FCC unplugs states' rules on 'naked' DSL

A deeply divided Federal Communications Commission suspended on Friday state rules forcing phone providers to offer "naked" DSL, in the commission's first serious look at the controversial issue.

The ruling kicks off an investigation into naked DSL--selling broadband access by digital subscriber line without attaching it to other services, such as a local phone line.

The FCC voted 3-2 to suspend public utility commission regulations in Florida, Georgia, Kentucky and Louisiana that had forced BellSouth to sell DSL service to other telephone operators, separate from its local phone service. In the past, the two services had been inextricably linked.

That decision sends a strong message to other state utility commissions that might be considering similar rules, which were intended to encourage the widespread availability of naked DSL. The Bells--BellSouth and the nation's three other top phone and DSL providers--have warned that slightly different naked DSL rules in each state could slow broadband growth in the United States and undermine BellSouth's incentive to invest in the service and the underlying network.

Proponents of the state rules say naked DSL keeps the Bells in check, promotes competition and holds broadband prices under control. BellSouth said the market is better served by not letting states set up a confusing maze of regulatory regimes.

"This FCC order continues progress on clearing out regulatory underbrush that handicaps rolling out broadband," Jonathan Banks, BellSouth vice president of federal executive and regulatory affairs, said in a statement. "By affirming a single national policy in this area, this FCC action will increase the speed and efficiency of bringing to consumers new and innovative broadband service offerings over wireline networks. This order is an important step in achieving the president's goal of increased broadband deployment."

A BellSouth spokesman couldn't immediately be reached Friday to discuss the fate of 8,000 or so BellSouth DSL customers in the four states. Aside from users of naked DSL services, an FCC decision would also affect "cord-cutters," a group of about 20 million U.S. residents who don't have local phone lines and go solo instead with their cell phones. As a result of the FCC ruling, cord-cutters may have to buy a local phone line to get DSL.

Providers of voice over Internet Protocol software--which lets an Internet connection serve as a telephone line--will also feel some pain, for the same reason as cord-cutters. VoIP calls are meant to replace phone lines sold by the Bells; and while they're possible with a dial-up connection, most VoIP operators require that users have a broadband connection to make full use of their offerings. As a result of the FCC ruling, some VoIPers must get DSL and a local phone line from a Bell, should a cable operator's more expensive broadband be unavailable in their area.

VoIP operators don't need to build a network of connections to every home. Rather, as in the case of top U.S. commercial VoIP provider Vonage, they need only require that subscribers bring their own broadband service. It's this class of VoIP provider--those that don't own facilities--that are expected to feel the deepest effect from the decision.

Nudity is optional
The commission specifically decided states can't force the Bells to provide DSL over Bell-supplied voice lines being resold by competitors under FCC mandates called UNE-P. Bellsouth has for several years had a policy not to resell DSL service to customers purchasing voice services from competitors using the UNE-P rules.

Approaching the issue in slightly different ways, state utility regulators created rules starting in 2002 to get around this policy, which prevented BellSouth voice customers from getting DSL from a competitor.

The FCC decided that the states didn't have a right to do so, according to a brief review of the 24-page decision. But this promotes the same practice of "tying" that the Bells use to throttle naked DSL, Commissioners Michael Copps and Jonathan Adelstein wrote in their joint dissenting opinion.

"Beyond this is another ominous precedent for consumers," the commissioners warned. "If it is permissible to deny consumers DSL if they do not also order analog voice service, what stops a carrier from denying broadband service to an end-user who has cut the cord and uses only a wireless phone?

"What prevents a carrier from refusing to provide DSL service to a savvy consumer who wants standalone broadband only for VoIP? Regrettably, these broader issues go virtually unexamined."

The commissioners said investigation into just these issues was "an afterthought."

The Bells are mixed on naked DSL. Qwest has been selling DSL-only service for months. Verizon Communications has said in the past that it intends to voluntarily sell a DSL-only service, but its self-imposed deadline has passed and there's still no offering. "In the past, we have always provided DSL with a phone number," Verizon Chief Executive Ivan Seidenberg recently told the Senate Judiciary committee. "That's the way we provide service....We are in the process of working through the mechanics of offering a DSL line without a phone number."

[tocam27]

This sucks

Most of us live in areas that don't have competition for local phone service, this just hands the bells back their monopolies. At least before we could say, I'll pass on your phone service and get dsl with someone else and use voip, but not anymore.

How is this supposed to be good for the consumer? Isn't the government supposed to be working for us instead of corporations? Am I being too idealistic here or what?

[jrzshor]

crap

"This FCC order continues progress on clearing out regulatory
underbrush that handicaps rolling out broadband," Jonathan
Banks, BellSouth vice president of federal executive and
regulatory affairs, said in a statement. "By affirming a single
national policy in this area, this FCC action will increase the
speed and efficiency of bringing to consumers new and
innovative broadband service offerings over wireline networks.
This order is an important step in achieving the president's goal
of increased broadband deployment."

Does that mean that when one buys DSL one must also buy a
wire line phone, a wireless package, subsidise one
employees kids college tuition (4 yrs worth) and the kitchen
sink? And only when signing up for with the "mandatory"
contract of 5 years!

[Jim Harmon]

Buying both

As near as I can tell, these rules do not apply to the typical consumer - at least not directly. These apply to "Brand X Phone Company" - and whether or not DSL purchased elsewhere by BXPC can be distributed over BellSouth lines (and vice versa).

[ordaj]

Lobbyists. Bah! It's not about...

...the service, the product, or who is or is not being served. It's about the money. Monopoly money. Always follow the money.

[mitiori]

If DSL is classed as an "information service"

and therefore not subject to FCC regulations (or not as much), then naked DSL should be required to separate it from the "telecommunications service" regulations. They should at least pretend to be consistent when they finally decide on the Cable modem issue.

bad for all in the long run

The FCC should not have stepped into this one, or if they felt they had to, they should have had a set of rules / guidelines ready to address the issue. Instead they said to the local utility commissions (that were on the right track) you can't do it that way, but we're not going to do anything either.

This ruling sends a clear message to the phone and cable industries that the government supports them and their money to a MUCH greater extent than the good of the average tax payers.

Naked DSL should be made mandatory nationwide. This would create more competition between broadband providers (CABLE / DSL) and Phone service providers (land line and VoIP). The big (short sighted) phone and cable companies would have to quicken their efforts to provide quality Voice over IP services and the VoIP providers would have to improve quality, features and lower prices. Naked DSL would also lower the price of cable broadband and make broadband (both DSL and cable) more affordable for all, and presumably increase the subscriber base and revenues of the providers.

The only way to truly rid us of the utility monopolies is to separate the service providers from their infrastructures, or force them to open their infrastructures to competitors. This goes for phone, ISPs, water, electrical, etc...

[phops6000]

TThe government is discriminating against people that live in rural areas. These areas are serviced with phone lines but only AT&T can provide DSL on these lines. AT&T can charge whatever they want for this service and will fight to keep a Monopoly on both phone service and DSL service. The bad thing is that the FCC is on the side of the big AT&T. People should get together and write to their local representatives to get this changed. If this does not help, vote them out of office. I have AT&T DSL and their phone service. AT&T will not let me have DSL without their phone service. If I could get DSL without their phone service, I could use VOIP service over the DSL connection. I could save over $70.00 per month.