DSL Deregulation Fallout
Consumer groups protest FCC plan to free telecom of broadband responsibilities.
Red Herring Magazine
August 4, 2005
http://www.redherring.com/Article.aspx?a=13038&hed=DSL%20Deregulation%20Fallout
Even though the U.S. Federal Communications Commission has not yet issued a
ruling on DSL deregulation, consumer groups are already preparing their
legal challenges to a proposal they believe will be anti-competitive and
anti-consumer.
"Deregulating DSL is one step forward and 300 steps backward," said Kenneth
DeGraff, a policy analyst with Consumers Union. "We will take this to
Congress. Open access is responsible for the only true competition in
broadband connectivity. Open access to DSL gave us competition. It gave us
EarthLink, AOL, and Juno, and lower prices."
A number of news outlets, including Red Herring, said Wednesday that FCC
Chairman Kevin Martin was expected to officially propose the deregulation
of DSL services by the telecommunications carriers on Thursday.
The official FCC meeting scheduled for Thursday has been rescheduled for
Friday, when the issue of DSL deregulation is expected to be proposed.
Operators' Rights
Last month's decision by the U.S. Supreme Court to uphold the rights of
cable operators to offer broadband products as unregulated data services
brought calls for fairness from telecommunications carriers, which operate
their broadband services under legacy regulations.
The court ruling is popularly known as the Brand X decision, named after
the ISP that challenged the three-year-old original ruling.
"The Brand X decision was a huge loss for consumers," said Mr. DeGraff. "It
forced the FCC to deregulate DSL and give us the cable/telco broadband
duopoly. Changing the rules changes the situation for third-party providers
and changes the situation for consumers."
Some analysts expect the FCC to make accommodations for independent ISPs,
so they are not forced to pay much higher prices for access or are forced
off the telephone companies' broadband connections altogether.
"The FCC is a political body and I suspect they can't just shut the whole
thing down," said Joe Nordgaard, managing director of Spectral Advantage, a
wireless strategic consulting firm. "And the threat of wireless stealing
some of their market share by accommodating these third parties will force
the carriers to accommodate the ISPs.
"Rationality will set in," he added. "The FCC will make concessions. I am
not sure how it will manifest itself, but the ISPs probably provide a
source of revenue for the carriers that they would not want to discard."
================================
George Antunes, Political Science Dept
University of Houston; Houston, TX 77204
Voice: 713-743-3923 Fax: 713-743-3927
antunes at uh dot edu
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