New broadband rules draw criticism

The new regulations, collected in a massive 576-page document, spell out the Federal Communications Commission's vision for competition between the big local phone companies and their rivals in the data and voice telephony markets.

But as a final order, the dense regulations still carry with them a strong sense of uncertainty. Analysts said competitors on both sides of several issues are likely to challenge many of the elements, and the commissioners themselves evidenced one of the most bitter splits in recent regulatory history over some of the key provisions.

"I am proud to say that we take some vital steps across the desert from the analog world to the digital one," FCC Chairman Michael Powell, who was overruled in some of his key desires for change, said in a statement accompanying the order. "Yet, regrettably, there are some fateful decisions...that I believe represent poor policy and which flout the law."

The massive set of new regulations comes at the end of the regulatory body's Triennial Review process, which was aimed at bringing telecommunications policy into line with modern market realities and stimulating advanced broadband technologies. Regulators have been studying the issues for two years and have been writing the details of Thursday's order for six months.

Commission decisions, as written, would give the big local phone companies considerable new powers in advanced broadband services, eliminating requirements that they have to share these new networks with potential rivals. But the commission left in place many rules that force the phone companies to share their existing networks for voice and DSL (digital subscriber line) service, ensuring continued competition in local phone services from companies such as AT&T.

Several telephone companies declined to comment on the order until they had time to study it.

"It took the FCC two years to decide and write the order. We need time to read and understand it," Tom Tauke, senior vice president of Verizon Communications, said in a statement.

Some groups began weighing in almost immediately, however.

AT&T commended the FCC decision in general but especially for giving state regulators the responsibility for pushing local phone companies to share access to their existing networks with potential rivals.

That was seen by many--including Powell, who wrote a lengthy critique of the local-rule policy?-as code for preserving regulations on local phone companies that allow companies such as AT&T and Sprint to offer their own local policy using the rival networks.

"Today's order will allow AT&T to continue to serve our existing local customers and to follow through with our plans to expand to other markets," Robert Quinn, AT&T vice president, said in a statement.

The Association for Local Telecommunications Services, a trade group that represents rivals to the big former Baby Bell companies, said the commission was making a mistake by giving the big local phone companies exclusive rights to their advanced high-speed networks.

"We are extremely disappointed that portions of the commission's decision may open the door to allow the Bell companies to restore their monopoly over facilities needed to deliver broadband services," Jonathan Askin, ALTS general counsel, said in a statement. "The order throws out the PANS (pretty awesome new stuff) and keeps the POTS (plain old telephone service), essentially sacrificing America's competitive broadband future in order to preserve marginal price differentiation for run-of-the-mill voice telephony."

Askin's group also criticized the commission's decision to phase out "line sharing," a policy that gave companies such as Covad Communications inexpensive access to phone lines to offer DSL services. He said the group would "explore all its options to reverse these aspects of the order."

Consumer advocates also said they would fight the advanced broadband portion of the order.

"We will be battling to get (the broadband sections of the order) reversed on reconsideration," said Mark Cooper, director of research at the Consumer Federation of America. "Why shouldn't consumers of 21st century communications get the same benefits from competition that millions of wireline consumers already enjoy?"

Perhaps the harshest criticism of the order came from commissioners themselves, however. The five commissioners split differently on separate pieces of the order, and each released statements that took aim at some part of the massive document. This, as much as anything, could be a preface to the legal challenges sure to emerge in the upcoming weeks and months.

"Instead of preserving, protecting and defending competition, the commission has torn away access to the network architectures that undergird broadband competition," said Commissioner Michael Copps, bemoaning the order's intention to give the large phone companies exclusive control of their own future broadband networks. "This is not a brave new world of broadband but simply the old system of local monopoly dressed up in a digital cloak."