Abernathy: Access Issue's Alive

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A recent court setback won't hamper the Federal Communications Commission's ability to require, if necessary, cable operators to carry competing Internet-service providers, FCC member Kathleen Abernathy said last week.

"I don't think it has done that," Abernathy told reporters Thursday.

Last month, a panel of the U.S. Court of Appeals for the D.C. Circuit tossed out the FCC's line-sharing rules. Those rules distinguished between the voice and data frequencies on a copper loop and required incumbent phone carriers to make only the data frequencies available for lease to competing providers of digital subscriber line service.

Access to just the data frequencies cut the loop cost to provision customers.

The three-judge panel vacated the rules on the basis that requiring incumbent phone carriers like the Baby Bells to afford access to data rivals in a competitive broadband market was inconsistent with the pro-competitive goals of the Telecommunications Act of 1996.

Citing the FCC's own surveys, the court said the broadband-access market was dominated by cable operators, not phone carriers.

LEVIN: KEY DECISION

Legg Mason media and telecommunications analyst Blair Levin said in a client memo that the line-sharing decision would have an "important impact" on Covad Communications Co. and "disrupt the plans" of AT&T Corp. and WorldCom Inc. for broader DSL deployment.

The FCC is studying whether to apply rules similar to line sharing on cable operators. AOL Time Warner is already obligated to carry multiple ISPs, but the other big cable operators want to avoid extension of that mandate to them, claiming ISP carriage deals should be reached in the market place.

In March, Abernathy was the most vocal of the four commissioners in suggesting that the agency would have a hard time justifying in court an ISP-access regime that applied to DSL but not to cable-modem service.

Even with the court now saying that the broadband market is competitive, Abernathy told reporters that she did not think the ruling barred access rules on cable that were adequately justified by an analysis of the market conditions.

"I think that is still an option," she said. "Again, you can't do it because you think it's nice."

In addition to the line sharing rules, the court also remanded the FCC's list of phone network elements that a phone carrier has to lease to rivals on an unbundled basis. The court told the agency that it failed to justify why every element had to be available on demand in every market in the country.

"The entire argument about expanding competition and investment boils down to the [FCC's] expression of its belief that in this area more unbundling is better. But Congress did not authorize so open-ended a judgment," the court said in a 21-page opinion written by Senior Judge Stephen F. Williams and joined by Judge Harry T. Edwards, and Judge A. Raymond Randolph.

In one sense, the court ruling wasn't a defeat for the current FCC. The unbundling and line-sharing rules were adopted when the agency was headed by chairman William Kennard.

Michael Powell, the current chairman, has set the agency on a new course that likely ends up with more narrow unbundling and line-sharing rules.

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