Thursday, November 18, 1999

FCC decision
could speed up
’Net access

Local phone firms required
to share their lines

From staff and wire reports


WASHINGTON -- Consumers could one day see more competition in their choices for high-speed Internet service under action by federal regulators.

Today's decision by the Federal Communications Commission could make it substantially cheaper for upstart businesses to compete with telephone companies in providing connections dozens of times faster than today's dial-up modems. The FCC required local telephone companies to share their lines with businesses that want to offer high-speed Internet connections to customers. Consumers might benefit with more choices for services, like certain digital subscriber lines, at competitive prices.

Several local industry executives said it was too soon to say what affect the ruling would have in Hawaii. Given the technical nature of the decision, GTE Hawaiian Tel has to determine how the ruling would even be implemented, said company spokesman Keith Kamasugi.

Right now, local telephone companies, like the regional Bells and Hawaiian Tel parent GTE Corp., can offer high-speed Internet services to subscribers on the same lines as they provide their regular voice service. But for outside businesses to come in and sell Internet connections to a consumer, they must buy a second line from the telephone company into the consumer's home.

That means businesses competing with the local phone companies must spend about $20 to $23 for each second line. Newer data companies say this puts them at a significant price disadvantage and limits their ability to lure residential consumers.

They say the playing field could be leveled with FCC's action.

"The FCC is really going to unleash all the benefits of competition for residential users," said Michael Olsen, deputy general counsel of NorthPoint Communications Group Inc., which provides data services mostly to businesses. The company plans to boost its marketing next year, by setting up kiosks at Radio Shack so consumers can sample the high-speed connections.

"I think this is a sea change in people's perception," said Jeff Blumenfeld, general counsel for Rhythms NetConnections Inc., another data services company. He said sharing lines will enable consumers to start receiving service in a matter of days rather than waiting weeks for a second line installation.

But the regional Bells say they have serious concerns about the impact on consumer service of carrying data and voice traffic -- from different providers -- on the same copper wire. For example, if a consumer has a problem placing a call, companies will have to determine which service is responsible.

"We are concerned about the impact on the consumer who is currently purchasing voice service from us that could have two providers over the same line," said Susanne Guyer, assistant vice president of federal regulatory affairs for Bell Atlantic.

Industry officials expect the FCC to implement this requirement within six months. Yet to be determined are pricing arrangements. The commission is expected to set some interim pricing guidelines, with states hammering out later how much Internet businesses must pay the local telephone companies to split the line.

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