In a Washington press conference, the Internet Service Providers' Consortium, Commercial Internet Exchange, and six state ISP groups said that independent Internet service providers could be threatened by such a proposal. The Federal Communications Commission is expected to vote on the issue at the end of this month.
"We think it's premature for the Commission to come out with their planned rulemaking on advanced services," said Barbara Dooley, president of the Commercial Internet Exchange, in a statement released to the press.
The FCC proposed last year that Baby Bells be allowed to offer high-speed Internet services such as DSL, or digital subscriber lines, though separate subsidiaries. Without establishing a separate company, the Bells would have to "unbundle" their DSL networks, allowing competitors to lease the lines at discounts to resell to their own customers, commissioners proposed.
Some of the regional Bell companies have protested against the plan themselves, saying they should be able to sell the advanced data services directly to consumers without going through the subsidiary, and without reselling the service to competitors.
Allowing competitors access to the networks at a discount would sharply reduce the incentive to invest in high-speed lines, and slow the rollout of DSL, Bell executives have told the FCC in a series of hearings and regulatory filings. The local companies have enlisted a coalition of computer companies, including Compaq and Intel, as well as several federal legislators, on their side in the debate.
But a stream of critics, ranging from state regulators to long distance companies, have told the FCC that the Bells should not be given the ability to offer high-speed data without an unbundling requirement, as the companies still have a virtual monopoly on phone lines that run into consumers' homes.
DSL serves as an upgrade to existing phone lines, allowing them to handle high-speed Internet traffic alongside traditional voice calls.
Most of the concerns over unbundling have been repeated since the FCC called for comments on their proposal last fall. But with a vote on the issue approaching later this month, critics are stepping up their campaigns.
Today, the ISP groups said that the Bells have discriminated against some independent service providers in their existing rollouts of high-speed data service, making it difficult for customers to use the broadband lines with a non-Bell ISP.
The FCC should not make any decision that can allow the dominant local phone companies to continue a record of "eager exploitation of monopoly privileges," said Sue Ashdown, executive director of the Coalition of Utah Independent Internet Service Providers.
"It's clear that the impact of decisions about the incumbent local exchange carriers entering into advanced services, on small businesses, and ultimately, the American consumer, is not fully understood,'' Dooley added.
The commission is expected to vote on the proposal at its January 28 meeting.