The Federal Communications Commission, attempting to jump-start competition in the local telephone business, may let regional phone companies install and operate high-speed data networks without having to give access to competitors.
Currently, the Baby Bells don't have an incentive to invest billions of dollars in new data networks, because they would have to share them with rivals like AT&T.
The commission is considering a plan that would allow the Bells to create data services subsidiaries. The new units would be exempt from regulations that force the Bells to share their networks with competitors.
Under the guidelines of the 1996 Telecommunication Act, regional phone companies must give competitors access to their lines into customers' homes. In exchange, the regional companies would be allowed to sell long-distance services.
But that hasn't happened. Long-distance carriers like AT&T have accused the local phone companies of stalling. They say the Bells are failing to offer wholesale pricing for leased lines and they're being sluggish in processing work orders.
The Bells, in return, are complaining that the FCC's guidelines are holding them back from upgrading their networks to provide new services. As a result, competition in local markets as intended by Congress hasn't emerged.
"The whole point of mandatory resale was to accelerate local competition and to make these kinds of services more accessible to consumers," said Mark Bruneau, president of the telecommunications practice at Renaissance Worldwide, a consulting firm. "Perversely, the outcome has been exactly the opposite."
The separation of data networks would benefit consumers by accelerating the spread of access to high-speed Internet services, FCC officials contend. The plan would also speed up the opening of the local phone markets.
Naturally, the long-distance carriers are opposed to the plan.
"If they were allowed these unregulated high-speed networks, with relative ease and a little modification the Bells could offer voice services over those lines, skirting the Telecommunications Act of 1996," said AT&T (T) spokesman James Peterson. "This initiative would be nothing more than a free pass around an open-market system."
The FCC could propose this plan during a 6 August meeting to examine the state of the high-speed data market.
