In a regularly scheduled review of local network leasing rules, the FCC took up the matter where Congress left off. But at the FCC, RBOCs ratcheted up the stakes. Not only did they ask for slack when it comes to sharing portions of the network for broadband services but also when it comes to plain old voice telephony. They sought to undo the requirement to share a set of network elements, known in regulatory jargon as UNE-P, or unbundled network elements-platform. Competitive carriers argued that eliminating UNE-P would drive them out of business. In the end, despite partial dissents from four of the five commissionersKevin Martin being the sole supporter of the total decisiona majority approved the broadband changes and left the UNE-P obligations largely intact. To broadband service providers, the most alarming change was a 3-2 decision allowing RBOCs to stop sharing the high-frequency portions of local copper wire with rivals in three years. Powell and Commissioner Kathleen Abernathy dissented from the decision, warning that it could lead to higher Internet access prices. Even within the slim majority approving line-sharing deregulation, there was dissent. Commissioner Michael Copps, one of the FCCs two Democrats, said he voted for it only to reach a compromise on the other aspects of the order.Covad, in Santa Clara, Calif., shares RBOCs lines to provide ADSL (asymmetric digital subscriber line) service to small businesses, but it leases entire lines to provide symmetric DSL to enterprises. The company will likely take the FCC to court if the commission does not modify the Feb. 20 decision and preserve line sharing, Oxman said. "It seems like we have a pretty clear pathway to appeal," he said, noting that in addition to the explicit dissent of Powell and Abernathy, Commissioner Jonathan Adelstein stated that he was not fully informed about what he was voting for. Covad also partners with voice service providers that rely on the upheld UNE-P framework to provide data services to customers. The company recently signed a deal with AT&T Corp. and will announce similar deals with other voice providers soon, Oxman said. From the perspective of small businesses, any policy that appears to hamper the fledgling competitive carriers is seen as potentially harmful to users. "Small businesses benefit greatly from being able to use a local ISP for Internet and access via line-shared ADSL," said Jeff Buckingham, president of CallAmerica Business Communications Inc., a Competitive Local Exchange Carrier, in San Luis Obispo, Calif. "The local ISPs offer great customer support and are right there to fix a problem if needed. Now all small businesses who want to use ADSL will be forced to buy from the Bell company." Search for more stories by Caron Carlson.
"This was an 11th-hour back-room political deal. The Democrats basically sold out broadband competition," said Jason Oxman, assistant general counsel for Covad Communications Co., in Washington. "The amazing thing is that two Democrats succeeded in going further than Tauzin and Dingell were willing to go."