Cable Stays Mum on Bell Data Bid

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Several Baby Bells have revived efforts to loosenregulations surrounding their deployment of data networks, promising to give greateraccess to their central office facilities in return for being able to send data over longdistances.

The proposal, filed at the Federal CommunicationsCommission last week, throws into a further quandary how cable operators should react nowthat America Online has asked for access to cable wires.

The National Cable Television Association and individualoperators have opposed any effort to require "unbundling," or sharing ofcapacity, of their data networks. And last week, it appeared the NCTA wanted to remainconsistent in the face of AOL's onslaught.

"We've never really advocated new regulation for thetelcos, nor do we want to stand in the way of deregulation," said NCTA'spresident, Decker Anstrom.

Various Bell companies have already argued for looser rulesunder Section 706 of the 1996 Telecommunications Act, which requires the FCC to considerrules that would accelerate the deployment of "advanced telecommunicationsservices."

A final order on those earlier petitions is pending, butthe FCC proposed rules based on those petitions earlier this year and received a chillytelco reception.

This time, the telcos have enlisted heavy hitters from thecomputer industry, which is anxious to put digital subscriber line equipment in newcomputers.

Among its computer allies are Microsoft Corp., Intel Corp.,Gateway 2000 Inc. and Compaq Computer Corp., as well as the Information TechnologyIndustry Council and the Business Software Alliance. Bell Atlantic Corp., BellSouth Corp.,SBC Communications Inc., U S West and GTE Corp. are the coalition's telco members.Ameritech Corp., the only Bell company not listed, is trying to gain approval to mergewith SBC.

Still, FCC chairman William Kennard was characteristicallycryptic about the proposal, reserving judgement until he would have time to review it.Promising to "examine [the plan] fully," however, Kennard said, "I applaudany efforts to give all Americans greater access to modern telecommunications services asinexpensively as possible."

As part of a new proposal presented last week, a coalitionof major telcos said they would increase access to some of their facilities if the FCCrelaxed rules that they unbundle any newly built data networks.

The telcos say those rules are outdated now that severalcompanies, such as MCI-Worldcom and Quest Communications, have started competing for datacustomers. And telcos say they need relaxed rules as an incentive to build out digitalsubscriber lines that would compete with cable modems.

Specifically, the coalition listed 10 "principles forthe promotion of widespread deployment of advanced services" to guide the FCC as itconsiders the Section 706 petitions. The telcos said they wouldn't discriminate againstunaffiliated Internet service providers, and would let competitors use some facilities tostart their own competitive data services, if the FCC let them build long-distance datanetworks under relaxed rules.

In a letter to Kennard, the coalition argued that theirlocal networks "are not keeping pace with user needs for faster, more reliable accessto the Internet. Unless steps are taken to rectify this problem, growth of the Internet --and the wealth of new service applications that the Internet promises to create -- will beneedlessly foreclosed."

Coalition members also weren't shy about evoking the needto compete with cable companies.

"For years, the FCC has been hoping to inspirecompetition," said Mark Roellig, vice president of public policy at U S West."Yet, just as telephony is poised to go head-to-head versus cable modems in theexploding data market, the FCC seems committed to saddling phone companies with endlessrules and regulations while leaving cable companies virtually untouched."

Of course, despite the cable industry's relative silence sofar on the issue, two days hadn't passed before a group had formed to oppose the telcoproposal.

Calling itself the High-Speed Access Coalition, the groupsaid it will work on behalf of households, home offices and telecommuters who have accessonly to one telco.

"This is about monopoly power over the `last mile ofcopper' for home access to high-speed Internet service," said David Wilson, the newlynamed executive director and general counsel for the group.

Without mentioning the prospects for cable modem services,the high-speed coalition urged the FCC to "avoid a rush to judgement" byapproving the telco proposal.

In addition, Sprint Corp., which is building fiberbackbones across the country, said the telco proposal "would certainly serve theirinterests in dominating local markets, but it will do nothing to serve the publicinterest."

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