPTION.

Sorry, I just had to vent my absolute exasperation.
Posted by Had_to_be_said (384 comments )
Reply Link Flag
You're all missing the point...this is the right thing to do
Look, the bell companies have been unfairly forced to share their broadband networks with greedy ISPs. Cable doesn't have to do this, so why should DSL providers? The bell companies, like the cable companies, shelled out the billions of dollars to build these broadband networks, why shouldn't they be allowed to keep them private? Would you like it if you spent thousands on building your dream hot rod and the police came in and said that you had to let me drive it? You would tell me to build my own hot rod. Well, thats exactly what the ISPs should do. Don't have the resources? Guess they are out of luck. Its time for the independant ISP to die anyway. Leave it to the pros who engineered the Internet in the first place. DARPA may have invented the Internet, but it was the bell companies that developed the nationwide infrastructure to make it work.

Not to mention, the independant ISPs in most cases are a poor choice for service anyway. The increased cost provides for ABSOLUTELY NO VALUE. The Northern California city in which I live has several small ISPs that offer DSL, but are absolute idiots. They charge much more for NOTHING other than going through their inferior service and upstream bandwidth. Go direct with SBC and you have not only great service, but their direct link to several NAPs and MAEs. To say nothing of the incompetance of the local ISPs when it comes to network engineering and tech support being offered by high school graduates that are doing nothing more than turning flip cards or searching online knowledge bases applying "fixes" with absolutely no skills to back up their work.

The bottom line is that the bells shelled out the money to build these networks. They shouldn't be required to share them with anyone. At least, until they make their money back on their investment. Until now, the bells had no incentive to deploy DSL in large quantities because they were just going to lose money on them when the other ISPs started reselling the network. Now, DSL will finally be pushed to the forefront and the coming inprovements in copper and fiber will push DSL speeds into the 10-20Mbps range. Cable will too, but DSL will be first. Its already here. You just haven't seen it because the bells haven't turned it up yet. Just wait...
Posted by thenet411 (415 comments )
Reply Link Flag
Wow, completely wrong conclusion by FCC.
Quote: "The Universal Service Fund is one of the pillars of the Telecom Act," said FCC Commissioner Michael J. Copps. "And I wouldn't be party to an agency that would abandon it."

Ah, it's all about preserving an illegal tax on the American consumers. I dunno about you, but when the FCC mismanages the USF so badly that they lose billions of dollars in the mild attempt to broaden Internet access to rural poor, it demonstrates a decidedly unqualified ability to get more money to 'lose'.

And by lose, I mean 'give to their friends'.

The real victory would have been to force cable operators to share their lines. This ridiculous parallel build-out of copper to homes is becoming retarded. How many of these lines does the FCC really think I can handle coming into the house? Are they really trying to promote competition, or grab nice landing spots after an FCC career with some of these corporate parasites?

The FCC is dropping the ball, badly. I want one line into my house. Period. And I should be able to choose *any combination* of cable, telephone, video, ISP access over that one wire. It's really not that difficult, except for the unnecessary legislation encumbering a logical progression of tech.

Well, make sure six year-olds can't hear dirty words at 11pm on cable. That, the FCC can handle. Chimpanzees.

-R
Posted by Remo_Williams (488 comments )
Reply Link Flag
I can understand their point
The phone companies spend alot to maintain those phone lines, why should they have to share them if cable doesn't? They figure that if they have to share everything thing with their competition, why bother to upgrade. My cable drop has been replaced several times in the last 10 years, my phone line was here when I moved in 17 years ago. The phone companies are not going to spend the money as long as their forced to share. Can you imagine if McDonalds was forced to sell Burger King?

<a class="jive-link-external" href="http://jmaximus.blogspot.com" target="_newWindow">http://jmaximus.blogspot.com</a>
Posted by jmaximus9 (86 comments )
Reply Link Flag
Specious Argument About Innovation
The argument about innovation being held back because the Bells had to share their lines is just bunk. The fact that independent ISPs like Earthlink only have 10% of the market indicates this was not a level playing field anyway. And were the Bells so blinded by this fear that they just ignored the cable industry as a competitor? No. What really lit a fire under them is the unrelenting loss of subscriber lines to alternatives like cellular and cable.

I think the real problem today stems from the way that phone deregulation was implemented. In hindsight, it would have been better to break up Bell between the physical lines the the service provided over the lines. The line from your house back to the central office should have been regulated. Everthing else should have been deregulated. The split between local phone service (regulated) and long distance (deregulated), caused the mess that we have today. If just the lines had been regulated and everything else made a free-for-all then we would have had a lot of new players and real competition. Instead, we just have this duopoly between cable and local exchange carriers. Two sets of poles. Two sets of wires.
Posted by Stating (869 comments )
Reply Link Flag
Not what I wanted to hear
Before I moved I had DSL with a third party provider and loved it! Qwest would not allow me to run a home server and wouldn't give me any fixed IP's. The ISP I used allowed servers hosted DNS for me and gave me * static IP's. When I moved I had to go to cable and now I can no longer run a home server and have no fixed IPs. Sure I have faster downloads but so what I don't steal movies and music so what do I care if I have 1.5Mb down or 4Mb down. With this ruling even DSL won't be able to provide this option because only private ISP's were doing it before. This is going to mean the death of a lot of small ISP's and really give the consumer no choice about where he gets his broadband. Personally I think at least some of the motivation for this was to make it easier for the government to access service prover records. Now they wont have to deal with a whole buch of small ISP, just one big megacorp.

Oh well, I am glad I no longer work for an ISP.
Posted by (1 comment )
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