FCC Reclassifies DSL, Drops Common Carrier Rules

Neil Wehneman writes "Via Media Law Prof Blog, it is reported that the FCC has reclassified broadband service as an "information service" instead of "telecommunications". This, among other things, gives the Baby Bells the same gift the cable companies got with Brand X : the right to stop opening their lines to competitors."

Comments

Competition Shompetition: It's the Royal ROI

[DannyO152]

Here's the theory, in perfunctory fashion, because I don't buy it. Broadband uptake in the US is not going as quickly as somebody wants. Aha! the FCC reasons (helped by whispers in the ear), it must be because the owners of phone lines won't upgrade them unless they get the full return of their investment. So if the Baby Bells own and maintain the lines, the Baby Bells are granted full control over how much they charge other information service providers, and, in order to make negotiations between the Baby Bells and indy DSLs more equitable, the Baby Bells can now walk away and say no soup for you, More return on investment means more investment in infrastructure and more supply means more demand. Entry into the brand new beautiful broadband world accelerates.

And some folks at SBC and Verizon get together with their lobbyists and a few of their contacts in Congress and the Executive, and tilt many a glass in honor of these days in the new gilded age.

Re:Larry Magid

[suitepotato]

The majority of competitive DSL ISP offerings are through CLECs, which are Competitive Local Exchange Carriers. Should the ILECs (Incumbent Local Exchange Carriers) be required to keep their copper open to CLECs, then competitive DSL will still be an option should any CLEC choose to pay for the co-location, backhaul, per line cost, etc.

It makes no financial sense whatsoever to eliminate CLECs from the copper/fiber as they PAY the ILECs for the access/maintenance and always have. The majority of Speakeasy lines are through COVAD (properly capitalized, it is an acronym, COpper Value Added Distributor) if I am not mistaken. However, there really isn't a lot of money to be made at consumer DSL as a CLEC and acting as an ISP over ILEC DSL set-ups is more cost effective. This ruling eliminates the requirement that the ILECs open up their DSLAMs to other ISPs but it does not invalidate the existing contracts. Merely means that the ILECs will have supreme latitude in renegotiation at the contract's expiration. Don't like their terms? Tough.

But all those Speakeasy over COVAD lines aren't going anywhere. Most likely, they will have to do some hard thinking and probably look at partnering with CLECs.

BTW, DSLAM means DSL Access Multiplexor. These are where all the DSL lines terminate and aggregate first and then hand off usually via Fast Ethernet or DS-3 to a switch/router. CLECs may have one or several at a colocation. Some use multiple kinds and some use one kind. See Paradyne, Copper Mountain, Cisco, Lucent, Alcatel for DSLAM models availible.