FCC gives DSL providers the authority to deny leasing of their lines

The FCC ruled that DSL providers are not required to lease their lines. Does …

In an expected move, the FCC has ruled (PDF) that DSL providers are not required to lease their lines to competitors. The reasoning behind the decision is that it puts DSL on the same level as cable services, who aren't required to lease their lines. Cable services have been classified as an information service rather than a telecommunication service, which is how DSL has been classified. This ruling makes all wire-line broadband services information services and therefore DSL now falls under the same set of requirements as cable services.

"In the past, the Commission required facilities-based providers to offer that wireline broadband transmission component separately from their Internet service as a stand-alone service on a common-carrier basis, and thus classified that component as a telecommunications service."

The FCC claims that the three decade old sharing requirement caused phone companies to delay rolling out new technology and upgrades because their competitors would be getting the benefit of the new technology without having to pay for it. That was the largest argument from the phone companies during the FCC investigation, and apparently the FCC bought it. Somehow I don't think we will see a lot of "innovation" coming from the phone companies just because they no longer have to lease their lines. Microsoft reached an almost monopolistic market share with Internet Explorer and just sat on their haunches. What's to say the phone companies won't do the same thing? Why innovate when you can stagnate?

The ruling is unfortunate for independent ISPs that are reliant on phone company's copper lines such as Speakeasy and Earthlink. The FCC is all but killing competition in the DSL arena because phone companies are either going to terminate lease agreements all together, or hike the lease rates so high that third-party ISPs will have to pass the charges onto their customers.

The FCC ruling does require that DSL providers continue to honor their existing lease agreements for a period of at least one year, so enjoy Speakeasy while you still can. DSL providers will also still have to comply to wire tapping laws, disability access, and continue their contributions to the Universal Service Fund, a program designed to provide telecommunications to low-income families.

Update: it turns out that the FCC's ruling does not cover CLECs (competitive local exchange carriers) such as Covad, who compete with the ILECs (incumbent local exchange carriers) like SBC, Verizon, BellSouth, etc. As a result, DSL providers such as Speakeasy who lease lines from the CLECs will still be able to continue operation.

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