WASHINGTON -- What appears to be a carefully choreographed rollout of trial balloons in advance of a much anticipated ruling by the Federal Communications Commission (FCC) gained momentum over the weekend when FCC Chairman Michael Powell leaked a draft version of a plan that would have major implications for the future of broadband deployment in the U.S.
The FCC is expected to issue a ruling on Feb. 13 that will revise the rules imposed on the regional Bell operating companies to lease their lines and switching equipment with competitors at steeply discounted rates. The requirement was mandated under the 1996 Telecommunications Act to foster competition between the former monopoly Bells and rival carriers who wanted to enter the local voice market.
Since then, the Bells have argued the regulations have put them at a competitive disadvantage with cable companies that are not required to share their lines with rivals. The Bells contend the current rules have stymied investment in new fiber networks and have given the cable companies an unfair advantage in rolling our broadband service. Cable companies currently control almost 70 percent of the U.S. broadband market.
According to Powell's latest plan, the Bells would not required to share their lines when they build new networks, but they would be required to continue to share their legacy copper wires. This newest draft is in sharp contrast to a trial balloon floated by Powell just two weeks ago that indicated the FCC was leaning to toward freeing the Bells of any line sharing requirements.
The new plan sparked a series of conflicting reports, rumors and hastily called press conferences over the weekend in Washington. One cautioned that Powell's plan was still subject to revision while another report said Powell had already cut the deal with his fellow commissioners. And, perhaps not so coincidentally, Verizon (Quote, Company Info) held a "competition update" for the media Monday morning.
"Much of this debate has lost focus," said Tom Tauke, Verizon's senior vice president for public policy and external affairs. "The most important thing the FCC will address is broadband policy. If they get this right, investment will grow. If not, there will be one less player in the broadband market: incumbents."
Echoing the reported details of Powell's new plan, Tauke said he anticipated the FCC would continue to require the Bells to share their copper lines. While he said Verizon had to problem with that, he supported leasing his company's lines to competitors at wholesale rates instead of the current rules that the Bells must lease their lines for the same amount they charge themselves.
"Anyone can use our copper loops and we assume that will continue to the case. We will continue to provide voice-grade service to competitors," he said. "Our lines will be open to 400 plus major ISPs (Internet service providers) using our networks at commercially reasonable rates."
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