Subject: [NEXTEL-1] FCC's Powell likely to fail in attempt to deregulate Bells

From: Marcel <[email-masked]>
Date: Wed, 19 Feb 2003 23:59:35 -0500

FCC's Powell likely to fail in attempt to deregulate Bells 

By Paul Davidson, 
USA TODAY

Posted 2/18/2003 8:39 PM  

Despite a flurry of talks ahead of a vote due Thursday, Federal Communications Commission
Chairman Michael Powell has failed to sway a majority of commissioners who oppose his plan
to deregulate the regional Bells, say people familiar with the matter. 

The impasse means consumers likely will keep their array of discount choices for local
phone service — but may enjoy fewer broadband options. 

The standoff also sets up the unusual prospect of an FCC chairman being on the dissenting
side for a major plan at the core of his agenda. A 3-2 vote against Powell's plan is
expected. 

Powell wants to stop forcing the Bells to rent call-routing switches and other parts of
their networks to competitors at deeply discounted rates. AT&T and WorldCom have lured
nearly 10 million local phone customers from the Bells by leasing their networks at
discounts and then undercutting their retail prices. 

The Bells say that gives them no incentive to make network investments that would help the
economy. 

Powell, meanwhile, says cable and wireless companies are supplying local phone
competition. An appeals court decision at least partly supports Powell's views. 

But Republican Commissioner Kevin Martin early this month struck a deal with Democrats
Jonathan Adelstein and Michael Copps that would give states a large voice in determining
when the discount leasing would end in each market. That would likely help preserve
competition, at least for several years, because most states support discount leasing. 

Powell, a Republican, over the weekend offered to give the states a limited role based on
FCC guidelines. For example, the states could decide on a longer alternative phaseout
period for leasing Bell switches and revert to discount leasing if the Bells prove unable
to transfer customers to the rivals' switches smoothly. 

The three commissioners rejected the offer as inadequate, say people familiar with the
matter. They back Bell rivals' claims that it's typically not technically or economically
feasible for them to supply switches to consumers and small businesses. They say the Bells
charge high rent for needed ancillary equipment. And they say the Bells charge high fees
to transfer customers to rival switches — transfers that then are laden with glitches. 

In exchange for saving phone competition, the Democrats have agreed to back Martin's plan
to phase out rivals' access to the Bells' fast Internet facilities. Under the plan, the
line sharing that lets rivals like Covad Communications piggyback on the Bells' copper
lines at deep discounts would be phased out. 

Rivals also would lose access to fiber-optic lines the Bells run to new neighborhoods.
They could rent fiber that Bells install in existing neighborhoods, but only at data
speeds equivalent to copper lines.

http://www.usatoday.com/money/industries/telecom/2003-02-18-phones_x.htm

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