News

FCC to Bells: No Stalling

4/03/2005 8:00 PM Eastern

Washington—Big phone companies are on notice that failure to promptly transfer telephone numbers to cable companies would run afoul of federal rules and would face punishment.

“We take this opportunity to remind carriers that the [law] requires, and we intend to enforce, nondiscriminatory number porting between [phone companies], including our previous conclusion 'that carriers may not impose non-porting-related restrictions on the porting-out process,’” the Federal Communications Commission said on March 25.

DSL TIE-IN

The admonition was contained in an FCC order that barred states from requiring BellSouth Corp. to provide digital subscriber line service to consumers who subscribe to voice services offered by companies that lease facilities from BellSouth. The ruling affected about 8,000 BellSouth DSL subscribers, the Atlanta-based Baby Bell said.

A BellSouth spokesman said he didn’t know the fate of those customers whom states had forced the company to serve with DSL.

“This FCC order continues progress on clearing out regulatory underbrush that handicaps rolling out broadband. By affirming a single national policy in this area, this FCC action will increase the speed and efficiency of bringing to consumers new and innovative broadband-service offerings over wire-line networks,” BellSouth vice president of federal executive and regulatory affairs Jonathan Banks said.

Comcast Corp., Time Warner Cable and Bright House Networks — each making a major push into the voice-over-Internet protocol service market — complained to the FCC that Verizon Communications Inc. won’t transfer a number until a customer drops both voice service and DSL, even though the customer wants to switch only to a new voice provider.

Number portability is viewed as essential for new entrants because many consumers and small businesses won’t go with a rival carrier if they can’t retain their phone numbers. Receiving a new number means having to spend time and money to get the word out to family, friends and clients.

Comcast argued that Verizon’s porting policy violated FCC rules. Verizon replied that the FCC had reviewed its bundling policy in connection with a long-distance entry application and “approved it.”

In the BellSouth decision, the FCC noted that if a porting violation has occurred, cable companies are free to file a formal complaint with the agency.

A Comcast spokesman declined to comment on the FCC’s number portability warning.

BellSouth has the same policy as Verizon: It won’t sell DSL untied to a local-phone subscription and it won’t disconnect a local-phone number until the DSL account is closed.

The FCC said that the few states that had forced BellSouth to furnish DSL acted contrary to federal unbundling rules. A voice competitor, the FCC said, was not entitled to lease just the voice frequencies on the line; it had to lease the entire line and, perhaps, find a company other than BellSouth to supply data service in a sharing arrangement called line splitting.

NARROW RULING

The FCC emphasized that its BellSouth ruling was narrow and avoided a much broader policy question — namely, should the commission force incumbent phone companies to furnish DSL a la carte or on a standalone basis to anyone, whether that’s a BellSouth voice customer, a wireless-only consumer, or a cable digital phone customer?

With regard to the practice of tying DSL and dial-tone services, the FCC launched a notice of inquiry. A step short of a rulemaking, the NOI gives parties the opportunity to ventilate their views on tying and allows the FCC to weigh legal and other issues.

The NOI noted that tying arrangements could harm “competition because consumers have to purchase redundant or unwanted services,” meaning a BellSouth customer that wanted to use the DSL connection to subscribe to a VoIP service would still have to purchase dial-tone service from, for example, BellSouth.

The BellSouth DSL ruling — one of the last involving FCC chairman Michael Powell — occurred March 17 and the vote was 3-2. But the FCC was unanimous on the number-portability portion of the decision.

TWO DISSENT

In a joint statement, FCC Democrats Michael Copps and Jonathan Adelstein said they “support the effort in this action to reinforce nondiscriminatory number porting, including between wire-line and cable carriers.”

But the two disagreed with the main decision, saying that it effectively endorsed a trying arrangement in which BellSouth could refuse to furnish DSL to a consumer who did not purchase voice service from the company.

Copps and Adelstein said BellSouth’s bundling policy would hurt consumers who wanted DSL without giving up cellular or VoIP service.

“Regrettably, these broader issues go virtually unexamined,” Copps and Adelstein said.

March