In a 3–2 decision shortly before the departure of former Federal Communications Commission Chairman Michael Powell, the FCC voted to approve a petition from BellSouth Corp. to suspend public utility commission regulations that required the company to provide unbundled DSL service to customers.
Unbundled or “naked” DSL is a data-only service without the voice line that is normally part of the DSL package. Naked DSL is used by customers who are using alternative voice services or wireless phones rather than landline phones provided by the Baby Bells.
BellSouth Director of Media Relations Bill McCloskey told eWEEK.com that the vote had already been held, but that the commission still hasnt announced it. He said that while his company knows that they won, they still dont know any other details.
“We wont know until we see the decision if there are any restrictions,” McCloskey said. He said that a great deal depends on the comments of the dissenting commissioners, but that at this point that information was still unknown. All he knows now, he said, is, “We won.”
The BellSouth petition gathered over 100 comments from companies with a competing interest in unbundling DSL, as well as from private citizens. Now that the FCC has approved its petition, BellSouth will be free to require customers who want DSL service to also purchase voice service from the company.
Verizon Communications has been involved in similar issues before with the FCC, but in the case of Verizon, it involved number-portability issues in which Verizon would terminate DSL lines and the related Internet and e-mail accounts if customers chose to move their phone numbers to other carriers.
“The FCC speaks with forked tongue,” said Forrester Research Inc. Vice President Lisa Pierce. Pierce said that the FCC is saying on one hand that DSL is a data service and on the other that its a phone service. “They say that DSL is an information service and as an information service it should be unbundled,” she said. It is, she said, “a day for the cable companies to rejoice.”
While some cable companies do provide phone service, that industry has always been willing to provide Internet access alone. In addition, cable companies are offering data rates as high as 5M bps, which is significantly faster than DSL in all but a few locations.
“For people who want to use wireless and just have a data line, they are forcing a move to cable,” Pierce said. She added that BellSouth is essentially saying, “Take my bundle or take nothing,” she said, “and people will say OK and take nothing.”
One of the reasons given in the comments supporting BellSouth prior to the FCC vote is that because DSL is less expensive than cable Internet access, the bundling is necessary. However, a quick survey by eWEEK.com revealed that, in fact, at least one cable company—Atlanta-based Cox Communications—offers a broadband connection for prices that are lower than for DSL.
“They [the cable providers] are not regulated at all, by an act of Congress,” Pierce explained, “so they can elect to offer service in any form they want to anyone they want.” She said that, in the past, the FCC has said that it wanted to make DSL better able to compete with cable for Internet users, but that isnt happening because of this vote. “If the FCC tells state PUCs [public utility commisions]that they cant encourage this, it interferes with the FCCs own stated goal,” Pierce said.
McCloskey said that the FCC decision should be made public within a few days. He said that he initially expected it today. A spokesman for the FCC said that the change in leadership at the FCC was slowing things down, and that some announcements were on hold while the new chairman got up to speed.